1.5 Stakeholders in business

• Stakeholders


  • Owners
  • Employees
  • Customers
  • Suppliers
  • Government
  • Local community
• Internal stakeholders


  Owners and people who work in the business
• External stakeholders


  'Outside' the business and include customers, suppliers, government and local community
• Owners


  • For a sole trader, there is one owner who would normally work in the business
  • In the case of limited companies, shareholders are the owners of the business
• Employees


  • Rely on work for their pay, which they will use to live on
  • Look upon work to provide them with some security for the future, and possibly a place to meet and work with other people
• Customers


  • Want to see a business continue in operation
  • May rely on a local corner shop for their daily needs
  • Some may be pleased if a large superstore opens in the area because it will give them a choice of shops and possibly lower prices
• Suppliers


  • Clearly want the business to continue and to grow
  • If a business fails, other businesses are often affected in some way
• Government


  Has an interest in all businesses succeeding because this means that more people are in work and paying taxes, as well as the business paying taxes
• Local community


  • Has an interest in business development
  • Successful business will bring general prosperity to a local community, which could help to reduce crime and contribute to local projects by donations and other support
• If a business is having difficulties and has to decrease in size, the reverse of the above will occur
• As a business grows, it may need more employees from the local community who will appreciate the fact that more people are employed</b>
• Suppliers will benefit from having increased orders from the expanding business, and the government will be happy to see more people employed who can pay taxes
• Customers will possibly have a greater range of products and services from an expanding business and will be able to buy those goods and services in more places
• The owners will have higher profits, which they will see as a reward for starting the business or in the case of shareholders, a reward for investing money in the business
• New businesses are not always welcome in an area
• Owners will usually, but not always, see profit as their main interest in running a business
• To achieve higher levels of profit they would want to see the business run as effectively as possible
• This may mean making workers redundant in order to save costs
• Profit could also be increased by growth in market share and so on
• Stakeholders


  Groups or individuals who have an interest in a business
• Stakeholder groups


  • Owners
  • Employees
  • Customers
  • Suppliers
  • Government
  • Local community
• Stakeholders


  • They can influence business activity
  • Business activity can influence stakeholders
  • Stakeholders may not always agree on the way a business should develop
• Internal stakeholders


  The business owners and people who work in the business
• External stakeholders


  The local community, suppliers, customers and government
• The government, as a stakeholder, can affect business activity in a number of different ways
• Ways the government can affect business activity

  • Changing taxation levels
  • Giving grants to businesses and organisations
  • Changing laws
  • Spending