Embedded Files
Learning Outcomes:
Students should be able to:
• define the term stakeholder;
• demonstrate knowledge and understanding of the following stakeholder groups and explain their interest in a business:
− owners and shareholders;
− managers and employees;
− competitors;
− suppliers;
− consumers;
− financial institutions;
− trade unions; and
− local community; and
• discuss how the aims of these stakeholders may be in conflict.
Class Learning Activity- Rally Robin
Read the article below on Homebase Omagh closing.
How might it affect you?
How might it affect your family?
What other people might it affect?
What other businesses might it affect?
Who might benefit from this?
How might it affect Omagh as a town?
What is a Stakeholder?
What is a Stakeholder?
A stakeholder is an individual, group or organisation that has an interest or concern in the activities and performance of an organisation.
Stakeholders can affect or be affected, either positively or negatively, by the organisation.
A typical business will have the following stakeholders.
Owners/shareholders
Managers/employees
Competitors
Suppliers
Consumers
Financial institutions
Trade unions
Local community
And often their interests can conflict with each other.
Owners/ Shareholders
Owners/ Shareholders
Owners
These are the people who have a financial interest in the success of the business. The will be focused on the business being a success as this is likely their livelihood. The success of the company will also have an effect on their reputation.
Shareholders
These are people that own part of a limited company. They have invested in the company by buying shares. The success of the company will increase the value of their shares and possibly return dividends payments. These often attend annual general meetings (AGM) and vote for the board of directors.
Conflict
The aims of the owners/shareholders may cause a source of conflict with...
Managers/employees/trade unions
Competitors
Suppliers
Consumers
Financial Institutions
Local Community
Managers/Employees
Managers/Employees
These are people employed by the business to perform a certain job as defined by their job description. They receive a wage/salary and expect to have good working conditions and often have a sense of job satisfaction. They typically want the business to do well as they can possible increase their salaries and have job security. The business will offer training and development to staff to help motivate their employees and often offer bonuses or perks such as gym membership, company funded social events and so on. Most employees will be keen for career progression which means getting promotions to jobs with more responsibility and therefore higher wages/salaries.
Conflict
The aims of the managers/staff may conflict with the aims of...
Owners/shareholders
Consumers
Local Community
Competitors
Competitors
These are the companies or services which are in competition with the business. They usually offer the same or similar goods or services. The success or failures of one business can have a significant impact with that of another. Competitors can offer different price, products, quality or services to try to increase their market share/sales and therefore profits. If a business wishes to grow it must pay close attention to the actions of their competitors and adapt their strategy accordingly.
Conflict
The aims of the competitors often conflict with the aims of...
Owners/Shareholders
Managers/employees/trade unions
Suppliers
Consumers
Suppliers
Suppliers
These are the people that provide goods or materials to a business allowing in to function. The business is a customer to it's supplier and therefore they have a vested interest in the success of the business as it will affect their financial stability. If a business is doing well it is more likely to pay promptly and continue regular orders. The prices charged between the supplier and the business may be negotiated to ensure a fair deal for all.
Conflict
The aims of the suppliers may conflict with the aims of the...
Owners/shareholders
Competitors
Financial Institutions
Consumers
Consumers
These are the customers of the business they consume the goods or services the buisness provides in exchange for money. Consumers want to get a competitive price and have a good range of products or services to choose from. The quality of the product is very important to consumers particularly if we want customers to return. Customers also expect a high level of customer service in exchange for their hard earned money.
Conflict
The aims of consumers conflicts with the aims of...
Owners/Sharehodlers
Managers/employees/trade unions
Competitors
Financial Institutions
Financial Institutions
These are business which provide financial services to businesses and include banks building societies and building societies. The business often needs loans of new equipment or premises and so they have to make regular repayments to the financial institutions. Financial institutions will want to see a company's accounts and a business plan before offering the loan to ensure it is financially viable.
Conflict
The aims of the financial institutions may conflict with the aims of...
Owners/shareholders
Managers/Employees
Competitors
Suppliers
Trade Unions
Trade Unions
Trade unions are an association of workers in a trade, group of trades, or profession, formed to protect and further their rights and interests. They aim to proect the rights of workers and ensure they get fair treatment and have good working conditions and job security. Another key aspect of their role is to negotiate a wage/salary increase at least in line with inflation. If they are not happy with the treatment of their workers they can ballot them to strike.
Conflict
The aims of the trade unions conflict with the aims of...
Owners/Shareholders
Consumers
Local Community
Local Community
Local Community
These are the people that live and work in the same community as the business. A business can bring many advantages to an area in the form jobs and increased trade to other businesses but it can bring disadvantages such as...
Noise
Traffic
Environemental Concerns
Movement of population
Businesses need to ensure they consider their corporate social responsibility as this will help in relations with the local community. Businesses are often actively involved in the local community and care for the environment in order to promote a positive image to the local community. Opening hours should be carefully considered especially in built up areas.
Conflict
The aims of the local community often conflict with...
Owners/Shareholders
Managers/employees
Consumers
Class Learning Activity:
What issues might cause conflict between different stakeholders within the business? In your group discuss how each stakeholder might get into conflict with other stakeholders.
What affect could conflict have on the business?
How might the business resolve conflict between the different stakeholders?
Conflict between stakeholders
Conflict between stakeholders
It is common for stakeholders to have different opinions on a business and how it should move forward. As a result of this there may be conflict or disagreements between stakeholders. Some of the main sources of conflict might be...
Wages/Salaries
Job creation/losses
Changing to working conditions
Profit distribution
New government legislation
Environmental threats
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