Stakeholders

Understanding Stakeholders

• Stakeholders are the people or groups who have an interest in the decisions and activities of a business. They can also significantly influence business decisions.
• Examples of stakeholders include employees, customers, suppliers, shareholders and the local community, among others.

Employees as Stakeholders

• Employees provide labour, a key factor of production, and they have a vested interest in the company’s success since their livelihood, job security and career progression depend on it.
• Happy and motivated employees are likely to be more productive and deliver better customer service, impacting the business positively.

Customers as Stakeholders

• Customers are vital for businesses as they purchase their products or services. Their buying decisions are influenced by the business’s product quality, service, price, and reputation.
• The business aims to satisfy and retain its customers because their repeat patronage contributes to stable revenues and profits.

Suppliers as Stakeholders

• Suppliers play a crucial role by providing necessary goods and services to the business, enabling it to operate effectively.
• They are interested in steady demand for their products or services and timely payment from the business.

Shareholders as Stakeholders

• Shareholders are those who own shares in the company. They benefit from the company’s successes and bear the risks of its failures.
• They’re interested in the company’s financial performance because it directly affects the value of their investment and dividend payments.

Community as Stakeholders

• The local community can be affected by a company’s operations in many ways, such as job creation, environmental impact, and support to local services.
• A business with good community relations can benefit from a positive public image and increased loyalty and support.

Importance of Stakeholders

• Understanding the interests of different stakeholders helps businesses make better decisions, manage risks, and improve performance.
• Maintaining positive stakeholder relationships is essential for long-term success because satisfied stakeholders can provide valuable support and resources.
• Conversely, negative stakeholder relationships can harm a business’s reputation and operations.

Remember, successful businesses not only consider their own interests but also strive to balance the diverse interests of their various stakeholders. They understand that their stakeholders’ efforts and support contribute to their overall success and sustainability.