Skip to main content. Module: Role of Business. Search for:. Business Stakeholders. Internal Stakeholders Internal stakeholders are groups or people who work directly within the business, such as managers, employees, and owners.
Licenses and Attributions. CC licensed content, Original. If the company fails, the employee is out of a job. Thus, the employee has every interest in seeing the company succeed. An employee who has potential growth opportunities with the company has an even bigger stake.
Some companies offer company stock plans and profit sharing, adding to the employees' interest in doing well at work. As such, employees are considered internal stakeholders.
External stakeholders are those who do not have a direct tie to the company. They are not employees and do not have any direct financial interest in the profit or loss of the company. Instead, they have an interest in how the company affects the community or a part of the community.
External stakeholders include government entities such as city councils, local schools, other businesses and residents in the area where the company conducts business. The external stakeholder maintains an interest in the success, failure or direction of a company because it directly impacts his own interests.
A company with a large manufacturing plant in a city will have external stakeholders who want to see the plant stay in the community rather than move to another, because the plant may have a financial impact on other businesses, suppliers and the overall financial health of the town.
For example, the mayor of the city is an external stakeholder seeking to maintain a positive relationship and create a conducive environment for the plant to stay. External stakeholders may also seek to prevent a business from doing something in a community.
Many local school districts across the country have stood against medical marijuana dispensaries being located near schools. The school district's stake isn't financial; it is a moral or ethical stake in the development and protection of its students and families.
The school could work to set regulations about how close a dispensary can be and other rules and regulations that may hinder the ability of such a company to succeed in the area.
The external stakeholder is looking to protect his personal, financial and business interests. Not every external stakeholder has the same type of stake or interest in any one particular business. Similarly, employees of the company might lose their jobs.
However, shareholders of the company can sell their stock and limit their losses. Examples of important stakeholders for a business include its shareholders, customers, suppliers, and employees. Some of these stakeholders, such as the shareholders and the employees, are internal to the business.
These days, it has become more common to talk about a broader range of external stakeholders, such as the government of the countries in which the business operates, or even the public at large. Stakeholders are important for a number of reasons. External stakeholders on the other hand can affect the business indirectly.
For instance, customers can change their buying habits, suppliers can change their manufacturing and distribution practices, and governments can modify laws and regulations. Although shareholders are an important type of stakeholder, they are not the only stakeholders. Examples of other stakeholders include employees, customers, suppliers, governments, and the public at large. In recent years, there has been a trend toward thinking more broadly about who constitutes the stakeholders of a business.
Investing Essentials. Business Essentials. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification.
I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Suppliers are stakeholders who provide input to the company. Companies need a variety of raw materials, equipment, money, and machinery to operate.
Also, in broad scope, they need labor. Please note, in broad scope, suppliers could cover creditors, shareholders, and the public. They are a supplier of production factors. Creditors and shareholders supply money to the company. Meanwhile, the community provides labor. But, in this classification, we exclude them from the definition of suppliers.
Reliable suppliers allow companies to reduce uncertainty in technical or production operations. They can have a direct effect on company efficiency. Not only that, but they also have an indirect effect on their ability to attract customers.
The price and quality of inputs determine the price and quality of the output. When companies get low input prices, they could set low selling prices.
Likewise, high-quality input is a prerequisite for high-quality products or services. For example, the quality of gems depends on the rocks that the company processes. A union consists of a group of organized workers who act in the common interest. Together, their bargaining power towards the company becomes stronger. They can force companies not to engage in discriminatory practices or pay unreasonable wages.
The nature of the relationship between trade unions and companies has a direct effect on productivity and effectiveness of business activities. Such a relationship can also affect other stakeholders. For example, unions carry out mass strikes to demand wage increases. It stops and interrupts the production process. Output falls.
0コメント