1:7 Stakeholders Flashcards
What’s a stakeholder?
A stakeholder in a business are people who affect, or are affected by, actions in a business. They may be groups or people.
What interests do Owners and Shareholders have in the business?
Shareholders: Invest in form of shares and this makes them part owners. They don’t take part in management but can attend annual meetings and vote for the Board of Directors. Their rewards are profit and their risks are losing shares and profit.
Owners: They have the greatest interest in the progress of the business as they depend on the business for their livelihood, their reward is profit and their risks are anything negative.
What interests do Directors and Managers have in the business?
Directors: Consist of a managing director and a number of other directors - each look after a certain area, their reward is their salary. Their risk is unemployment.
Managers: Workers and supervisors report to them. Their reward is a salary, their employment depends on the success of the business.
What interest do Producers and Employees have in the business?
Employees: Rely on the business for their income - their reward is their salary.
Producers: If the business fails then they lose customers, e.g. farmers selling to groceries. Their reward is high sales, which means profit.
What interest do Lenders and Pressure Groups have in the business?
Lenders: They lend money to the business, if it succeeds they get their loans paid back.
Pressure Groups: E.g., Trade Unions, they represent the employees’ interests. If the business succeeds then their members get a salary. They may also exist in the form of Green peace; They want to protect the environment.
