Skills and Management Reconciling Conflicting Interests of Stakeholders

  • Every Stakeholder has different priorities for the business. For example:
  • Shareholders want the business to make a profit and receive a return on their investment
  • Employees want good and safe working conditions
  • Potential investors want to see the business working ethically
  • Customers want accurate and reliable products

An example of this would be smartphone companies buying illegal Tantalum, tungsten, tin and gold from workers in the Congo who work a 60 hour weeks with abuse, bullying, unsafe practices and minimal wages.

  • A conflict here would be:
  • The shareholders want to make a profit as illegal mining is cheaper to buy
  • The miners want safer work environments and better pay
  • Investors want to invest in a moral and ethical company
  • Customers want products that work and are ethically good.

To reconcile some businesses create an employee share acquisition scheme. This provides the opportunity for eligible employees to purchase shares in a business, often at a reduced price. This aligns the interests of both groups as a number of employees become shareholders.

Another strategy is is to offer training and professional development to employees as the reduces production costs and it also produces higher quality products for customers.

A 'triple bottom line' business is a business that is the economic, social and environmental performance where shareholder value increases through the careful management of stakeholder value.

Stakeholder engagement refers to businesses sharing information with and seeking input from stakeholders, and involving them in decision making. Businesses anticipate that by engaging stakeholders they are more likely to act in an ethical or socially responsible manner.


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