Description
This is a PPT is about stakeholders of organisation details.
Stakeholders of organisations
Organizational Stakeholders
• • • Stakeholders: people who have an interest, claim, or stake in an organization Inducements: rewards such as money, power, and organizational status Contributions: the skills, knowledge, and expertise that organizations require of their members during task performance
2
Inducements and Contributions of Stakeholders
3
Inside Stakeholders
• People who are closest to an organization and have the strongest and most direct claim on organizational resources
– Shareholders: the owners of the organization – Managers: the employees who are responsible for coordinating organizational resources and ensuring that an organization’s goals are successfully met – The workforce: all non-managerial employees
4
Outside Stakeholders
• People who do not own the organization, are not employed by it, but do have some interest in it
– Customers: an organization’s largest outside stakeholder group – Suppliers: provide reliable raw materials and component parts to organizations – The government
• Wants companies to obey the rules of fair competition • Wants companies to obey rules and laws concerning the treatment of employees and other social and economic issues
5
Outside Stakeholders
– Trade unions: relationships with companies can be one of conflict or cooperation – Local communities: their general economic well-being is strongly affected by the success or failure of local businesses – The general public
• Wants local businesses to do well against overseas competition • Wants corporations to act in socially responsible way
Copyright 2007 Prentice Hall
6
Organizational Effectiveness: Satisfying Stakeholders’ Goals and Interests • An organization is used simultaneously by various stakeholders to achieve their goals
– Shareholders: return on their investment – Customers: product reliability and product value – Employees: compensation, working conditions, career prospects
• For an organization to be viable, the dominant coalition of stakeholders has to control sufficient inducements to obtain the contributions required of other stakeholder groups
7
Competing Goals
• Organizations exist to satisfy stakeholders’ goals • But which stakeholder group’s goal is most important? • Managers control organizations and may further their own interests instead of those of shareholders • Goals of managers and shareholders may be incompatible
8
Allocating Rewards
• Managers must decide how to allocate inducements to provide at least minimal satisfaction of the various stakeholder groups. • Managers must also determine how to distribute “extra” rewards.
9
Top Managers and Organizational Authority
• Authority: the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources • The board of directors: monitors corporate managers’ activities and rewards corporate managers who pursue activities that satisfy stakeholder goals
– Inside directors: hold offices in a company’s formal hierarchy – Outside directors: not full-time employees
• May hold positions on the board of many companies
Copyright 2007 Prentice Hall 10
The Chief Executive Officer’s (CEO) Role in Influencing Effectiveness
• Responsible for setting organizational goals and designing its structure • Selects key executives to occupy the topmost levels of the managerial hierarchy • Determines top management’s rewards and incentives
11
The CEO’s role in influencing organizational effectiveness
• Controls the allocation of scarce resources such as money and decision-making power among the organization’s functional areas or business divisions • The CEO’s actions and reputation have a major impact on inside and outside stakeholders’ views of the organization and affect the organization’s ability to attract resources from its environment
12
The Top-Management Team
• Line-role: managers who have direct responsibility for the production of goods and services • Staff-role: managers who are in charge of a specific organizational function such as sales or research and development (R&D)
– Are advisory only
Copyright 2007 Prentice Hall
13
The Top-Management Team • Top-management team: a group of managers who report to the CEO and COO and help the CEO set the company’s strategy and its long-term goals and objectives • Corporate managers: the members of topmanagement team whose responsibility is to set strategy for the corporation as a whole
14
Other Managers
• Divisional managers: managers who set policy only for the division they head • Functional managers: managers who are responsible for developing the functional skills and capabilities that collectively provide the core competences that give the organization its competitive advantage
15
The Organizational Environment
16
16
An Agency Theory Perspective Ownership is differentiated from control • Agency problem: a problem in determining managerial accountability which arises when delegating authority to managers • Shareholders are at information disadvantage compared to top managers • Top managers and shareholders may have different goals
17
The Moral Hazard Problem
• Two conditions create the moral hazard problem
– Very difficult to evaluate how well the agent has performed because the agent possesses an information advantage – The agent has an incentive to pursue goals and objectives that are different from the principal’s
18
Stake holder analysis Stake holders Share holders Entry Performance Crisis
Managers
Employees
Government
Suppliers Customers Public
Who is the most important stakeholder?
doc_190284025.pptx
This is a PPT is about stakeholders of organisation details.
Stakeholders of organisations
Organizational Stakeholders
• • • Stakeholders: people who have an interest, claim, or stake in an organization Inducements: rewards such as money, power, and organizational status Contributions: the skills, knowledge, and expertise that organizations require of their members during task performance
2
Inducements and Contributions of Stakeholders
3
Inside Stakeholders
• People who are closest to an organization and have the strongest and most direct claim on organizational resources
– Shareholders: the owners of the organization – Managers: the employees who are responsible for coordinating organizational resources and ensuring that an organization’s goals are successfully met – The workforce: all non-managerial employees
4
Outside Stakeholders
• People who do not own the organization, are not employed by it, but do have some interest in it
– Customers: an organization’s largest outside stakeholder group – Suppliers: provide reliable raw materials and component parts to organizations – The government
• Wants companies to obey the rules of fair competition • Wants companies to obey rules and laws concerning the treatment of employees and other social and economic issues
5
Outside Stakeholders
– Trade unions: relationships with companies can be one of conflict or cooperation – Local communities: their general economic well-being is strongly affected by the success or failure of local businesses – The general public
• Wants local businesses to do well against overseas competition • Wants corporations to act in socially responsible way
Copyright 2007 Prentice Hall
6
Organizational Effectiveness: Satisfying Stakeholders’ Goals and Interests • An organization is used simultaneously by various stakeholders to achieve their goals
– Shareholders: return on their investment – Customers: product reliability and product value – Employees: compensation, working conditions, career prospects
• For an organization to be viable, the dominant coalition of stakeholders has to control sufficient inducements to obtain the contributions required of other stakeholder groups
7
Competing Goals
• Organizations exist to satisfy stakeholders’ goals • But which stakeholder group’s goal is most important? • Managers control organizations and may further their own interests instead of those of shareholders • Goals of managers and shareholders may be incompatible
8
Allocating Rewards
• Managers must decide how to allocate inducements to provide at least minimal satisfaction of the various stakeholder groups. • Managers must also determine how to distribute “extra” rewards.
9
Top Managers and Organizational Authority
• Authority: the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources • The board of directors: monitors corporate managers’ activities and rewards corporate managers who pursue activities that satisfy stakeholder goals
– Inside directors: hold offices in a company’s formal hierarchy – Outside directors: not full-time employees
• May hold positions on the board of many companies
Copyright 2007 Prentice Hall 10
The Chief Executive Officer’s (CEO) Role in Influencing Effectiveness
• Responsible for setting organizational goals and designing its structure • Selects key executives to occupy the topmost levels of the managerial hierarchy • Determines top management’s rewards and incentives
11
The CEO’s role in influencing organizational effectiveness
• Controls the allocation of scarce resources such as money and decision-making power among the organization’s functional areas or business divisions • The CEO’s actions and reputation have a major impact on inside and outside stakeholders’ views of the organization and affect the organization’s ability to attract resources from its environment
12
The Top-Management Team
• Line-role: managers who have direct responsibility for the production of goods and services • Staff-role: managers who are in charge of a specific organizational function such as sales or research and development (R&D)
– Are advisory only
Copyright 2007 Prentice Hall
13
The Top-Management Team • Top-management team: a group of managers who report to the CEO and COO and help the CEO set the company’s strategy and its long-term goals and objectives • Corporate managers: the members of topmanagement team whose responsibility is to set strategy for the corporation as a whole
14
Other Managers
• Divisional managers: managers who set policy only for the division they head • Functional managers: managers who are responsible for developing the functional skills and capabilities that collectively provide the core competences that give the organization its competitive advantage
15
The Organizational Environment
16
16
An Agency Theory Perspective Ownership is differentiated from control • Agency problem: a problem in determining managerial accountability which arises when delegating authority to managers • Shareholders are at information disadvantage compared to top managers • Top managers and shareholders may have different goals
17
The Moral Hazard Problem
• Two conditions create the moral hazard problem
– Very difficult to evaluate how well the agent has performed because the agent possesses an information advantage – The agent has an incentive to pursue goals and objectives that are different from the principal’s
18
Stake holder analysis Stake holders Share holders Entry Performance Crisis
Managers
Employees
Government
Suppliers Customers Public
Who is the most important stakeholder?
doc_190284025.pptx