1.4 Glossary of Key terms

Reading task

Unit 1.4 - Glossary of Key terms: Stakeholders

Key term	Definition
Arbitration	Method of stakeholder conflict resolution with all stakeholder groups in conflict agreeing to accept the decision or judgment of the independent arbitrator.
Competitors	These are the firm’s rivals, which operate in the same industry and contest for the same customers.
Conciliation	Method of stakeholder conflict resolution which aims to align the incompatible interests of different stakeholder groups by helping different parties to better understand each other’s interests.
Conflict	This refers to the mutually exclusive and incompatible interests of different stakeholder groups. If this is not managed, it often leads to protracted disagreements, disputes, and arguments in the workplace.
Customers	These are the firm’s clients, individuals and other businesses, who purchase the organization’s goods and/or services. Their interests include competitive prices, fit-for-purpose products and overall value for money.
Directors	The group of senior managers who run a company on behalf of the owners of the company.
Employees	These are the workers within an organization. Their interests include: job security, a competitive remuneration package, a safe working environment, and opportunities for career development.
External stakeholders	Stakeholder groups that are not directly involved in the running of an organization but have a direct interest in its operations.
Financiers	Financial institutions (such as banks) and individual investors who provide source of finance for businesses. They are interested in the organization’s ability to generate profits and to repay debts.
Government	The ruling authority within a state or nation. The government, as an external stakeholder, is interested in businesses complying with the laws of the country, such as employment legislation.
Internal stakeholders	These stakeholders are part of the organization, such as employees, managers, directors, and shareholders.
Local community	The general public and local businesses that have a direct interest in the activities of the organization. They are interested in the firm’s ability to create jobs and to operate in a socially responsible way.
Managers	The people hired to be responsible for overseeing certain functions, operations, or departments within an organization.
Pressure groups	Individuals who come together or organizations that are set up for a common concern. They aim to influence government and public opinion in order to create the desired social change.
Shareholders (stockholders)	The people or organizations that have shares in a company. Their interest is financial, i.e. regular dividends and a higher share price.
Stakeholder conflict	Refers to differences in the varying needs, perspectives, and priorities of the numerous stakeholder groups of an organization.
Stakeholder mapping	A business management model used to determine the relative interest of stakeholders and their level of influence (or power) on an organization.
Stakeholders	The individuals, organizations, or groups with a vested interest in the actions and outcomes of a specific organization. They are directly affected by the performance of the business.
Suppliers	Organizations that provide the goods and support services for other businesses. Their interests include receiving regular orders and receiving payments from their business customers on time.

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1.4 Glossary of Key terms