1

Stakeholders

2

Stakeholders

Stakeholders: People/groups with an interest in the success of a business

Stakeholders may be either internal or external to the organisation.

On certain issues, stakeholders may share common concerns, while on others they may not

*

3

Stakeholders include…

Employees

Shareholders

ManagersSuppliers

Customers

Local Community

Government

Pressure Groups

4

Shareholders

Invest money into the business

Want to make money from the business Interested in the company making a profit Want a good dividend Want their shares to increase in price The firm to achieve a positive corporate image and long-term growth in order to create favourable conditions that will encourage share prices to rise.

5

Managersare stakeholders

They want the company to succeed

Better chance of promotion Successful company may reward them by

paying them higher salaries Giving them a bonus Better fringe benefits If company fails they could lose their job

6

Employeesare stakeholders

Want the company to succeed More likely to get better pay Chance of promotion Better facilities

A failing company will Threaten their jobs Freeze their pay Possibly cut their wages

7

Customersare stakeholders

Customers have a stake in any business which they buy goods and services from

They want low prices Best quality available Good service Innovative products

8

Suppliersare stakeholders

Want the company to succeed More orders for them More success for their business

Failing company Falling orders for them Less profit Job losses

9

Business has an impact on the local community

In the close vicinity of a business Creates jobs for people living locally The local area will suffer if a business fails

and is a large employer Business might buy from local suppliers Provide a service to local people or

businesses It could pollute the local environment

10

The Government is a stakeholder

When a business succeeds Business pays taxes – the more profit the

business makes the more taxes it pays Provides employment and training

If a business fails Workers are made unemployed Government will have to pay them

unemployment benefit

11

Stakeholders

Stakeholder objectives

12

Stakeholder objectivesexamples

Customers: value for money, good service, quality

Owners/shareholders: maximising return on investment

Managers: status, performance bonuses Employees: high wages, conditions of work Suppliers: to sell a lot at a high price, repeat

orders, customer loyalty Pressure groups: to force a reduction of

environmental impact

*

13

Stakeholders

Stakeholder conflict

14

Stakeholder conflict

Owner v customer: Profit v service e.g. conflict over opening hours

Shareholder v worker: Profits v high wages Owner v management: “Divorce between

ownership (profits) and control” i.e. The owners have little power over managers

Employer v employee Employees see their hard work reflected in higher

profits for the employer Employers look for greater efficiency – more

output for lower costs

*

Internal and External Stakeholders

Internal stakeholders are those who are ‘members’ of the business organisation, external stakeholders are not.

Can you categorise the stakeholders into the relevant group?

15

BUT!

Some groups can be both internal and external stakeholders

Such as staff or shareholders who are also local residents

Can you think of any others?

16