Stakeholders and their effect on the decisions that organisations make

by Business Case Studies on Tuesday 29th November, 2011

Primark Logo

Primark

Stakeholders may have a significant effect on the decisions that organisations make.

Edinburgh’s Telford College is starting merger talks with two others in the city, Stevenson and Jewel & Esk.  Telford’s chairman, Jim Donaldson, said: ‘All three Edinburgh colleges work collaboratively already, but we consider that the best way now to develop skills and learning opportunities, particularly for the city’s school leavers and young people, is to work together to create a single, merged college for Edinburgh.  The decision to move towards merger is subject to satisfactory outcomes from a full consultation process with students, staff and our key stakeholders in industry and commerce.’ (BBC, 22nd November 2011)

However, a similar planned merger of two North East colleges has collapsed after one pulled out of the deal following opposition from staff and students.  Northumberland College had planned to join forces with the Newcastle College Group but a spokesman for Northumberland College said the strength of opposition meant the merger was no longer in its best interests.  ‘Students, staff and stakeholders did not want this merger to happen.  We have listened to these concerns and have made the right choice in the interests of Northumberland.’ (BBC, 20th November 2011)

The fashion store, Primark, acknowledges that its external stakeholders may have a high level of influence over its activities.  Primark understands that one external stakeholder group in particular, the worker communities that supply the garments and products it sells, plays a vital role in ensuring that the business can meet its objectives. Click here for lesson resources

To ensure that this vital part of its supply chain remains robust, Primark has set up different ways of engaging with these stakeholders to address their different needs.  Primark has set up long-term programmes in its worker communities to develop awareness of, for example, health improvement, employees’ rights and safety at work.  It has also formed partnerships with banks to provide support with using accounts and setting up savings.

It uses a variety of different methods to communicate effectively with its stakeholder groups, including through its website and its membership of key organisations such as the Ethical Trade Initiative and the International Labour Organization.

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