STAKEHOLDER INTERESTS
Definition of Stakeholder.. A person or group that has an investment, share, or interest in something, as a business or industry
Have a think… In small groups: Develop your own definition of a stakeholder Develop a list of the stakeholders related to your school. Eg You are a stakeholder in your own education Think of a business – who are the stakeholders in the business and why?
YouTube Clip… What is a stakeholder in a business… (skip section 3.26 – 5.02)
Stakeholder interests…. Groups in society (stakeholders) have an interest in the performance and activities of businesses because it has an impact on them Stakeholders’ interests can be financial – but can also involve issues such as the safety of a product Stakeholders of a company can be found in the: Internal environment: direct control – staff, organisational structure, policies External environment: indirect control – customers, suppliers, competitors
Main stakeholders… Owners/Shareholders: A business is the property of its owner/s Owners receive profits generated by the business therefore have a significant stake in the businesses performance Owners in large companies are usually shareholders: who have a direct financial investment/interest in the company Stake: The amount someone has invested in a business
Managers: Employed to direct the business on behalf of the owners Managers do not usually receive a share of the business profits – they are instead paid a salary
Investors/lenders Business owners may raise funds through external investors (individuals, banks) Companies may ask for additional investments from their shareholders Therefore investors have a stake in the businesses performance as if the business does not make profits – their investment money will be lost
Employees Staff have a stake in organisational performance – including the businesses profitability Job security depends on profitability of the business
Suppliers Businesses buy inputs from other businesses. Inputs could include things such as Raw materials Energy Plastic Factory Machinery Equipment Suppliers have a financial stake in an ongoing flow of orders and reliable payment from the buyer - if a business is not making profits – it will slow down its orders to the suppliers
Customers The goods and services produced by businesses are brought and used by customers (clients for services) Profits are made from customers buying the businesses product/service Profits come from customers wanting a product that much that they will spend money on it
Government Governments recognise that the country’s standard of living is closely tired to business performance Successful businesses provide jobs and generate wealth Standard of living: Refers to individuals having the financial resources to acquire goods and services available in the market
Local Community Many communities have a substantial stake in business performance in their local area Large communities provide employment and training Supple goods and services that might otherwise be difficult to obtain Part of a community life –sponsorship of sporting teams
International community International community is increasingly seen as a stakeholder in business activities and the social responsibility of large organisations