1.4 Stakeholders

Stakeholder

An individual, group or organization which has direct interest in and/or gets affected by the performance or activities of a business. They can be categorized into two: internal stakeholders, external stakeholders.

Internal Stakeholders

Members of the business with direct interest in/gets affected by the business performance

Employees, manager & directors, shareholders

Why Employees

Pay and other financial benefits, working conditions, job security, opportunities for career progression

Why Managers and directors

Profit maximization, job security, financial benefits, long-term financial health of the company

Why Shareholders

Maximize dividends, achieve capital gain in the value of the shares

External stakeholders

Outsiders who also have direct interest in and are affected by the business performance and activties.

Customers, Suppliers, Pressure groups, Competitor, Government

Why Customer

Quality of goods and services, value for money

Why Supplier

Clients who pay their bills on time (), regular contracts with clients, good working relationships with clients

Why Financiers

Ability of a business to repay debts from generating sufficient profits, establishing long-term relationships with firms in order to achieve subsequent earnings

Why Pressure Group

Influence a change in business behavior according to their interested purpose

Why Competitors

innovation that arises from rivalry, responding to competitive threats, performance benchmarking

Stakeholder conflict

Stakeholder conflict refers to the inability of an organization to meet all of its stakeholder objectives simultaneously.

Arbitration

To resolve industrial disputes between workers and managers

Workforce participation

To improve communication, decision-making and reducing potential conflicts between employees and managers

Profit-sharing scheme

Reducing conflict between workers and shareholders over allocation of profits and benefits

Share-ownership scheme

To reduce conflict between workers, manager and shareholders