Business Relationships

Relationships between a business and its stakeholders can

be either co-operative or competitive
A co-operative relationship occurs when they work together
towards a common goal in a mutually beneficial way (winwin)
A competitive relationship occurs when both parties want the
same thing but only one of them gets it (win-lose)

Co-operation within a business

Co-operation between Stakeholders
Employees work in teams
Employees and employers agree on wages and work
conditions
Producers listen to feedback from their customers
Investors give funding to entrepreneurs who keep them
informed and rewarded

Competition within businesses

Competition between Stakeholders
Employees compete with other employees for promotion
Employees look for increased wages but employers want to
keep costs to a minimum

Co-operation between businesses

Two or more companies may form a strategic alliance
They will share skills, ideas, costs and profits
Example: General Motors and Citroen jointly developed the
Opel Corsa and Citroen C3 cars

Competition between businesses

Two producers or service providers may compete on prices,
e.g. Ryanair and Aer Lingus
Consumers benefit from lower prices

Recap of People in Business

Can you give two examples of a co-operative and
competitive relationship in business?
Describe the relationship between a producer and supplier
both co-operative and competitive?

Conflict between Stakeholders

Causes of Conflict:
1. Different Objectives each side want to give little but get
as much as possible.
2. Negotiating style an aggressive style is likely to cause
more conflict.
3. Changing Circumstances if the balance of advantage is
upset by change, stakeholders will seek to restore any
advantage they may have had.

Resolving Conflict
Non-Legislative resolution of conflict:
Talk it out discuss the issues and agree on a solution.
Negotiation opposing sides enter a negotiation process. Both sides
work through discussions with Offers and Counter offers until an
agreement is accepted between both sides.
Conciliation A third party enters the frame and meets both party's
separately first and then with both parties. A conciliator does not provide
a solution but helps each party understand their differences so a solution
may be agreed.
Arbitration A third party enters which both parties agree upon
beforehand. He/she examines the conflict and recommends a solution to
the problem.

Resolving Conflict

Legislative resolutions of conflict:

Conciliation and Arbitration provided by an organisation
set up by law.
Court taking the conflict to court.