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…http://www.youtube.com/watch?v=09MlqDDQnSQ (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