Enterprise and Entrepreneurial Management. Module Leader : Steve McDonald Module Tutor : Dorothy Hawkins

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1 Enterprise and Entrepreneurial Management Module Leader : Steve McDonald Module Tutor : Dorothy Hawkins

2 Enterprise and Entrepreneurial Management MOD Identifying and Communicating with Stakeholders

3 Aims of the lecture To identify common stakeholder groups so that you can identify the stakeholders in your enterprise To consider the need for communication with the various business stakeholders in a start-up situation To begin to consider how to manage the key stakeholders of your enterprise

4 STAKEHOLDERS People or small groups with the power to respond to, negotiate with, and change the strategic future of the organization (Eden and Ackermann, p117). For some businesses these small groups can be very powerful protest groups, such as Greenpeace.

5 STAKEHOLDERS In discussing not-for-profit organisations, Bryson (2004) gives a wider definition which includes people who do not have the power to negotiate with an organisation. He extends the definition to those affected by a strategic change the organisation may make, so including the concept of social justice.

6 STAKEHOLDERS Stakeholders can be defined as any individual(s) or group(s) having an interest in the activities or performance of a business.

7 SOME COMMON GROUPS OF STAKEHOLDERS INTERNAL Employees Managers Owners (partners/shareholders) EXTERNAL Suppliers Customers Lenders Government Competitors

8 OTHER STAKEHOLDERS will vary according to the type of business and its operations. For example : local residents may be affected by manufacturing processes or deliveries (noise/light/pollution) environmental concerns may affect the wider community

9 IDENTIFY YOUR STAKEHOLDERS WHO ARE THE KEY STAKEHOLDERS IN YOUR ENTERPRISE? This will be considered in the seminar this week.

10 STAKEHOLDER CONFLICT Stakeholders have varying objectives and demands which can be difficult impossible to reconcile. For example : investors want to maximise profits but employees want to maximise wages (which will increase costs and decrease profits, in the short term at least).

11 RESOLVING STAKEHOLDER CONFLICT As early as 1984 Martin Weitzman suggested all employee pay should be profit-sharing to reflect business performance. This is one way of reducing conflict between investors and employees. It has been adopted by some organisations such as the John Lewis Partnership.

12 IDENTIFY YOUR POSSIBLE STAKEHOLDER CONFLICT CONSIDER ANY STAKEHOLDER CONFLICTS INHERENT IN YOUR ENTERPRISE This will be considered in the seminar this week.

13 STAKEHOLDER COMMUNICATION It is important to communicate with stakeholders : to promote loyalty to prevent / resolve conflict to control the brand message

14 THE COMMUNICATION MODEL Medium Message # # # # # # # # Sender # # # # # Noise # # # # # # # # # # # # Feedback Receiver

15 THE PYRAMID PRINCIPLE Barbara Minto (1996), a management consultant, has made an in-depth study of the effectiveness of business communication.

16 THE PYRAMID PRINCIPLE - a business should..... Aim to control and deliver one key point, rather than let the recipient choose it Order information to build a pyramid of understanding one key message up to 5-8 supporting ideas arguments to justify the supporting ideas evidence that backs up the arguments

17 THE PYRAMID PRINCIPLE - for the supplier..... KEY MESSAGE : supply my business SUPPORTING IDEAS : it will be a regular order : I will pay on time ARGUMENTS TO JUSTIFY : good market research : strong cash flow EVIDENCE : copy of (lender-approved) market research : copy of (lender-approved) cash flow forecast

18 YOUR STAKEHOLDERS What is the key message for each of the stakeholder groups in your enterprise? One of the things your market research should test is the key message you plan to deliver to your customers.

19 YOUR STAKEHOLDERS How will you communicate with the stakeholder groups in your enterprise? One of the key issues for your assignment is how you will communicate with one of your main stakeholder groups your customers.

20 NEXT WEEK The lecture will focus on Financial Planning You should read Week 7 of the key text to prepare for your lecture and seminar

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