Lecture2 Stakeholders

8/2/2019 Lecture2 Stakeholders

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What are Stakeholders?y Stakeholders are groups of people who have an interest

in a business organisation

y They can be seen as being either external to theorganisation,or internal

y But some may be both!


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Types of Stakeholdery Owners (I)

y Shareholders (I)

yManagers (I)

y Staff or employees (I)

y Customers (E)

y Suppliers (E)

y Community (E)y Government (E)

y I = Internal

y E = External


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Internal and External

Stakeholders

Internal stakeholders are those who are

members of the business organisation

yOwners and shareholders

y Managers

y Staff and employees

y External stakeholders are not partof the firm


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But..!y Some groups can be both internal and external

stakeholders

y Such as staff or shareholderswho are also local residents

y Can you think of any others?


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Characteristics of Stakeholders

1.Owners and Shareholders

y The number of owners and the roles they carry out differaccording to the size of the firm

y In small businesses there may be only one owner (soletrader) or perhaps a small number of partners(partnership)

y In large firms there are often thousandsof shareholders, who each own a small partof the business


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2. Managers:

y organise

y make decisions

y plan

y controly are accountable to the owner(s)


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3. Employees or Staff:

y Abusiness needs staff or employeesto carry out its activities

y Employees agree to work a certain numberof hours in return for a wage or salary

y Pay levels vary with skills, qualifications, age, location,types of work and industryand other factors


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4. Customers:

y Customers buy the goods or services produced by firmsy They may be individuals or other businesses

y Firms must understand and meet the needsof their customers, otherwise they will fail

to make a profit or, indeed, survive


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5. Suppliers:

y Firms get the resources they need to produce goods andservices from suppliers

y Businesses should have effective relationships with theirsuppliers in order to get quality resources at reasonable

pricesy This is a two-way process, as suppliers depend on the firms

they supply


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6. Community:

yFirms and the communities they exist inare also in a two-way relationship

y The local community may often provide many of the firmsstaff and customers

y The business often supplies goods

and services vital to the local areay But at times the community can feel aggrieved by some

aspects of what a firm does

Characteristics of

Stakeholders


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7. Government:

y Economic policies affect firms costs (through taxationand interest rates)

y Legislation regulates what business can doin areas such as the environment

and occupational safety and healthy Successful firms are good for governments

as they create wealth and employment

Characteristics of

Stakeholders

Documents

Lecture2 Stakeholders