Good morning class! Today, we are going to talk about business stakeholders. Now, a stakeholder is anyone who has an interest in a business or is affected by what it does. They can influence the business, be affected by its decisions, or support its operations. Understanding stakeholders is key for any business to survive and succeed.
Let’s start with the types of stakeholders. We have internal stakeholders and external stakeholders.
Internal stakeholders are inside the business. They include owners or shareholders, who invest money in the business and expect profits. For example, if you start a small bakery, you are the owner, and your goal is to earn money from your business. Then we have managers, who make strategic and day-to-day decisions. They might aim to meet targets to get bonuses or promotions. Finally, employees are the staff working for the business. They care about fair pay, good working conditions, and opportunities to learn and grow.
External stakeholders are outside the business but still affected by it. Customers want good products at fair prices. If you run a restaurant, happy customers will keep coming back. Suppliers provide materials or services, like a milk supplier for a bakery. They care about timely payments and consistent orders. Governments want businesses to pay taxes and follow laws. Local communities care about job creation, environmental impact, and ethical practices. Creditors and bankers want to know the business can repay loans. Lastly, pressure groups and media influence public opinion and ethical behaviour.
Each stakeholder has roles, rights, and responsibilities. Owners have the right to profits but must take financial risks. Managers have the right to make decisions but must ensure resources are used efficiently. Employees have the right to fair pay and safe working conditions, but they must perform their jobs well. Customers have the right to good products, but they must pay fairly. Suppliers must deliver quality goods and get paid on time. Governments enforce rules, collect taxes, and provide a stable environment. Communities expect responsible behaviour, and creditors lend money under agreed terms.
One challenge businesses face is balancing stakeholder interests. For example, shareholders may want to cut costs to increase profits, while employees want higher wages. Or opening a new factory might benefit shareholders and customers but worry the local community about pollution. Businesses need good communication, negotiation, and ethical decision-making to manage these conflicts and maintain trust.
