Areas of conflict between stakeholders

Due to the demands placed on businesses by so many different stakeholders, it is no surprise that there are often disagreements and conflict between the different groups.

Shareholders and management

Profit maximisation is normally the main objective of shareholders which results in large dividend payments for them. On the other hand it is likely that the managers of the business will aim to profit satisfy rather than profit maximise which means that they will aim to earn a satisfactory level of profits and then use the remaining resources to conduct other objectives.This conflict between these two groups is normally know as divorce of ownership and control.

Customers and the business

If the product that has been purchased is of poor quality or is poor value for money customers are less likely to continue to be loyal and repeat purchasing from the business. More customers are willing to complain about the quality of products and after-sales service than ever before. The business must ensure that it has a number of procedures in order to satisfy the unhappy customer, refund any financial loss that they may have happened and also to persuade them to remain loyal to the business.

Suppliers and the business

Suppliers are often known for complaining about the lack of payments from businesses for deliveries of the raw materials. If this became a regular problem, the suppliers could refuse credit to the businesses. They could even stop all dealings with them. However, many businesses have been known for complaining about the late deliveries from suppliers. They could also complain about the uncertain quality of the parts once they have been inspected.

The community and the business

The local community can often suffer  because of a large company through the negative consequences of pollution, noise, obstruction and the building of new factories in areas of the community that people may believe is beautiful. On the other hand, the company may decide to relocate to another area if the business faces protests from local residents and also from pressure groups that are concerned about its actions. This causes unemployment and falls in investment in the community that it leaves behind.