STAKEHOLDER INTERESTS

Definition of Stakeholder..  A person or group that has an investment, share, or interest in something, as a business or industry

Have a think…  In small groups:  Develop your own definition of a stakeholder  Develop a list of the stakeholders related to your school. Eg You are a stakeholder in your own education  Think of a business – who are the stakeholders in the business and why?

YouTube Clip…  What is a stakeholder in a business… (skip section 3.26 – 5.02)

Stakeholder interests….  Groups in society (stakeholders) have an interest in the performance and activities of businesses because it has an impact on them  Stakeholders’ interests can be financial – but can also involve issues such as the safety of a product  Stakeholders of a company can be found in the:  Internal environment: direct control – staff, organisational structure, policies  External environment: indirect control – customers, suppliers, competitors

Main stakeholders…  Owners/Shareholders:  A business is the property of its owner/s  Owners receive profits generated by the business therefore have a significant stake in the businesses performance  Owners in large companies are usually shareholders: who have a direct financial investment/interest in the company Stake: The amount someone has invested in a business

 Managers:  Employed to direct the business on behalf of the owners  Managers do not usually receive a share of the business profits – they are instead paid a salary

 Investors/lenders  Business owners may raise funds through external investors (individuals, banks)  Companies may ask for additional investments from their shareholders Therefore investors have a stake in the businesses performance as if the business does not make profits – their investment money will be lost

 Employees  Staff have a stake in organisational performance – including the businesses profitability Job security depends on profitability of the business

 Suppliers  Businesses buy inputs from other businesses. Inputs could include things such as Raw materials Energy Plastic Factory Machinery Equipment  Suppliers have a financial stake in an ongoing flow of orders and reliable payment from the buyer - if a business is not making profits – it will slow down its orders to the suppliers

 Customers  The goods and services produced by businesses are brought and used by customers (clients for services)  Profits are made from customers buying the businesses product/service  Profits come from customers wanting a product that much that they will spend money on it

 Government  Governments recognise that the country’s standard of living is closely tired to business performance  Successful businesses provide jobs and generate wealth Standard of living: Refers to individuals having the financial resources to acquire goods and services available in the market

 Local Community  Many communities have a substantial stake in business performance in their local area  Large communities provide employment and training  Supple goods and services that might otherwise be difficult to obtain  Part of a community life –sponsorship of sporting teams

 International community  International community is increasingly seen as a stakeholder in business activities and the social responsibility of large organisations