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…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