The paper "Developing People in Procurement and Supply Chain " is an outstanding example of a management report. The global economy today is highly competitive and turbulent to the extent that it requires collaborative stakeholder relationships. These stakeholders include the community, customers, suppliers, owners and employees. In this regard, organizational managers have an obligation of administering contracts based on safeguards and other methods of conflict resolution while investing in asset-specific transactions (Donaldson & Preston, 2005). In a networked and knowledge-based economy, putting people ahead of profits is a ticket to corporate sustainability and profitability.
While stakeholder relationships are sources of competitive advantage, strong relationships allow firms to adjust to changing customer requirements, reduce costs, increase flexibility and stimulate innovation (Rawlins, 2006). Based on Arnstein’ s ladder of participation, Friedman and Miles (2006) developed a model to identify the style of managing stakeholders. This model identifies the style of stakeholder management as shown in figure 1 below. (Source: Arnstein, 1969) Figure 1: Ladder of citizen participation From the figure above, the lower levels or ‘ no power’ include informing, therapy and manipulation, and are organizational situations where stakeholders are informed of decisions already made (Arnstein, 1969).
The middle levels or ‘ degree of tokenism’ include negotiation, consultation and placation where stakeholders are not assured that their concerns will impact on the end result. However, they have the opportunity to air their concerns before the decisions are made. The highest levels or ‘ degrees of citizen power’ include stakeholder control, delegated power, partnership and involvement collaboration (Donaldson & Preston, 2005). This level is characterized by responsive or active attempts to empower stakeholders through corporate decision-making (Brink & Berndt, 2008).
Nonetheless, stakeholder groups at different times are treated at different levels because of uniqueness in stakeholder characteristics, differences in the stage and focus of the program, organization’ s life cycle stages and stakeholder strategies as shown in figure 2 below. (Source: Rawlins, 2006) Figure 2: Cycle of stakeholder relevance Building positive working relationships between suppliers and stakeholders require open communication, mutual respect, mindfulness and trust (Evans, 2010). To start with, open communication is central to good team dynamics, especially when everyone is communicating clearly. Common forms of group communication include shared documents, face-to-face meetings, emails and telephone (Trent, 2007).
For example, during meetings, groups can develop and agree on the specification for the procurement of works, services or goods. They can also assess procurement risks in detail and help to mitigate risks as they disseminate the specifications to potential suppliers. This will require that procurement officers and managers should build on honest and open communication. By understanding some difficult stakeholders who are against procurement, Svendsen (2013) observes that it is possible to discover that they may have experienced poor relationships in the past. Create ‘ clear the air session’ , listen, write down stakeholder comments and promise to correct after lessons learnt. Secondly, there is a need for mutual respect for people working in the supply chain by valuing their input and ideas.
Working together ensures that solutions developed are based on creativity, wisdom and collective insight (Blackler & Kennedy, 2013). Thirdly, mindfulness is about s means taking responsibility for one's actions and words. By being mindful, care and attention are given to suppliers and other stakeholders with regard to they say and do. Fourthly, every good relationship is founded on trust. Powerful bonds between the team and colleagues are made when people trust each other as well as communicating and working more effectively.
Trusting suppliers and other stakeholders with open and honest actions and thoughts save time and energy (Svendsen, 2013). However, managers in traditional companies spend less financial resources and scarce time to control a partner’ s behavior. Even attempts to resolve inevitable conflicts and remediate the problem cannot satisfy the contract terms.
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