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
* 2
3. Managers
Suppliers
Shareholders
Employees
Stakeholders include…
Customers
Local
Community Pressure Groups
Government
3
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.
4
5. Managers
are 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
5
6. Employees
are 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
6
7. Customers
are 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
7
8. Suppliers
are 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
8
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
9
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
10
12. Stakeholder objectives
examples
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
* 12
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
* 14
15. Internal and External
Stakeholders
Internalstakeholders are those who are
„members‟ of the business organisation,
external stakeholders are not.
Can you categorise the stakeholders
into the relevant group?
15
16. 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
