Stakeholders
DEFINITION- A Stakeholder is a group or individual with an interest in the business and what it does.
Stakeholders and their wants/needs
Workers
Managers
Owners
Customers
Supplies
Government
Local Community
Competitors
Pressure groups
Internal- Stakeholders (inside the business) [Highlighted in orange]
e.g Employees/Employers
External- Stakeholders (outside the business) [Highlighted in blue]
e.g Customers/Suppliers
Conflict of interest
A conflict of interest occurs when a number of stakeholders want different things and they cannot agree. For example, Virgin's customers will want lower prices for flights; however, Virgin's shareholders will want to see profits increased to provided them with increased dividends.
Consequences of not listening to stakeholders
Employees - might go on strike
Customers - may opt to purchase with competition like British Airways
Suppliers - may be offering better materials and not listening might result in poor quality products
Shareholders - may spot investing or withdraw investment
Government - may take legal action against Virgin
These would all have a negative impact on Virgin. This could lead to Virgin gaining a bad name and loosing customers
Stakeholders and their wants/needs
Workers
- Pay
- Job security
- Social groups
Managers
- Long term future
- Decision making
Owners
- Profits of the firm
- Management of the firm
Customers
- Low prices
- Good service
- Choice of goods
Supplies
- Ability to pay bills
- Secure long term future
Government
- Paying taxes
- Keeping to the law
Local Community
- Environmental impact (Traffic congestion)
- Job creation
- Development
Competitors
- Prices
- Advertising
- Sales levels
- Products
Pressure groups
- Environment (Green peace)
- Treating workers fairly (trade unions)
Internal- Stakeholders (inside the business) [Highlighted in orange]
e.g Employees/Employers
External- Stakeholders (outside the business) [Highlighted in blue]
e.g Customers/Suppliers
Conflict of interest
A conflict of interest occurs when a number of stakeholders want different things and they cannot agree. For example, Virgin's customers will want lower prices for flights; however, Virgin's shareholders will want to see profits increased to provided them with increased dividends.
Consequences of not listening to stakeholders
Employees - might go on strike
Customers - may opt to purchase with competition like British Airways
Suppliers - may be offering better materials and not listening might result in poor quality products
Shareholders - may spot investing or withdraw investment
Government - may take legal action against Virgin
These would all have a negative impact on Virgin. This could lead to Virgin gaining a bad name and loosing customers