Stakeholder Conflict

Stakeholder conflict occurs when different stakeholders have different objectives. Firms may have to choose between maximizing one objective and satisfactorily meeting several stakeholder objectives, so called satisficing.

Stakeholder conflict refers to a situation in which the interests or goals of different stakeholders in an organization are in conflict with one another. Stakeholders in an organization can include shareholders, employees, customers, suppliers, creditors, and the community.

Some examples of stakeholder conflict include:

  1. Shareholders vs. employees: Shareholders may want the company to focus on maximizing profits, while employees may be more concerned with job security, pay, and working conditions.
  2. Customers vs. suppliers: Customers may want the lowest possible prices for goods and services, while suppliers may want to be paid a fair price for the products they provide.
  3. Employees vs. management: Employees may want more input into decision-making and a greater share of profits, while management may want to retain control and maintain profitability.
  4. Shareholders vs. the community: Shareholders may want the company to focus on maximizing profits, while the community may be concerned with the environmental impact of the company's operations or the social responsibilities of the company.

Stakeholder conflict can be difficult to manage and can lead to disputes and negative outcomes for the organization and its stakeholders if not properly addressed.

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