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What Is The Role Of A Stakeholder In A Company?

986 words - 4 pages

A stakeholder is “a person, group or organization that has interest or concern in an organization.”
http://www.businessdictionary.com. Stakeholders are affected by the operations of the business and if the business is successful or unsuccessful.

Internal Stakeholders
Internal stakeholders are stakeholders who “benefit directly from their contributions to the growth of the company.” http://www.investorwords.com
The internal stakeholders in a business are:
• Workers. If Mickey’s or Speedy Pepper started making little profit and starting making a loss then they may have to reduce the number of employees that they have working for them. Workers want to have high wages and a stable job which can’t be done without a good cash flow and a successful business. Employees will also be interested in whether the company offers retirement benefits and employment (career) opportunities.
• Shareholders. Businesses who sell shares on the stock market sell them to shareholders that own a percentage of the company. Their percentage can decrease if the company starts to experience cash flow problems but they are paid dividends once or twice a year if the business makes a good profit. Mickey’s and Speedy Pepper don’t currently have any shareholders as neither of them has sold shares on the stock market.
• Directors. If a Public Ltd. or Ltd. Company starts to become less successful then the director of the company could be fired which would give them a bad reputation. However, if the company starts to become increasingly successful the director will receive large financial pay-outs as a reward. There are no directors at Mickey’s or Speedy Pepper as neither of them are a Public Ltd. or Ltd. Company, they are privately owned.
• Owners. Mickey’s is a sole trader company, if the business is unsuccessful then the sole trader stops making money and may consider selling the business; this could also apply to Speedy Pepper. For Speedy Pepper, one of the partners may sell their share in the business to the other partner if the business starts failing and they no longer want to be a part of it.
External Stakeholders
External stakeholders are “individuals and organizations that are affected by the financial well-being of a company, who are not directly a part of that company.” http://www.investorwords.com
The external stakeholders in a business are:
• The community. Businesses employ people in the local area which injects money into the local economy. Mickey’s and Speedy Pepper both employ local people. However, Speedy Pepper has few members of staff and is operated by the two partners so they do not effect local employment massively. The work Speedy Pepper offers is part time as they are only open during the evening, whereas Mickey’s is open from mornings to late afternoons so they offer full time positions, not just part time.
• Suppliers. Mickey’s hair product suppliers and Speedy Pepper’s food suppliers may stop supplying them if they start to owe them...

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