Leeds Business School

Stakeholders for Productivity Getting in the Right Orbit

There are plethora of potential stakeholders who are attempting to engage SME’s in helping them improve their productivity.

A stakeholder is this context is defined as a person, group or organization that has interest, concern and or power over a particular business. However, there is a gap in understanding how SMEs that have potentially most to gain from a productivity perspective, view potential engagement with what we term productivity improvement stakeholders.

Researchers at Leeds Business School recently undertook a small-scale research project to understand how SME’s view and engage with potential productivity improvement stakeholders. The approach asked SME directors and owners to discuss stakeholders that affect the productivity of their business.

map of key stakeholders

Figure 1 shows the mapping of the stakeholders based on their relationship to the SME.

SME owners or directors often expressed difficulty in grasping the notion of a stakeholder, particularly those outside their own business, which provided a timely reminder of the challenges of operationalising concepts in the academic world with the world of the small business.

Four broad subgroups are identified and represented as quadrants on the map: Education, Finance, Agency and Commercial. Some of these labels deserve a little elaboration: For example, ‘Technology peddlers’ was a term coined by the group to label businesses who promised SME’s improved productivity from the purchase of systems or machinery. Secondly, ‘infrastructure architects’, a broader term than the others used by the group to define planners, transport providers, house builders etc.

Of the stakeholders that were identified, one key feature which was significant was the ‘closeness’ of the stakeholders to the business, in relation to more remote stakeholders, such as the government. ‘Closeness’ in this sense is typified by the strength, frequency and immediacy of the relationship between the business and the stakeholder. These ‘close others’ have a significant potential through the nature of the relationship and the level of trust to influence potential productivity developments. A further key finding was that these stakeholders have ‘entangled agency’ that is to say, they have overlapping both commercial and professional network relationships, with each other and the SMEs; competitors, suppliers, customers and investors. The majority of the SME representatives suggested relatively weak ties with many of the more remote agencies seeking to encourage productivity improvements.

The research also identified constraining and complexity factors associated with productivity improvement: the lack of meaningful information regarding the measurement of the current and future productivity states, coupled with environmental uncertainty on the future market state, resulting in an unclear return of investment information.  There is a therefore potential for these different ‘close other’ stakeholders to increase their collaboration in order to create a more coherent case for investment in terms of individual productivity improvement opportunities.

However, this approach creates challenges for policy makers to firstly identify the close stakeholders and find policy levers to encourage, or co-ordinate, existing or desired relationships around each SME – a challenge which is amplified by the sheer volume of SME’s in the regional economy.

Dr Oliver Jones

Principal Lecturer / Leeds Business School

Dr Ollie Jones joined Leeds Business School in 2004 and is a Principal Lecturer in Operations, Enterprise and Supply Chain Management. Ollie graduated in Manufacturing and Business from Cambridge University before working in a large multinational co-operation in a variety of sectors progressing from a graduate to senior management roles. He has been appointed a Teacher Fellow, in recognition of teaching excellence, and continues to works extensively with a different businesses in consultancy, particularly around productivity development, and is currently the research lead for his subject group.

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