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