We shall now analyze the stakeholder table to identify the most important stakeholders based on power, leadership, interest, knowledge and ability to form alliance. We shall analyze each stakeholder one by one for a better analysis.
Electrocorp’s managers have the most knowledge about proposal to outsource the production. They can also find like-minded supporters in board of directors and shareholders. They have the ultimate power to make the decision and take the leadership in implementing this change. They also have high interest and motivation to see this policy go through since outsourcing would increase profits and hence their bonuses.
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They may have some knowledge about the proposal to outsource having heard about t through the grapevine. They are against this change and can put pressure on the management with the help of labor unions, local politicians and the general public of the city. However, they do not have any real power, even though the change would affect them the most as they will lose their jobs.
Labor Unions oppose the change as a number of workers are set to lose their jobs. Although they have no knowledge about the proposal, they have some power because of their ability to form alliance with the local politicians and the community.
Shareholders are unlikely to have heard about the proposed change since this is still an internal matter. Hence they have no or very limited knowledge about the proposal. They also have very limited power and resources and no leadership. However, they have substantial interest in the proposal since outsourcing would increase profits and hence the share prices.
Board of Directors
Board of directors is likely to have some knowledge about the proposed change. However, it is unlikely that the directors have detailed knowledge of the proposal and the research done on it so far. The improved profits make the proposal extremely attractive to the directors. They also have the power to make the decision to give the go ahead to the policy.
Customers probably have no or very little knowledge about the proposal. However, they will be benefited if the proposal is implemented since it will result in cost reduction of the automotive parts which will help customers bring down the cost of their product. As such, the proposal is of high interest to them and informing them about it could help Electrocorp garner some support in favor of the policy, if needed. Since automobile industry has a lot of political support, they can also exercise this power for the benefit of Electrocorp. In fact, Electrocorp’s customer can help reduce the political pressure put by local politicians who are more interested in the local economy.
Electrocorp’s supplier’s are most likely situated locally. Outsourcing the firm’s production facility could make it expensive to import raw material from the US and Electrocorp may decide source this material locally, thus hurting the supplier interest. They may have heard about the proposal and could already be planning to counter this problem. However, they have little power to influence Electrocorp’s policy decisions.
The community is unlikely to have any knowledge about the proposal and once the proposal is made public, there will be widespread opposition since the city’s economy is heavily dependent on Electrocorp. A point over which the issue can be negotiated is the fact that shutting down of factories will result in removal of carcinogenic material from the vicinity of the city, thus making it safer for the city’s children. However, the adverse effects of outsourcing are far greater and immediate and it will be difficult to convince the city to support the proposal.
Local politicians have little or no knowledge about the program but the fact the thousands of workers will be laid off, makes it a politically hot issue and local politicians may use their power to put pressure on Electrocorp to abandon the project.
The US government has little interest in what goes on Electrocorp. However, if too many jobs get outsourced, the government may make policies to limit such outsourcing to prevent loss of revenue to exchequer. In this regard the government has very high power. However, it is unlikely that the government will interfere.
Government of Foreign Country
The government of the country where the production is outsourced will benefit from all the new jobs. Hence the country will have a very high interest in Electrocorp starting operations within its borders and may give subsidies to help make the transition easy.
Citizens of City Relocating
Any city to which Electrocorp relocates to will benefit from jobs that its citizens will get. However, there are also environmental problems to consider. The relaxed environmental standards of other countries would expose the citizens to carcinogens. Still any the city would have high interest in seeing Electrocorp open production center. But they do not have any resources or power to influence such a decision.
The environment ministry would be happy to see a polluting production facility leave the American shores. Although they do not have any power or resources to influence the decision, it would be a welcome one for them and managers could attempt to form an alliance with them
Environmental Non-Profit Groups
Their interest in Electrocorp relocating is the same as that of Environment ministry.
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