Create you own mindmap of stakeholders using this template. Make sure you clearly mention each stakeholder's main objectives in context.

• Look at the graphic above and identify at least 5 potential conflicts that can occur between different stakeholders.

  • • • E.g Higher wages for employees conflicts with owners desire to make more profits as their costs of production rise.

• ✓ More job and career opportunities.

• ✓ Increased spending in local businesses.

• ✗   More complex lines of communication after expansion.

• ✗ External costs caused by increased business activities

• ✓ The larger business may be more secure and offer career promotion opportunities.

• ✓ If the business expands on the existing site, local job vacancies and incomes might increase.

• ✗ Rationalisation of duplicated offices or factories might lead to closures and job losses.

• ✓ Training and promotion opportunities might be offered.

• ✓ Local businesses providing IT services could benefit from increased orders.

• ✗ Fewer untrained staff will be required and those unable to learn new skills may be made redundant.

• ✗ Specialist workers may not be available locally, so more staff may need to commute.

• WORKER PARTICIPATION refers to ALLOWING WORKERS TO PARTICIPATE in decision-making and reduce potential conflicts between workers and managers, e.g., works councils, employee directors.

• Workers have a real contribution to make to many business decisions. Participation can motivate employees to work more effectively.

• Some managers believe that participation wastes time and resources and that it is the managers’ role to manage, not the workers’

• Some information cannot be disclosed to employees other than senior managers, e.g., sensitive details about future product launches.

• PROFIT SHARING Profit-sharing schemes – to reduce conflict between workers and shareholders over the allocation of profits and to share the benefits of company success.

• The workforce is allocated a share of annual profits before these are paid out in dividends to shareholders. 

• Sharing business profits can encourage workers to work in ways that will increase long- term profitability.

• Paying workers a share of the profits can reduce retained profits (used for expansion of the business) and/or profits paid out to shareholders, unless the scheme results in higher profits due to increased employee motivation.

SHARE-OWNERSHIP SCHEMES – to reduce conflict between workers, managers and shareholders.

These schemes, including share options (the right to buy shares at a specified price in the future), aim to allow employees (at all levels, including directors) as well as shareholders to benefit from the success of the business. Share ownership should help to align the interests of employees with those of shareholders.

Administration costs, negative impact on employee motivation if the share price falls, dilution of ownership – the issue of additional shares means that each owns a smaller share of the company

Employees may have to stay with the company for a certain number of years before they qualify, so the motivation effect on new staff may be limited.