stakeholders in a business Flashcards
what is a stakeholder?
A stakeholder is anyone with an interest in a business. Stakeholders are individuals, groups or organisations that are affected by the activity of the business.
different types of stakeholders
Owners who are interested in how much profit the business makes.
Managers who are concerned about their salary.
Workers who want to earn high wages and keep their jobs.
Customers who want the business to produce quality products at reasonable prices.
Suppliers who want the business to continue to buy their products.
Lenders who want to be repaid on time and in full.
The community which has a stake in the business. Business activity also affects the local environment.
internal and external stakeholders
Internal stakeholders are groups within a business - eg owners and workers. External stakeholders are groups outside a business - eg the community.
what is business growth?
As a business grows it gains two major advantages over its smaller rivals. Large firms have more influence over market price. They’re big enough to be price setters.
organic growth
a situation where a business increases its size through investing in its existing product range, or by developing new products. This will normally be financed through the use of retained profits (from previous trading years), bank loans or, if the business is a PLC, through the issue of shares. This is a slower and safer method of expansion than external growth.
external growth
When a company increases its sales and profits by buying other companies, rather than from its own operations
