IMPROVING RELATIONSHIPS BETWEEN STAKEHOLDERS OF AN ACCA TUITION PROVIDER

IMPROVING RELATIONSHIPS BETWEEN

STAKEHOLDERS OF AN ACCA TUITION PROVIDER

Being a paper presented by Ayodele Samuel Olatiregun

at a 2-day seminar for Faculty Members and Staff held at

Collective College of Accountancy Ltd, EleyeleOn

July 4, 2009

Who is a stakeholder? CCA’s Major Stakeholders Stakeholder Theory Mendelow’s Stakeholder Power Mapping Classification of Stakeholders Improving Relationships between stakeholders Seven Principles of Stakeholder Management Feedback Conclusion

Content Outline

A stakeholder is any person or group of people with an interest in the success of a business.

Note that in this definition we have placed an emphasis on 'the success' of a business. This means that competitors are not included as stakeholders according to this definition because they have an interest in the business but not its success.

Who is a Stakeholder?

Who is a Stakeholder?

1. The Association of Chartered Certified Accountants (Nigeria and U.K.) = supplier

2. Lecturers = supplier3. Staff = employees4. Students = consumers5. Management = Management6. Shareholders = Shareholders In my current capacity as the Rector and major

shareholder, permit me to speak more as the Manager of the College rather than as a shareholder.

CCA’s Major Stakeholders

Business is permitted and encouragedby the law because it is of service to thecommunity rather than because it is asource of profits to its owners.”- E. Merrick Dodd

In other words, service to the community (academic, professional and general) is the primary purpose of our existence.

Stakeholder Theory

Mendelow’s StakeholderPower Mapping

A. Minimal Effort

B. Keep Informed

Level of Interest

Low

High

Pow

er

C. Keep Satisfied

D. Strategy must be acceptable

Low High

The two axes of Mendelow’s window arepower held and likelihood of showing aninterest in the organisation’s activities.

Power is the stakeholder’s ability to influenceobjectives

Interest is the stakeholder’s willingness

Influence = Power x Interest

Mendelow’s StakeholderPower Mapping

Proximity to organisationInternal such as employees / management

Connected such as shareholders,customers, suppliers (faculty) , lenders,

competitors, trade unions

External such as government, localgovernment, public, pressure groups

Classification of Stakeholders

Narrow and wide stakeholders

Narrow: Most affected by organisation’sstrategy such as shareholders, suppliers

Wide: Less affected by organisation’sstrategy such as government, community

Classification of Stakeholders

The stakeholders in a corporation are the individuals and constituencies that contribute, either voluntarily or involuntarily, to its wealth-creating capacity and activities, and that are therefore its potential beneficiaries and/or risk bearers. – Jams E.Post

The condensed idea: ‘We’re all in this together’

Improving Relationships between stakeholders

Stakeholder Management is key to improving relationships between stakeholders

The Redefining the Corporation project has drawn up seven principles of stakeholder management

Improving Relationships between stakeholders

Principle 1 - Managers should acknowledge and actively monitor the concerns of all legitimate stakeholders, and should take their interests appropriately into account in decision-making and operations

Our Viewpoint: This principle is paramount to the continued existence of the College. We are working towards producing a stakeholder charter to fully achieve this principle.

Seven Principles of Stakeholder Management – Principle 1

Principle 2 - Managers should listen to and openly communicate with stakeholders about their respective concerns and contributions, and about the risks that they assume because of their involvement with the corporation.

Our Viewpoint: This principle requires honesty, integrity and objectivity on the part of the stakeholders when making known their concerns. CCA will operate an open-door policy to enhance communication between the college and its stakeholders.

Seven Principles of Stakeholder Management – Principle 2

Principle 3 - Managers should adopt processes and modes of behaviour that are sensitive to the concerns and capabilities of each stakeholder constituency

Our Viewpoint: This principle requires the management to develop multi-lateral communication systems with stakeholders.

Seven Principles of Stakeholder Management – Principle 3

Principle 4 - Managers should recognise the interdependence of efforts and rewards among stakeholders, and should attempt to achieve a fair distribution of the benefits and burdens of corporate activity among them, taking into account their respective risks and vulnerabilities.

Our Viewpoint: This principle requires all stakeholders to put in efforts that would attract better rewards, due to enhanced performance.

Seven Principles of Stakeholder Management – Principle 4

Principle 5 - Managers should work cooperatively with entities, both public and private, to insure that risks and harms arising from corporate activities are minimised and, where they cannot be avoided, appropriately compensated.

Our Viewpoint: This principle is core to our corporate social responsibility perspective.

Seven Principles of Stakeholder Management – Principle 5

Principle 6 - Managers should avoid altogether activities that might joepardise inalienable human rights (e.g. right to life) or give rise to risks which, if clearly understood, would be patently unacceptable to relevant stakeholders.

Our Viewpoint: This principle is core to our corporate social responsibility perspective.

Seven Principles of Stakeholder Management – Principle 6

Principle 7 - Managers should acknowledge the potential conflicts between (a) their own role as corporate stakeholders, and (b) their legal and moral responsibilities for the interests of stakeholders, and should address these through open communication, appropriate reporting and incentive systems and, where necessary, third party review

Our Viewpoint: This principle is core to our corporate social responsibility perspective.

Seven Principles of Stakeholder Management – Principle 7

Place the four major stakeholders in each of the boxes A to D.◦ ACCA◦ Lecturers ◦ Employees ◦ Students

Feedback

A. Minimal Effort

B. Keep Informed

Level of Interest

Low

High

Pow

er

C. Keep Satisfied

D. Strategy must be acceptable

Low High

I hope that as I have been able to identify the stakeholders of the college and also analyse their influence on the corporate objectives of the college through the assessment of Mendelow Stakeholder Mapping theory, there would be progress in our stakeholder relationship management moving forward.

Conclusion

Questions and Answers