Business Studies - Effects of Expansion on Stakeholders

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The Growth of a Business Affects its Stakeholders

  • Shareholders - Shareholders are likely to benefit from any increased profit that expansion brings. However, they might be asked to buy more shares and invest more money to help the business expand in the first place. Also, as a business grows and creates more shares, the power of smaller shareholders will be reduced. Sometimes these smaller shareholders join together to try to exert more influence
  • Employees - Employees should benefit from greater job security as larger business are less likely to fail than small firms. On the other hand large firms tend to be more hierarchical, so employees may feel less involved in the running of the business. As a result, workers in large firms are more likely to join a trade union in order to protect their interests than workers in small firms. 
  • Government - The government will collect more taxes as the business becomes larger and more profitable. However, some businesses can become so powerful and…




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