Stakeholders

What is a stakeholder?

• A stakeholder is anybody who can affect or is affected by an organization, strategy or project.

• They can be internal or external and they can be at senior or junior levels.

• Some definitions suggest that stakeholders are those who have the power to impact an organization or project in some way. 

Definition

• People or small groups with the power to respond to, negotiate with, and change the strategic future of the organization'

(Eden and Ackermann 1998: 117).

Role of Stockholders• Stockholders’ initial role is to provide the capital a

company needs to grow and expand, or in the case of a startup venture, the capital it needs to launch its products or services into the marketplace.

• In private companies, stockholders may take an active role in setting the strategic direction for the venture.

• They sometimes provide guidance or advice to

the company’s management.

• In public companies, stockholders can attend an annual meeting and ask questions of the company’s top management, including the CEO, about the decisions they have made and the direction the company is going.

Employees

• Top management may set the overall strategic direction for the company, but the employees are responsible for carrying out the tasks in an efficient manner.

• Employees are the closest to the action.

• They interact with customers on a daily basis.

• In a manufacturing environment, they work directly on the company’s products.

• The company’s success depends in large measure on the skill and dedication of its employees.

• Without the employees performing their roles proficiently, the company will not reach its potential.

Manager • Determine an appropriate schedule for

regular performance.• Deliver regular 

positive and constructive feedback to manager as well the workers.

• Check-in on goal progress & Communicate and revisit performance expectations.

• Improve your management and leadership skills.

• Acquaint yourself with the different management needs of the different generations.

• Coach your employees in a way that strengthens two-way communication and reinforces desired behaviors.

• Support your employees' professional and career development while making them accountable for it.

• Submit your completed employee reviews by the designated deadline.

Owner

• The most important stakeholders.• They decide what happens to the

business. They're the ones who make a profit if the business is successful.

• In a sole trader or a partnership, they are the owners.

• In a limited company, they are the shareholders.

Supplier

• A company’s ability to fill its customer orders on time -- and bring the highest quality goods to the marketplace -- depends in part on the role its vendors or suppliers play.

• The company relies upon raw materials or components being available when they are needed and at reasonable prices.

• If the supply of one key item is interrupted, it can cause a disruption in the company’s entire manufacturing schedule.

Society

• The Society provides the skilled workforce that a company depends upon to maintain its competitive edge.

• Members of the community, including the news media, often play a watchdog role, ensuring that the company is a good citizen with fair business practices, concern for the environment, and a willingness to contribute to charitable and social causes.

Government

•Taxation, •VAT, •legislation, •employment, •truthful reporting, •diversity, •legalities,

The government collects taxes from the company, so it benefits from the company’s profits. It may invest taxes back in society.

Creditors

* These individuals have loaned their money to the company either as cash or by supplying raw materials for production.

* The company pays creditors interest on their loans, irrespective of whether the company makes profits.

* Creditors often hold the company's assets for security.

* If the company defaults on the repayments, these creditors have a legal right to claim the assets.

* Creditors face a risk of losing their investments if the company files for bankruptcy.

Shareholders• A company belongs to its

shareholders, who have spent money and bought the shares of the company.

• There is a direct relationship between their investments and the financial stability of the company.

• The better the company's position, the more money they are paid.

• There are two types of shares: preference shares and equity shares.

• Both classes of shares are paid after the company has met its obligations such as paying creditors and providing for taxes, depreciation and amortization.

• Preference shareholders are paid a fixed rate of dividend before equity shareholders.

• Equity shareholders get to share the surplus profits.

Customers

• A company's customers also are affected by business conditions.

• When the company is not doing well, its concentration on its customers diminishes.

• The company produces substandard products and does not research into what the customers want.

• When the conditions are good, the company wishes to make greater profits and provides utmost attention to its customers, trying to match the customer requirements in every way possible.