Stakeholder Groups U4S3P34

Lynch 2003

1. Those who have to carry out the actions necessitated by the strategy
2. Those who have a stake in the outcome

Hitt et al (2003) list three groups

1. Capital market stakeholders
2. Product market stakeholders
3. Organisational stakeholders

Argenti (2003) splits stakeholders into primary (Managers, Employees, Customers, Shareholders, Communities) and secondary (media, suppliers, government [local/regional/national], creditors, ngos). Primary stakeholders provide resources without which the firm cannot operate.

Agency theory of the firm (manager is the owner's agent) creates a potential conflict of interest - moral hazard - where managers may use their discretion to control assets for their own benefit.

Moral Hazard - actions by party A which affect party B but cannot be monitored or evaluated fully by party B