U09061U09061MANAGING BUSINESS MANAGING BUSINESS
RELATIONSHIPSRELATIONSHIPS
Karas/MBR 0910
JUDI KARAŚJUDI KARAŚUnit Co-ordinatorUnit Co-ordinator
TEACHING TEAMTEACHING TEAMJohn BaldryJohn Baldry Hazel BeadleHazel Beadle
Chris ChapleoChris Chapleo Ray FrenchRay French
David HallDavid Hall Jennifer Jennifer JohnstonJohnston
Karen Karen McCormickMcCormick Vijay PereiraVijay Pereira
Vesselin Vesselin BlagoevBlagoev
WEEK 1 :WEEK 1 :RELATIONSHIPS AND RELATIONSHIPS AND
STAKEHOLDERSSTAKEHOLDERS
Karas/MBR 0910
• Unit Overview – Learning, Teaching and Assessment
• Why study MBR?• Which Business Relationships?• A Stakeholder Perspective• The ‘MBR Diamond’
Unit OverviewUnit Overview
Karas/MBR 0910
20 Credits = 200 hours’ Student Effort Classes (22 hours) + Exam (2 hours) =
176 HOURS’ INDEPENDENT STUDY comprising Seminars Reading Research, preparation, rehearsal and delivery of assessed
group presentation and writing and submission of group assignment
Revision
Assessment – See Unit Handbook Group Case Analysis – Presentation and Written Report =
40% of total marks Two Hour Exam = 60% of total marks
Why Study Business Why Study Business RelationshipsRelationships??
Karas/MBR 0910
“Mutually beneficial relationships including employees, investors and other stakeholders,
result in confidence and trust that can carry an organization through the inevitable hard times.”
Source: The Universal Manager-report
Which ‘Business Which ‘Business Relationships’?Relationships’?
Karas/MBR 0910
Intra-organisational (internal) relationships Person to person
Leadership, management and power
Inter-organisational (external) relationships Person to business
Morgan Spurlock & McDonalds Business to person
Gerald Ratner’s decanter and earrings Business to business
Nike’s 100% outsourcing strategy Strategic alliances
Relationships : A Stakeholders’ Relationships : A Stakeholders’ PerspectivePerspective
Karas/MBR 0910
Definition“Any individual or group which has an interest in and/or is affected by the goals, operations or activities of the organisation or the behaviour of its members.” Mullins (2005) p.1063
Classifying StakeholdersClassifying Stakeholders
Karas/MBR 0910
Internal StakeholdersOwners
Decision-makersUnions and employees
The Organization
Marketplace StakeholdersCustomers
CompetitorsSuppliers
External StakeholdersGovernment
Political or Activist groupsFinancial communityTrade associations
Greenley Greenley 1989 p.1531989 p.153
Defining StakeholdersDefining Stakeholders
Karas/MBR 0910
Finlay 2000, pp.13-15Primary/Active: “always want more”providers of capitalcustomersemployeessuppliersSecondary/Passive: “want acceptable
performance”governmentpressure groups including local communities
Stakeholder PowerStakeholder Power(Johnson and Scholes 2003 – see Handbook)
Karas/MBR 0910
Sources of power (internal stakeholders) formal hierarchical power informal power control of strategic resources including skills
Sources of power (external stakeholders) control of strategic resources involvement with organisation links : internal and external (e.g. media)
Stakeholder MappingStakeholder Mapping(Mendelow 1991 cited in Johnson and Scholes (Mendelow 1991 cited in Johnson and Scholes
1993)1993)
Karas/MBR 0910
High Low
LowA
Few problems
BUnpredictabl
e butmanageable
High
CPowerful
butpredictabl
e
DGreatest danger or
opportunities
Low High
LowA
Minimaleffort
BKeep
Informed
High
CKeep
satisfied
DKey
players
POWER/DYNAMISM MATRIXPOWER/DYNAMISM MATRIX POWER/INTEREST MATRIXPOWER/INTEREST MATRIX
Power
Power
Predictability Level of Interest
see Handbook pp.55-60 for required readingsee Handbook pp.55-60 for required reading
Stakeholder MappingStakeholder Mapping(Mitchell et al 1997)(Mitchell et al 1997)
Karas/MBR 0910
Three Alternative Dimensions
Power
Legitimacy : legal, or standing in society
Urgency : requires immediate attention
Stakeholders in PracticeStakeholders in Practice
Karas/MBR 0910
“Vodafone’s success flows from our commitment to sound business conduct and the way we interact with our stakeholders-shareholders, employees, customers, business partners and suppliers, government and regulators, communities and society and the environment.”Source: Vodafone.com Our Business Principles
but … open to interpretation!
Karas/MBR 0910
Michael O’Leary on Ryanair’s StakeholdersEuropean Commission …”morons”BAA …”overcharging rapists”UK air traffic control …”poxy”Travel agents …”f***ers who should be taken out and shot”
The ‘MBR DIAMOND’ The ‘MBR DIAMOND’ (© Karas 2009)(© Karas 2009)
‘the total interconnectedness of all things”‘the total interconnectedness of all things”
Karas/MBR 0910
TrustLevelsDevelopment
EthicsIndividual
Organisational
Transaction CostingCost benefit
“Make or buy”
External Stakeholders
MarketplaceStakeholders
PromiscuityPolygamy
Loyalty
InternalStakeholdersManagementLeadershipPower