Business: Stakeholders

Business: Stakeholders

Identification of Stakeholders

  • A stakeholder is any individual, group, or organisation that affects or can be affected by a business’s actions.
  • The main stakeholders in a business include employees, customers, suppliers, owners, and nearby communities.

Rights and Responsibilities

  • Each stakeholder has certain rights and responsibilities associated with their interaction with the business.
  • For instance, employees have a right to a safe working environment and the responsibility to perform their jobs effectively.
  • Owners have a right to receive profit shares and the responsibility to make ethical business decisions.

Impact on Business Performance

  • Stakeholders have significant impact on business performance.
  • Employees contribute to productivity, while customers’ purchases drive revenue.
  • Suppliers provide the necessary goods or services for the business to operate, while the community can offer support or opposition to the business.

Stakeholder Conflict

  • Conflict can arise between the interests of different stakeholders, particularly between owners aiming for profit maximisation and employees seeking higher wages or better working conditions.
  • Businesses must balance conflicting stakeholder needs and strive to align all stakeholder interests towards the business’s goals.

Customer Loyalty

  • Satisfying customers is key to building customer loyalty and repeat business.
  • Businesses can cultivate customer loyalty by offering quality products, superior service, and responding effectively to customer complaints or feedback.

Employee Morale and Productivity

  • Fair treatment and recognition of employees can improve employee morale and productivity.
  • High employee morale often leads to improved productivity and reduced staff turnover, which can significantly impact business success.

Community Relations

  • Good community relations can boost a business’s public image and help it gain social license to operate.
  • Businesses can foster positive relations by contributing to local causes, minimising their environmental impact, and working to benefit the local economy.

Understanding the needs and concerns of different stakeholders is critical for a business to operate effectively and achieve its strategic objectives.