Topic 3 Stakeholders and their influences Mr. BarryYear 12 BTEC Extended

Mr. BarryYear 12 BTEC Extended

Learning objectives Mr. BarryYear 12 BTEC Extended What is a stakeholder? What different types of stakeholders do businesses have? What are the interests and expectations of different stakeholder groups? How do stakeholders influence small and large businesses? Why does conflict sometimes exist between different stakeholder groups?

Are you a stakeholder? You are a stakeholder in many organizations – because there are many organizations which have an impact on your life. Think of one business in which you are a stakeholder. This might be a shop you regularly use, a business you work part-time for, or even an organization such as your school. What is the nature of your stake in the organization? How would you be affected if the organization closed? How might a closure affect other stakeholder groups? Mr. BarryYear 12 BTEC Extended

The influence of stakeholders All stakeholders have an influence over businesses, but this influence will vary depending on the type of stakeholder and the type of business. Do you think you have an influence over any businesses? Consider the way you and your family can influence the following businesses: Tesco your local newsagent your school. Mr. BarryYear 12 BTEC Extended

Stakeholder groups: customers Customers are the people who buy a business’s goods or services. Customers will usually be interested in matters such as: the range of goods and services offered the price and quality of goods or services the opening hours and availability of staff the helpfulness of staff the overall efficiency of the business. Customers are one of the most important stakeholder groups in any business. Why do you think this is? Mr. BarryYear 12 BTEC Extended

Stakeholder groups: owners and shareholders However, the nature of an owner’s stake in a business will vary depending on the type of owner they are. Consider these stakeholders: the sole proprietor of a shop and a £500 shareholder in Tesco. All owners and shareholders of a business have a common interest. They have each invested money in the business; if the business is successful, they will make money; if the business fails they will lose money. What is the difference in the nature of their stakes? Who has more at risk? Mr. BarryYear 12 BTEC Extended

Stakeholder groups: employees Employees expect a number of things from a business they work for, including: Fair pay and treatment Good working conditions Job security and prospects An appropriate range of facilities. How might employees influence a business? Managers share the same expectations as other employees, but will have additional concerns which come with their jobs, such as a pressure to increase sales and cut production costs. As managers are often shareholders, they will also be interested in making money on their shares. Mr. BarryYear 12 BTEC Extended

Stakeholder groups: employees Employees can influence how effectively a business runs through how effectively they fulfil their job roles. What impact would a strike have on a business? Employees can also influence a business by refusing to do their jobs at all, i.e. going on strike. Employees might strike if they feel they’ve been treated unfairly by their employer, or to demand more pay or better working conditions. Mr. BarryYear 12 BTEC Extended

Stakeholder groups: suppliers Suppliers provide goods and services to a business. They rely on the business being successful so that it continues to place orders. Suppliers can influence a business by the quality and price of what they supply, as well as the speed at which they supply it. If there are few suppliers offering the same product or there are no substitutes, a supplier will have a lot of power over a business demanding this product, and can raise its prices. However, if there are many suppliers of a particular product or service, it is the business which has power over the supplier. Mr. BarryYear 12 BTEC Extended

Stakeholder interests and influence Mr. BarryYear 12 BTEC Extended

Stakeholder groups: the local community Can you think of any ways in which communities might influence local businesses? A business can have a big impact on the area in which it is located. A local community will usually expect a business to: provide jobs and services avoid disrupting or polluting the area. Imagine each of these business developments happening in the area where you live: the building of a new motorway a new shopping centre a waste incinerator plant. What positive, and what negative impacts might each business have on your community? Mr. BarryYear 12 BTEC Extended

Stakeholder groups: the government The government is a stakeholder in every type of business. Why do you think this might be? The government is interested in businesses doing well because businesses provide people with employment, and pay tax to the government. The more profit a business makes, the more money the government receives. Overall, successful businesses mean a healthier economy. The government monitors the activities of businesses, and can influence them through the laws and regulations it passes to do with business practices. Businesses are also affected by how much tax the government charges. Mr. BarryYear 12 BTEC Extended

Anagrams Mr. BarryYear 12 BTEC Extended

Hot seat Mr. BarryYear 12 BTEC Extended

Question time! Identify three types of stakeholder in a business and describe the nature of their interest Why would the government be interested in the amount of profit a business makes? The building of a new school in a residential area would affect which type of stakeholder? 4. How can a supplier influence a business? Mr. BarryYear 12 BTEC Extended