Meeting the Needs of Stakeholders BTEC Business

What are Stakeholders? Stakeholders are groups of people who have an interest in a business organisation They can be seen as being either external to the organisation, or internal But some may be both!

Types of Stakeholder I = Internal E = External Owners (I) Shareholders (I) Managers (I) Staff or employees (I) Customers (E) Suppliers (E) Community (E) Government (E) I = Internal E = External

Internal and External Stakeholders Internal stakeholders are those who are ‘members’ of the business organisation Owners and shareholders Managers Staff and employees External stakeholders are not part of the firm

But…..! Some groups can be both internal and external stakeholders Such as staff or shareholders who are also local residents Can you think of any others?

Characteristics of Stakeholders 1. Owners and Shareholders The number of owners and the roles they carry out differ according to the size of the firm In small businesses there may be only one owner (sole trader) or perhaps a small number of partners (partnership) In large firms there are often thousands of shareholders, who each own a small part of the business

Characteristics of Stakeholders 2. Managers: organise make decisions plan control are accountable to the owner(s)

Characteristics of Stakeholders 3. Employees or Staff: A business needs staff or employees to carry out its activities Employees agree to work a certain number of hours in return for a wage or salary Pay levels vary with skills, qualifications, age, location, types of work and industry and other factors

Characteristics of Stakeholders 4. Customers: Customers buy the goods or services produced by firms They may be individuals or other businesses Firms must understand and meet the needs of their customers, otherwise they will fail to make a profit or, indeed, survive

Characteristics of Stakeholders 5. Suppliers: Firms get the resources they need to produce goods and services from suppliers Businesses should have effective relationships with their suppliers in order to get quality resources at reasonable prices This is a two-way process, as suppliers depend on the firms they supply

Characteristics of Stakeholders 6. Community: Firms and the communities they exist in are also in a two-way relationship The local community may often provide many of the firm’s staff and customers The business often supplies goods and services vital to the local area But at times the community can feel aggrieved by some aspects of what a firm does

Characteristics of Stakeholders 7. Government: Economic policies affect firms’ costs (through taxation and interest rates) Legislation regulates what business can do in areas such as the environment and occupational safety and health Successful firms are good for governments as they create wealth and employment