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U09061
MANAGING BUSINESS RELATIONSHIPS
JUDI KARAŚ
Unit Co-ordinator
TEACHING TEAM
John Baldry
Chris Chapleo
David Hall
Karen McCormick
Vesselin Blagoev
Karas/MBR 0910
Hazel Beadle
Ray French
Jennifer Johnston
Vijay Pereira
WEEK 1 :
RELATIONSHIPS AND STAKEHOLDERS
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Unit Overview – Learning, Teaching and Assessment
Why study MBR?
Which Business Relationships?
A Stakeholder Perspective
The ‘MBR Diamond’
Karas/MBR 0910
Unit Overview
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
Karas/MBR 0910
Why Study Business Relationships?
“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
Karas/MBR 0910
Which ‘Business Relationships’?
 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

Karas/MBR 0910
Relationships : A Stakeholders’ Perspective
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
Karas/MBR 0910
Classifying Stakeholders
Greenley
1989 p.153
Internal Stakeholders
Owners
Decision-makers
Unions and employees
The Organization
Marketplace Stakeholders
Customers
Competitors
Suppliers
Karas/MBR 0910
External Stakeholders
Government
Political or Activist groups
Financial community
Trade associations
Defining Stakeholders
Finlay 2000, pp.13-15
Primary/Active: “always want more”
 providers of capital
 customers
 employees
 suppliers
Secondary/Passive: “want acceptable
performance”
 government
 pressure groups including local communities
Karas/MBR 0910
Stakeholder Power
(Johnson and Scholes 2003 – see Handbook)
 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)
Karas/MBR 0910
Stakeholder Mapping
(Mendelow 1991 cited in Johnson and Scholes 1993)
POWER/DYNAMISM MATRIX
High
Low
Power
High
Predictability Low
A
Few
problems
C
Powerful
but
predictable
B
Unpredictable
but
manageable
D
Greatest
danger or
opportunities
POWER/INTEREST MATRIX
Level of Interest
Low
Low
High
A
Minimal
effort
B
Keep
Informed
C
Keep
satisfied
D
Key
players
Power
High
see Handbook pp.55-60 for required reading
Karas/MBR 0910
Stakeholder Mapping
(Mitchell et al 1997)
Three Alternative Dimensions
 Power
 Legitimacy : legal, or standing in society
 Urgency : requires immediate attention
Karas/MBR 0910
Stakeholders in Practice
“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
Karas/MBR 0910
but … open to interpretation!
Michael O’Leary on
Ryanair’s Stakeholders
 European Commission
…”morons”
 BAA …”overcharging
rapists”
 UK air traffic control
…”poxy”
 Travel agents …”f***ers
who should be taken
out and shot”
Karas/MBR 0910
The ‘MBR DIAMOND’ (© Karas 2009)
‘the total interconnectedness of all things”
External Stakeholders
Trust
Ethics
Levels
Development
Individual
Organisational
Marketplace
Stakeholders
Promiscuity
Polygamy
Loyalty
Karas/MBR 0910
Internal
Stakeholders
Transaction Costing
Cost benefit
“Make or buy”
Management
Leadership
Power