LO5 Flashcards
what’s a stakeholder?
a person, group or organisation with a vested interest, or stake, in the decision making and activities of a business, organisation or project.
internal stakeholders
Groups or individuals within an organisation who have an interest in the business
examples of internal stakeholders
Employees - As their employer, the business success offers job security and potential progression
Managers - Same as employees, but management bonuses are often tied to business success
Owners/shareholders - They will be interested in their profits/dividends and capital growth of their shares.
external stakeholders
Groups or individuals outside an organisation who have an interest in the business
examples of external stakeholders
Customers -interested in product availability, prices, promotions
Suppliers - interested in credit terms, contracts and profit margins
Government - They want to make sure the business follows the law, pays taxes, etc.
Local community - Concerned with impact on local area, from more jobs to pollution and traffic increases
Pressure groups - interested in whether the business is acting appropriately towards their area of interest.
consequences of stakeholder conflict
Poor stakeholder engagement can have negative effects on a business.
When stakeholders feel they are not being consulted or communicated with adequately, it can result in them losing interest or becoming difficult to deal with.
This can result in a loss of support, and moral, and in turn a failure for the organisation to achieve goals.
If a business fails to engage, successfully, with a stakeholder, what could occur?
loss of customers
Difficulty entering new markets/expanding
reduced revenue/profit/make a loss
weaker cash flow position
fewer potential investors
poor reputation/bad publicity
fall in customer satisfaction
protests/boycotts
de-motivated employees
loss of competitive advantage
