Page 4: Dealing with stakeholder conflict
Whenever a business tries to meet the needs of many different stakeholders, there is the potential for stakeholder conflict. This is where different stakeholder groups might have different priorities. For example, the three million members of The Co-operative Group may have different priorities from its ten million customers. Ethical activities may not always be commercially viable.
In these circumstances managers have to make decisions that some members might not like. It is always important that the reasons for such decisions are communicated to members. This will help them to understand why they have been made. For example, The Co-operative has been switching many of its products to Fairtrade suppliers.
Supporting Fairtrade products is part of The Co-operative's ethical trading policy. Fairtrade suppliers are promised a price level that helps them to make their businesses sustainable. This helps the suppliers to invest in their businesses. It also ensures they are not damaging their resources for the next generation. Treating this set of stakeholders fairly may be good for suppliers. However, it may mean customers who want low prices having to pay slightly more for some products.