Stakeholder and their relative Importance

Stakeholder and their relative Importance

1. What is a stake holder

   • A stakeholder is any person, organisation or business that holds an interest of some kind in a business, usually due to the business being beneficial to them.
     • Management and employees
     • banks
     • Shareholder
     • Local Commumity
     • Suppliers
     • Trade Unions

2. Stakeholder roles, rights and responsibilities

   • Shareholders are to provide finance and have the responsibility to set targets for managers and adequate time and resources to meet targets
   • local community are to provide labour services required by the business and they are responsible is to cooperate with the business where reasonable to do so
   • Management is to control, command and direct resources. They have to rights to contract of employment and the responsiblity to report stakeholders to act legally and ethically
   • To supply goods and services to allow the business to offer its products to its own customers

3. Importance and influence of stakeholders on business activites

   • Build A new factory
     • Employees
       • More Job opportunity, new working methods in the factory this can cause a reaction of more potential employees seeking a job or trade unions may demand higher pay for more skilled work
     • Local Community
       • More jobs for local residents, however can cause an increase in traffic and pollution
     • Customers
       • Greater efficiency might result in lower prices, therefor people will buy more as its cheaper for the same quality
   • Horizontal Integration takeover
     • Employees
       • combined business is more secure and more career promotion opportunities. Rationalisation may occur to avoid waste and jobs may be lost.
     • Local Community
       • If the business expansion is on the existing site, local jobs and income may increase
     • Customer
       • Economies of scale could lead to lower prices, reduced competition and choices could have the opposite effect and might result in higher pices

4. Business accountability to stakeholders

   • Responsibilities to customers
     • It is essential to satisfy customers in order to stay in business long term. Decisions about quality, design, durability and customer service.
     • Businesses also have to not break the law concerning consumer protection and accurate advertising. In other words to not take advantage of vulnerable customers
     • Benefits of a company doing this, is customer loyalty, repeat purchases, good publicity, good customer feedback.
   • Responsibilities to suppliers
     • If the supplies are of poor quality or are frequently late this will have a major affect on the finished product. This will leave customers not satisfied therefore good and reliable suppliers must be established and clearly know what is required and expected
     • However the business should also satisfy the suppliers aims and requirements like paying on time and placing regular orders
     • Benefits of of accepting these responsibilities include loyal suppliers, preparedness to meet special requests etc

5. Conflicts arising from different stakeholder aims