This document discusses stakeholders in business organizations. It defines internal stakeholders as those within the organization, like shareholders, managers, and employees, and external stakeholders outside the organization, like government, customers, and community members. There can be conflicts between stakeholders when their interests do not align, such as between shareholders prioritizing profits and employees wanting higher pay. The document also introduces stakeholder mapping as a tool to analyze how close different stakeholder groups are to decision-making and their power to influence the organization. Managing stakeholders effectively is important for business success.

1. Business Organization and Environment(Unit one)
1-4 Stakeholders
Dr. Fereshteh Mohammadian

2. Internal & External stakeholder
Source: https://www.boundless.com/accounting/textbooks/boundless-accounting-textbook/introduction-to-accounting-1/overview-of-key-elements-of-the-business-19/business-stakeholders-internal-and-external-117-6595/

3. The interest of internal stakeholders
Internal stakeholders Their interests by focusing on
shareholders returns on their investments
The CEO or managing director coordinating the business strategy and
delivering profits and satisfy the
shareholders
Senior managers the strategic objectives
Middle managers the tactical objectives
Foremen and supervisors Organizing tactical objectives and
formulating operational objectives
Employees and their unions Protecting their rights and working
conditions

4. The interest of external stakeholders
External stakeholders Their interests by focusing on
Government (at all levels) How the business operates in the business
environment.
suppliers Maintaining a stable relationship
Customers and consumers The best product that meets their needs
People in the local community Impact of the business in the local area
financiers Returns on their investments
Pressure groups How the business has impact on their area of
concern
The media The impact of the business in terms of news

5. Conflict between stakeholders
Increasing of employees’ payment
• Shareholders…..believe that may cause decrease their profit & return of
their investments
• Employees….think that it could give them higher standard of living
• The CEO and senior managers….higher wages=happier employees but
lower profits
• Managers……raising payment, as extrinsic motivation, might undermine
their efforts to foster of intrinsic motivation
• The local community…..higher wages=spending more money in the local
community

6. Intrinsic & Extrinsic Motivation
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7. https://sendy82.wordpress.com/2009/07/10/

8. All stakeholders would like a successful business.
Successful business can sufficiently satisfy the interest of
stakeholders most of the time.
• For large businesses is more complicated than sole traders
(because of more internal stakeholders).

9. Satisfaction of internal stakeholders
For sole traders
Pay expenses+ provide profits+ be in compliance with gov. laws and regulations
In larger businesses: (reflection of stakeholders about raising the employees’ salaries)
20% reduction of workforce expenses productivity
Increasing of pressure on the retained workers + being unhappy to see retrenching of their co-
workers + sense of fear to lose their job too
to support the unemployed persons Governments expenses
many people move away from the town depression of real state markets
decrease of number of children Layoffs of teacher in schools
less customers purchases depression of local businesses

10. Stakeholder Analysis
Governmen
t
Pressure
groups
Local
community
Media
Employees
Consumers
Suppliers
Financiers
Owners
Managers
The comparative closeness of
stakeholders to decision
making
Decision makers try to
satisfy those stakeholder
closest to the center.

11. Stakeholder Mapping
Group C: keep satisfied
Pivotal group
Power to influence other groups,
Their self-esteem should be flattered
to make them feel important.
Group D: key factors
Manage closely
The most important stakeholders,
The business should communicate,
consult with them and focus on their
needs.
Group B: keep informed
Make them feel they are important
and belong to the business by
newsletters, events,
Group A: Minimal effort
Monitor
Rarely made problem for business
Limited energy & attention to satisfy
them
Low High
Level of interest
Low
High
Degreeofpower

12. IMPORTANCE OF STAKEHOLDERS IN
THE BUSINESS
Group A Group B Group C Group D
Least important to
the business
Most important to
the business