1.4 Stakeholders Flashcards
Stakeholders
People or groups who have an interest in the actions and success of an organization
Internal Stakeholders
People/ groups who are directly involved in the running of the business (employees, managers, shareholders)
External Stakeholders
People/ groups who are indirectly involved in the running of the business and are affected by its actions (customers, suppliers, government, banks/ creditors, pressure groups, competitors)
Employee’s interests
Employment security
Similar wages + benefits to other jobs
Health + safety conditions
Some decision making participation
Manager’s interests
Employment security
Similar salaries + benefits to other jobs
Profit maximization (please shareholders)
Shareholder’s interests
Similar annual dividends to other businesses
Share prices rising over time
Security of investment
Ability to sell shares when required
Customer’s interests
Value for money
Product quality + safety
Service quality
Long term rewards for loyalty
Supplier’s interests
Speed of payment
Level + regularity of orders
Fairness of treatment (not being exploited)
Government’s interests
Creation of jobs + income to boost the economy
Taxes paid
Value of output produced (GDP)
Impact on society (sustainability of production on environment)
Banks/ creditors’ interests
Security of loans + businesses ability to repay them
Prompt payment of interest
Pressure group’s interests
Campaigning to achieve a change in business decisions/ activities
Competitor’s interests
Fairness of competitive practices
Strategic plans of the business (even though the business are not entitled to share that)
Mutual benefit among stakeholders
Making a profit allows for:
Dividend payments to shareholders
Business expansion (more jobs for local community)
Payment of taxes to government
Increased wages for employees
Common stakeholder conflicts
Shareholders want higher profits, employees want higher wages
Customers want cheaper products, cheap products means suppliers aren’t paid fairly
Management want maximum productivity, employees want less work
Pressure groups wants CSR policies, shareholders think it is too expensive to implement
