Stakeholder
A stakeholder is someone who could affect or tends to be influenced by the activities of a business organization. A stakeholder could be an individual, an organization, a group of people or any other such entity.
Internal Stakeholders
- Shareholders, Investors (such as banks & financial institutions)
- Managers
- Employees
- Contract staff
External Stakeholders
- Suppliers
- Creditors (people who we owe money to)
- Customers
- The government and local authorities general community / Cause / Pressure groups
Shareholders
These are the people who have invested in the equity (seed) capital of the business. They are considered to be the owners of the business entity and hence take a great risk on their investment. It is natural that they also expect high returns. Their expectations include : capital gains and returns on investment in the form of dividends.
Their expectations include:
- Capital gains on sale of shares
- Adequate returns on investment in the form of dividends
- Security of their investment (confidence that their investment is safe)
- The right to participate in annual general meetings
- Their comments to be heard and considered by the BOD
Financial Institutions
These are organizations such as banks and debt providers who have provided loans to the firm.
Their expectations include:
- Timely payment of interest and capital repayment
- Security for their investment
Managers
These are the top most individuals in a firm. Comprising of the BOD, the MD and the senior managers they would tend to be one group which would be greatly affected by the affairs of a business. Similarly they are capable of exerting a significant influence on all business activates.
Their expectations include :
- An industrially competitive remuneration package
- Promotional prospects
- Job security
- Adequate training and personality development
- A suitable and stress free work environment
- Adequate authority to perform their job functions
Employees
These are the ordinary workers, office staff and other full time employees of the organization. The group as a whole is considered as the workforce of an organization and they tend to exept their influence through trade unions and other employee groups.
Their expectations include:
- Reasonable wages
- Promotional prospects
- Job security
- Safe and secure work environment
- Adequate training
- Jobs free from discrimination
Contract Staff
This group of individuals are similar to employees, however they have limited ability to influence business decisions as they work on a contract basis. Contracts usually require renewal and could be cancelled at short notice. They are likely to have lesser statutory entitlements than employees. However recent regulations in the EU devotes greater attention to the needs of such staff .
Suppliers
These are the providers of. raw materials and other support good and services to an organization.
Their expectations include:
- Adequate orders
- Timely settlement of debts
- Steady rise in orders
- Reasonable requests that could be compiled with
- Reasonable prices for their products and services
Creditors
These are individuals and organizations who are owed money by the organization.
Their expectations include:
- Timely settlement of debts.
- Adequate interest if delayed.
Customers
These are the individuals or organizations who purchase the products of the business.
Their expectations include:
- Quality products
- Reasonable prices
- Good after sales service
- Availability and range to choose from
Government and Local Authorities
The government takes an interest in business organizations due to several reasons.
These include:
- Taxation (a source of revenue for the government)
- When planning subsidies and assistance schemes
- Checking compliance with legal and state policies
- Assessing corporate ethical behavior
General Community
The general community would be concerned with the impact a business organization has on it's surrounding environment. For instance they maybe concerned about pollution, noise, disturbance, etc while at the same time show positive responses towards the creation of job opportunities and assistance to regional entities such as schools.
Cause / Pressure Groups
Focus on a particular issue and attempt to influence business activities in this respect.
Examples:
- Animalwelfare
- Employment
- Anti smoking pressure groups
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