1.4_Stakeholders_2023_new_syllabus (2)

1.4 Stakeholders

Definition of Stakeholders

• Stakeholders are any individual or group of individuals that may affect or be affected by an organization's actions.

Types of Stakeholders

Internal Stakeholders

• Define: Individuals or groups that work within the business.

  • Key Groups of Internal Stakeholders:

    1. Employees - Individuals working at various levels within the organization.

    2. Managers - Individuals responsible for overseeing operations and making strategic decisions.

    3. Shareholders - Individuals or entities that own shares in the company and have a financial interest in its performance.

External Stakeholders

• Define: Individuals or groups that are outside the business but have an interest in its activities.

  • Key Groups of External Stakeholders:

    1. Customers - Individuals who purchase goods or services from the business.

    2. Pressure Groups - Organized groups that seek to influence a business’s policies and practices.

    3. Government - Agencies and officials that regulate industry practices and can impact the business through legislation.

    4. Local Communities - Residents in the areas surrounding the business who can be affected by its operations.

    5. Debtors - Individuals or entities that owe money to the business.

    6. Suppliers/Creditors - Entities that provide goods or services to the business, often on credit terms.

    7. Competitors - Other businesses that offer similar products or services to the same market.

    8. Labour/Trade Unions - Organizations that represent the workforce and advocate for employee rights.

Conflict Between Stakeholders

• Define: Conflict arises from the mutually exclusive and incompatible interests of different stakeholder groups. This can manifest in various forms, including strikes and other forms of collective action.

Stakeholders Mapping

• A strategic tool to categorize stakeholders based on their power and interest in the organization:

  • High Power, Low Interest - Keep satisfied.

  • High Power, High Interest - Key players.

  • Low Interest, Low Power - Minimal effort.

  • High Interest, Low Power - Keep informed.