Stakeholders Flashcards
What’s a stakeholder
A person/party with an interest in the success of the business
What’s an internal stakeholder
Found within the business
Owners
Employees
Managers
What’s an external stakeholder
Found outside the business
Suppliers
Lenders
Customers
Local communities
Why is having stakeholders important
To help analyse the operation of a business
Setting business objectives
Strategy is comes up with to reach the objectives
2 way relationship as the business affects the stakeholders and the stakeholders affect the business
Who benefits from stakeholders?
All will benefit from a business’ success in theory but sometimes that’s not the reality of it
Even if they do all benefit they may not benefit equally
All affect each other with different actions that take place etc
The owner as a stakeholder
Can be single owner (sole trader) several (partnership or thousands of shareholders as a plc
After the best possible return on the money they invested into the business
Wanting to see the business grow = returns increase
On a time scale with short/tactical/long/strategic objectives to make sure they ensure that profit
Employees as a stakeholder
Employee action dependent on the business
High wage, bonus, job security, holiday play, sick pay
Customers
Want the best quality products and the lowest possible price
Product innovation so this years products are better than last years products
Good customer service
Paying in credit (months not all in one go) options
Stop buying from the business is it fails to meet what they want
Pressure groups formed to try influence the business generating bad publicity
Suppliers as a stakeholder
Suppliers losing an income if the business stops trading
Looking for its customers (businesses) to keep being successful so they have a profit
Looking for businesses to grow so that they can increase their sales to them
Look for repeat orders over “one offs”
Businesses building up a long term relationship with their suppliers - using them regularly, paying on time
=suppliers loyal and committed
Long term commitment with suppliers vs. Driving costs down for customers for a short period of time (delayed paying back time for suppliers, not being loyal to one supplier)
The government
Has an interest in the success of the business
More employed, less people paying of social security benefits, more tax revenue from employees and the business = active economy
Larger business expansion, more exporting, UK’s trading position improving
The local community as a stakeholder
New jobs
Greater spending power (decide from the competition)
Can improve quality of life =road improvements with more businesses about (external benefits)
Higher property prices Higher crime rates Congestion and pollution ie. building sites, factories, more people living there etc Noise pollution Bad smells Bad area to live = property price fall
Businesses getting actively Involved in community projects (sponsoring a sports team)
Not a cost to the firm but will be paid/imposes upon by the local community
