Stakeholder Mapping

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Every stakeholder has different interests in the company. A shareholder will have a higher influence on the decisions taken by the organization than a staff working as a technician in an organization. To achieve balance in meeting the interests of all the stakeholders the organization has to analyze the groups in accordance to how much influence they have on the organization. This process is called stakeholder mapping. And it involves asking the following questions:

1.      Who are they?
2.      What do they want and what will they accept?
3.      How satisfied are they?
4.      How much power do they possess?
5.      What sort of power do they possess?
6.      How compatible are their interests?
7.      What conflicts exist?

A Power-Influence matrix given below is designed to map the interests of stakeholder according to their influence. This will help the organization to prioritize among their stakeholders.  

To briefly explain the figure above, stakeholders amongst key players have a high level of interest therefore a high level of power. The policies and procedures carried out within the organization therefore must be acceptable to them. For example in a resort the tourists can be a key player. Stake holders in keep satisfied has low level of interest however has a capability of becoming a key player therefore must be treated well, for example low level management staff with a good pay and benefits will not protest against the company. However if the actions of the company results in drawbacks in his career the staff will resign from the company. A loss of a loyal employee who has worked for several years is a huge loss in terms of how much the company has invested on him, his knowledge and capability to handle the various conflicts within the organization. Stake holders in keep informed has low level of power and a high level of interest, for example pressure groups.

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Stakeholders

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It is understood among all businesses that a good collaboration among stakeholders in a firm is essential to the success and growth of the business. To define briefly they are a group of individuals who can affect or are affected by the objectives of the organization. Every organization has a unique set of stakeholders but there are common stakeholders such as investors, employees, customers and communities, Ann Svendsen in her book The Stakeholder Strategy: Profiting from Collaborative Business Relationships, explains how organizations are coming to the realizations of the importance of a good relationship between stakeholders. And through this realization how it changes the way companies treat their employees and suppliers by developing innovative products and services, taking care of the environments and contributing to the community

It is vital for the survival of the organization for it to find balance among its stakeholders. For example due to the pressure from the investors of a company they might have to increase the prices of the products or services that are provided in order to meet the demands of the investors. However this would make it difficult for them to meet the demands of the consumers since they demands better quality with a good price. These conflicts of interest will arise between different groups of stakeholders and companies have to overcome them amicably. 

Types of Stakeholders

Stakeholders are distinguished mainly to three categories. They are:

• Internal stakeholders.
• External stakeholders.
• Connected stakeholders.

Internal Stakeholders

Internal stakeholders consist of those stakeholders who have an intimate connection with the organization. Briefly they are the employees and the management of an organization. Both the employees and the management play an integral role in the growth of the business. This is why employees are considered as the biggest asset in a company.

The decisions taken by the employee fashions the organization to meet its objectives. Through their ideas and skills they introduce or improve services and products in a company. For example in a business firm that strives on the quality of the products they produce, it is important that all the staff involved in the production process maintains this quality of the products. And in order to maintain the quality the employees must be motivated. And with this motivation it ensures the organization that the objectives will be met. (Mcshane, 2000) states that “employee involvement is important for quality management because employees usually have the best information to identify quality problems and take corrective actions”. It is incumbent for organizations to meet the interests of the employees since it will highly benefit them not only in the daily operations of the business but for the future growth of the business as well.

Some interests of the employees include:

1. Income Security.
2. Job Satisfaction.
3. Friendly and safe working environment.
4. Salary increment.
5. Career development; Promotions.
6. Work recognition.

External Stakeholders

External stakeholders mainly consist of the community, government and pressure groups. Each of these stake holders have a huge impact on the decisions taken by the organization. For example due to the increasing awareness of global climate change and importance of preserving the environment, organizations must operate their activities keeping in mind the ways to make it environmentally friendly. By increasing the reputation of the company in the community it adds to the life span of the organization.

The government and its regulatory bodies also impact the operations of the organization. Government tends to pass laws that restrict the organization from carrying out certain activities while also such laws might enable them to go forward. This is one of the reasons many of the big businessman are affiliated with politics. They will be able to anticipate the changes in the laws and in some cases influence in the decisions made.

Another group of stakeholders among external stakeholders are pressure groups. Pressure groups are defined as “A group seeking to influence government policy or business activity to secure the interests of their members and supporters”. Through their influence and criticism on the activities carried out by organization they are able to change their course of action. This is achieved by the huge public support they have. 

Connected Stakeholders

There are several groups of connected stakeholders. Some of they are:

1.   Shareholders: Shareholder is the one who owns shares in a cooperation. Shareholders have a great influence on the decisions made by the company such as vote on who sits on the board of directors. The prime interest of a shareholder is a return on their investment. So they are looking for high profits and a long term growth of the organization.

2.   Customers: Controls a major part of the prices and procedures done by organizations. They determine whether an organization will survive or not. They are often referred to as the king because ultimately they determine what is produced, what quality is needed and the price (media, Business essentials: Business environment, 2013). Briefly customers wants:

·         Low prices

·         High Quality Products

·         Good service

·         Variety of Products

·         Regular supply of products

3.   Suppliers: Having a good supplier relationship is one of key areas in which organizations take a huge importance. Organizations are looking at suppliers as partners rather than vendors. One of the key things a supplier searches for is a long term relationship with a firm. If an organization is able to show this commitment to a supplier this will in return prove profitable to the organization. Through a good relationship with the supplier the organization is able to suggest new ideas or improvements to the products. The organization can gain a competitive advantage by getting better prices and delivery times (Inc.). In return the organization must ensure of prompt payments and larger and frequent orders.  

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The Purpose of Organizations

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“A company is one of humanity’s most amazing inventions. It’s totally abstract. Sure, you have to build something with bricks and mortar to put the people in, but basically a company is this abstract construct we’ve invented, and it’s incredibly powerful,” says Steven Jobs, CEO of Apple Computer and Pixar Animation Studios. From his quote we can understand that organizations are powerful, therefore has a huge responsibility which feeds their purpose. Whether it’s building an airport or selling books, some organizations are more potent to carry out small activities while others are more capable of conducting larger projects. 

Sole Trader

Sole traders are single individuals carrying on a business on their own. The most common form of business organization is that of a sole trader. It is easy to establish such a business for there are few formal procedures. Below are some advantages and disadvantages of a Sole trader.

Advantages	Disadvantages
The owner makes independent decisions and have complete control over management	Unlimited Liability
Personal contact with employees and customers	Lack of continuity in case of owner’s death. The business may have to be sold to meet inheritance tax liabilities
High profit since sole traders start business with their own capital	Has to bear the demands of hard work, long hours in the competitive market alone
Less paper work compare to other businesses	Technological enhancements are few in such business because cannot afford the heavy capital needed.

Partnerships

Partnerships are two or more individuals joining together sharing profit and losses to run a business. In partnerships there is a written agreement between the partners stating how the profit and losses will be divided among them. It is one stage beyond the sole trader but it does not necessarily grow out of sole proprietorship. Sometimes a business begins as a partnership. The management of the business is carried out by all the partners of the business and they should all be consulted before any vital decision related to the business is taken. For example, a meeting is held between all the partners of a firm to decide on the opening of a new branch or office. Below are some advantages and disadvantages of a partnership. 

Advantages	Disadvantages
More capital since more people are involved	Unlimited liability.
More people allow specialization. For example, one of the partners could be specialized in the field of telecommunications while one of the others could be specialized in the field of Architecture. Their expertise can be used for the development of the business. To widen its prospects in the market, this will allow them to be a strong competitor.	Lack of continuity in case of death of a partner. If one the owner dies or leaves the partnership, the partnership is at an end and a new one has to be formed
	Since each partner has a say in what goes on in the organizations it allows disagreements which may cause delays damaging to the business
	May suffer shortage of capital since there is a limit to the amount of capital that can be withdrawn from the partners.

Private Limited Company 

The distinctive feature of a private limited company is its ownership. They are owned and financed by individuals. This type of companies wary in nature and size and the type of goods and services provided and also their name must end with the word “Limited”. Some sole traders may start the business as a limited company just to obtain the benefits of limited liability. It allows a large number of people to contribute funds since they wouldn’t have to incur any further capital to meet company debts. 

Advantages	Disadvantages
Limited liability due to its independent legal status	A shareholder of the company can only transfer his or her shares to someone else with the consent of the other shareholders.
With limited liability the company is able to attract capital from people who would not otherwise be prepared to invest.	Since they are not allow to sell shares to the general public it would be difficult to raise funds for expansion or development of the business
The founders of the company can keep control of the business by holding majority of the shares

Public Limited Company

The largest and most important business units are composed of public limited companies. For example Unilever employs over 300,000 people and their sales average over 60 million every day of the year. Public limited companies are operated by a wide range of investors. The name of such companies must end with the words “Public limited company” (plc). Below are some advantages and disadvantages of a Public Limited Company. 

Advantages	Disadvantages
Limited liability due to its independent legal status	Complex formalities in the initial forming of the organization
Contrary to Private limited companies, it is allowed to appeal the general public for funds	Raising capital can be expensive
No restriction in the transferring of shares	Have to comply with several regulations put forth by the government in order to protect the shareholder or the general public.
	The owners have little control over the business.

Voluntary Organizations

 Voluntary organization also known as non-profit organizations include private societies and charities run by individuals. The prime beneficiary of such organizations is public at large. Below are some advantages and disadvantages of Voluntary Organizations. There are a range of functions that are carried out by voluntary organizations. Some of these functions include:

·         Culture and recreation.

·         Education and research.

·         Health.

·         Social Services.

·         Development and housing.

·         Environment.

Advantages	Disadvantages
Flexibility – Such organizations are easy to setup and close down if needed.	Unlimited liability.
Privacy – Have total control over the operations of the organization.	Will not be able to carry out projects that require a big budget.
Reputation – Since such organizations exist to make contributions to community care, with the activities carry out for this purpose they will be able to have a high reputation among the citizens.	The income received through charity can only be used for the organization’s charitable objectives.
Income can be earned through charities.
Relieved from having to pay taxes. Example: No cooperation tax.

Cooperatives

A cooperative is defined as a business which is owned and operated by a group of individuals for their mutual benefit. Some of the types of cooperatives include:

·         Retail Cooperatives.

·         Farming Cooperatives.

·         Consumer Cooperatives

·         Worker Cooperatives.

One of the largest cooperative is The Cooperative Group in UK. Currently they operate 4,500 retail outlets and almost 87,000 employees. Their purpose as mentioned in their website is “Championing a better way to do business for you and your communities”. This company branched out their business in the field of electricity, estates, funeral care and insurance etc.

As mentioned above the certain types of cooperatives, they all have distinguishing characters from one other. They can be characterized by the structure as well as the product or service they provide. The labels they are given depends on either the structure or a service. For example a group of individuals form a cooperative to open a grocery store to sell food. This is called a consumer cooperative as well as a food cooperative. One label is defined by the structure; the consumer and the other is labeled by the product or service; food. Either one of these labels can be used to form the cooperative.

Advantages	Disadvantages
Open membership – Unless specified any individual can join the cooperative and leave when he sees fit.	Limited resources – Financial strength depends on the capital of its members and since the members involve individuals belonging to lower or middle class makes it difficult to operate large scale projects.
Service motive – Assists its members and consumers on the marketing and production of the products or services.	Inefficient Management – An open membership has its drawback when its members do not have the required knowledge of skills to sustain and grow the business.
Democratic Management – equality is widely practiced among all members thus every member has a say in the decisions made.	Disputes among members – Another drawback of having and open membership is it allows people of different views and background to join as members thus forming disputes.
Stability and continuity – Since membership is open to all, the cooperative does not stop its operations due to a death or leaving of a member. With new members comes new ideas and this allows for a stability and continuation.	Lack of secrecy – The operations of the cooperative is discussed is openly discussed which allows for competitors to compete easily.

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