Stakeholders and their objectives
AQA also says:
Spec content: Main stakeholders of businesses; Objectives of stakeholders.
Students should be able to: understand what is meant by a stakeholder and who the main stakeholders of a business are, including owners, employees, customers, local community and suppliers; understand stakeholders' main objectives including maximising pay for workers, minimising environmental impact on local community and high dividend payments for owners.
Who Are Stakeholders?
A stakeholder is any individual or group that has an interest in — or is affected by — the activities and decisions of a business. Stakeholders are not the same as shareholders (who own a share of the business); stakeholders is a much broader category that includes anyone with a stake in what the business does.
Identifying stakeholders matters because their needs and expectations must be considered in business decision-making. Ignoring key stakeholders can damage reputation, disrupt operations, or create legal and regulatory problems.
Main Stakeholders and Their Objectives
| Stakeholder | Main Objectives |
|---|---|
| Owners / Shareholders | Profit; return on investment; high dividend payments; growth in share price (for plc shareholders) |
| Employees | Maximising pay and benefits; job security; good working conditions; career development and progression |
| Customers | Good value for money; high quality products and services; reliable customer service; ethical and sustainable sourcing |
| Suppliers | Prompt and fair payment; long-term contracts providing stable demand; a trustworthy business relationship |
| Local community | Minimising environmental impact (noise, pollution, traffic); providing local employment; contributing positively to the community |
| Government | Payment of taxes; compliance with legislation; creation of employment; contribution to economic growth |
Internal and External Stakeholders
Stakeholders can be divided into two groups:
- Internal stakeholders — those within the business: owners and employees. They are directly part of the organisation and are most immediately affected by its day-to-day decisions.
- External stakeholders — those outside the business: customers, suppliers, local community, government. They are affected by the business's activities but do not operate within it.
Key Takeaways
- A stakeholder is anyone with an interest in or affected by the business — broader than just shareholders.
- Main stakeholders: owners, employees, customers, suppliers, local community, government.
- Each stakeholder group has distinct objectives — owners want profit; employees want fair pay; customers want quality and value; suppliers want payment and stability; the local community wants minimal environmental harm.
- Internal stakeholders (owners, employees) are inside the business; external stakeholders (customers, suppliers, community, government) are outside it.