Stakeholders Flashcards
Business Stakeholders
A stakeholder is a person who holds a stake in a business.
In other words, a stakeholder is anyone who has an interest in what the business is doing.
Most businesses will have a number of different stakeholders and bigger businesses will often have many competing stakeholders.
Different Stakeholders
Owners – the people who own the business.
Managers – the people who run the business
Employees – the people who work for the business
Customers – the people who use the businesses service or product
Suppliers – the people who supply the goods or raw materials for the business to use.
The community – the people who live and work in the locality of the business.
Creditors – the people who have yet to be paid for goods or services supplied.
Stakeholder Objectives
Different stakeholders will have different interests in the business i.e. they want the business to do things which they want.
For example, the employees may want big pay rises and TV in the staff room, but the managers want more work to be done in the day!
So different stakeholders will have different objectives that need to be considered when decisions are taken.
Stakeholder Objectives 2
Owners –make profits and get dividends
Managers – high salaries and more power
Employees –secure jobs, promotion and good wages
Customers – value for money, good quality and low prices
Suppliers –make a profit, get return business and get paid.
The community – clean environment, jobs, no noise, no smelly trucks.
Creditors – want to get paid the money they are owed!!
Stakeholder groups needs
1) Shareholder :
- steady return on investment in form of dividends
- investment that does not loose value
- preferential treatment as customers - for example lower prices
2) Employees :
- steady and regular income
- safe working conditions
- job security
3) Customers :
- reliable supply of goods
- clear pricing policies
- safe products
- after-sales service and technical support
4) Suppliers :
- frequent and regular orders
- a sole supplier agreement
- fair prices
5) Creditors :
- repayment of money owed at agreed date
- profitable returns on investments
- minimal risk of failure to repay money owed
6) The local community :
- steady employment
- avoidance of pollution and noise
- provision of facilities for local communities
Stakeholders
So different stakeholders will be pushing for their own wishes and may not be very concerned with any other stakeholders wishes.
This can lead to conflict and arguments which a businesses owners and managers must manage.
Stakeholder Conflicts
Workers want more in wages, but this will increase costs and lower profits.
Shareholders / Owners want to lower wages to decrease costs and increase profits. This results in CONFLICT!!
Stakeholder needs in different circumstances
look at figure in classroom –> lesson 6 –> table
How do you please Stakeholders?
Well run businesses will be aware of who their stakeholders are and what they want from the business.
A good owner or manager will understand that not everyone wants the same thing and will do his or her best to take into account every bodies interests.
Give employees a pay rise BUT not as much as they wanted. Employees might not be really unhappy and owners will perhaps be happier that you did not give them what they wanted.
Plan to improve facilities for customers but do not do all stores at the same time – pleasing owners.
Communicating with Stakeholders
The key issue is whether ‘communication’ means a two way process of discussion or whether it’s simply a mix of propaganda and public relations. If such communication was open and honest :
- Wouldn’t innocent drinks tell you that it’s owned and controlled by Coca-Cola ?
- Wouldn’t Ben & Jerry’s tell you its owned and controlled by Unilever plc ?
