STAKEHOLDERS - people who can be affected by and therefore have interest or stake in the business

Internal Stakeholders

• members of the organization

Interests

• Employees

  • job security

  • wage levels

  • work environment

• Managers

  • job security

  • salary and benefits

• Shareholders

  • annual dividends

  • share price

  • security of investment

External Stakeholders

• do not form part of the business but have a direct interest or involvement in the organization

Interests

• Suppliers

  • regular contracts

  • competitive prices

• Customers

  • value of money

  • product quality

  • quality of service

• Pressure Groups

  • enforce demands on organizations to act in a particular way

  • create jobs

  • don’t harm environment

  • ethical with employees

• Government

  • job creation

  • tax payments

  • impact of business on society & economy

• Competitors

  • fairness of prices

  • strategic plan of business

  • remain competitive

  • bench work performance

Stakeholder Conflict

• It isn’t possible to satisfy all stakeholders at the same time

• Conflicts always arise between different stakeholder interests

  • Shareholders want more profit by cutting employee benefits

  • Suppliers expect full payment, but business wants discount in exchange

  • Shareholders and employees argue that top managers are overpaid, but managers believe their job involves risky decision-making and the salaries are justified

Mutual Benefits of Stakeholder’s Interests

• There are mutual benefits of simultaneously satisfying different stakeholders.

• Addressing employee and manager needs leads to highly motivated staff, boosting productivity, and reducing absenteeism.

• This can improve corporate image, market share, and profits.

• Stakeholders are pleased and the greater output satisfies the government and pressure groups.