Topic 2: The influence of stakeholders

Stakeholders with a direct interest in the business are called internal stakeholders and include owners and employees. In a small business, the owners will be a single person (sole trader, or a small group or people (partnerships, co-operatives,private limited companies)

Shareholders are a special group of owners. Each has a share of the business. In private limited companies, shareholders are limited to family and friends.

Owners would like success and profit.They can influence a business by investing. Owners make key decisions about the business, such as what to sell, what markets operate in and whether to expand.

Employees would like decent working conditions and fair pay. Emplyees can influence the business through working hard and being skilled and motivated, or by failing in these.

Managers are the employees who help run the business. Thier influence extends to taking day-to-day decisions in the business.

External stakeholders have a less direct stake in a business. They include customers, suppliers, banks, communities, government and pressure groups.

Customers want quality and reliability. They influence the business by buying or not. Suppliers influence the business through quality and reliability of supply.

Financial stakeholders, such as banks, have lent or given the business money. They can take decisions that are in their own interests, rather than those of the business. Sometimes stakeholder groups have conflicting aims.

The community may want the business for some reasons (e.g. employment) but not others (e.g. pollution). Government influences businesses through laws and taxation. Pressure groups are groups of people set to bring about change. Then try to influecne businesses to make the changes they want.