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How Does a Business Resolve Stakeholder Conflicts?

We have looked at examples where conflicts between different stakeholders can occur. For many businesses, how they handle these conflicts is an important part of their business. Get it right and the business is able to progress and grow. Get it wrong and it could spell problems for the business.

The following case studies show some examples where a business has faced such a conflict. Read through them carefully.

Nike

In the late 1990s, there were reports circulating that Nike, the sports shoes and sports clothing company, were exploiting workers in factories that make products for the company. Nike uses 124 plants in China, 73 in Thailand, 35 in Korea and 34 in Vietnam, amongst others. Eventually, Nike admitted that the treatment of workers in these plants was not satisfactory. Examples of such exploitation included restricting access to toilets and drinking water for workers, forcing workers to do overtime, not providing workers with a day off, paying wages below the legal minimum and accusations of jobs being given on receipt of favours, including sexual favours.

Nike trainer

Image: Nike - who benefits from the exploitation of workers who make the products for the company? What might the solutions be? Copyright: Taylor Dixson, stock.xchng

Nike has been trying to resolve some of these problems after it saw sales of its products slowing down and it was heavily criticised for what it was doing. Nike has argued that some of the problems are caused by other firms like Wal-Mart who keep prices very low and make it difficult to compete. They have also pointed out that in some cases, the situation is not quite so simple. Some workers, they have argued, want to work overtime so that they can earn more money.


Sunderland FC

Sunderland Football Club gained promotion to the Premiership in May 2005. The club knew that to survive in the big league, it would have to spend money on new players. It also knew that it needed to make sure that the financial position of the club was secure. Previous experience had shown that promoted clubs from the Championship had difficulties staying up. If it spent large sums of money on new players it might have succeeded in staying up - but there was no guarantee of this. The manager, Mick McCarthy, would certainly have liked the chance to buy new players, but the Chairman of the club knew that they had to think about what might happen if the worst-case scenario happened and the club was relegated after just one season.

Footballers on pitch

Image: Things on the pitch have not gone well for Sunderland's players or their fans. The effect of the promotion to the Premiership has impacted on a wide range of the club's stakeholders. If they get relegated, those stakeholders will be affected in different ways.

The fans have had to endure a very difficult season. By February 2006, the club had lost 19 of the 24 games they had played in the Premiership. They were rooted at the bottom of the Premier League and looked almost certain to be relegated. The Chairman, however, has pointed to the fact that relegation will not mean financial disaster for the club if it does happen.


Cadbury

In 2003, Cadbury, the chocolate manufacturer, announced a £9 million pound scheme to put sports equipment in schools across the UK. The scheme involved encouraging customers to save tokens from chocolate bars and give them in to schools. 750 tokens were needed to get the first bit of sports equipment and 2,000 tokens would allow the school to acquire a range of different equipment.

Dairy Milk Basketball hoop

Image: Is a campaign such as the 'Get Active Capmpaign' the way to make children more aware of the importance of healthy exercise or just a ploy to sell more chocolate? Copyright: Luis Lopez and alilat, both from stock.xchng.

For financially hard-pressed schools, the chance to get new equipment was very appealing. Top sports stars such as boxer Audley Harrison and runner Paula Radcliffe had both signed sponsorhip deals with Cadbury and the government also supported Cadbury's 'Get Active Campaign'. The company and the government, however, were criticised for encouraging children to eat more chocolate when there are growing concerns about the problem of obesity in young people.


Task

In groups, take one of the three case studies above. Prepare a presentation to give to the rest of your group based on the following:

  • Outline the different stakeholders affected by the case study you are looking at and explain how they are being affected.
  • Explain what responsibility you think the business concerned has to the stakeholders you have identified.
  • Explain how the case study highlights the conflict that exists beween different stakeholders.
  • Provide some suggested solutions to the conflict that the business concerned faces to help resolve the conflict.

The presentation can be done using different approaches. You can produce a series of posters to highlight the issues, use PowerPoint, produce a short video, write a short report and so on. The presentation should last no more than 10 minutes.

Follow up the presentations by discussing the similarities and differences between the three case studies.

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