// 1 PEOPLE AND RELATIONSHIPS IN BUSINESS PEOPLE

Transcript:// 1 PEOPLE AND RELATIONSHIPS IN BUSINESS PEOPLE:
// 1 PEOPLE AND RELATIONSHIPS IN BUSINESS PEOPLE IN BUSINESS Objectives UNDERSTANDING RELATIONSHIPS BETWEEN STAKEHOLDERS In this section we will Describe the relationships between people as workers, as trade union members, as managers, as entrepreneurs, as investors and as customers. Describe examples of co-operative and competitive relationships. Outline, using examples, the relationships that can exist between stakeholders in business. Analyse the relationships between people in business. (HL) UNDERSTANDING RELATIONSHIPS BETWEEN STAKEHOLDERS Key Terms Co-operative relationship, competitive relationship, dependent relationship, dynamic relationship UNDERSTANDING RELATIONSHIPS BETWEEN STAKEHOLDERS In business, a web of relationships exists between stakeholders. Each stakeholder has their own wants and objectives that they will strive to achieve. When stakeholders work together towards a common goal or objective, they have a co-operative relationship. They act in a way that benefits both parties (is mutually beneficial or win–win). When stakeholders are rivals or pursue an objective at the other’s expense, they have a competitive relationship (or a win–lose relationship). UNDERSTANDING RELATIONSHIPS BETWEEN STAKEHOLDERS (continued) When stakeholders are reliant on each other to achieve their individual goals, they have a dependent relationship. When the relationship between stakeholders is changeable, it is called a dynamic relationship. At times they may co-operate or depend on each other and at other times they may be in competition. Co-operative and competitive relationships 1. Entrepreneur and investor Co-operative The entrepreneur shares honest information with the investor (such as an accurate business plan and cash flow forecasts) and in return the investor offers finance for a reasonable share or interest rate. Competitive An investor may want immediate or greater returns from profits, rather than allowing the owner to keep funds for further expansion – something an entrepreneur might prefer, but a greater risk for the investor. Co-operative and competitive relationships 2. Rival businesses Co-operative Rivals in the marketplace could decide to share market research costs. For example, Ryanair and Aer Lingus might share the cost of one market research study on airline customers’ holiday habits. They both benefit by receiving better information on their shared market than they could afford individually. Competitive An investor may want immediate or greater returns from profits, rather than allowing the owner to keep funds for further expansion – something an entrepreneur might prefer, but a greater risk for the investor. Co-operative and competitive relationships 3. Employer and employee Co-operative An employer may pay for an external training course for the employee. The