International Institute of Planning &

Management

Stake Holders
 Stake Holders
w A stakeholder is any individual or organization
that is affected by the activities of a business.
They may have a direct or indirect interest in
the business, and may be in contact with the
business on a daily basis, or may just
occasionally.
 Types of Stakeholder
w Owners (I) w I = Internal
w Shareholders (I)
w Managers (I) w E = External
w Staff or employees (I)
w Customers (E)
w Suppliers (E)
w Community (E)
w Government (E)
Stakeholders versus Shareholders
w Shareholders hold shares in the company –
that is they own part of it.

w Stakeholders have an interest in the

company but do not own it.
Responsibility of the Business Towards The Stake
Holder

w Social Responsibility

w Ethics
Social Responsibility
 Ethics
w Ethics refers to the moral rights and wrongs of
any decision a business makes.
w Some examples of ethical policies are:
w Reduce pollution by using non-fossil fuels.
w Disposal of waste safely and in an
environmentally friendly manner.
w Sponsoring local charity events.
w Trading fairly with developing countries.
 Characteristics of Stakeholders
1. Owners and Shareholders

w The number of owners and the roles they carry

out differ according to the size of the firm
w In small businesses there may be only one
owner (sole trader) or perhaps a small number
of partners (partnership)
w In large firms there are often thousands
of shareholders, who each own a small part
of the business
 Characteristics of Stakeholders
2. Managers:


w Organize
w Make decisions
w Plan
w Control
w Are accountable to the owner(s)
 Characteristics of Stakeholders
3. Employees or Staff:

w A business needs staff or employees

to carry out its activities
w Employees agree to work a certain number
of hours in return for a wage or salary
w Pay levels vary with skills, qualifications, age, location, types
of work and industry
and other factors
 Characteristics of Stakeholders
4. Customers:

w Customers buy the goods or services produced by firms

w They may be individuals or other businesses
w Firms must understand and meet the needs
of their customers, otherwise they will fail
to make a profit or, indeed, survive
 Characteristics of Stakeholders
5. Suppliers:

w Firms get the resources they need to produce goods and

services from suppliers
w Businesses should have effective relationships with their
suppliers in order to get quality resources at reasonable prices
w This is a two-way process, as suppliers depend on the firms
they supply
 Characteristics of Stakeholders
6. Community:

w Firms and the communities they exist in

are also in a two-way relationship
w The local community may often provide many of the firm’s
staff and customers
w The business often supplies goods
and services vital to the local area
w But at times the community can feel aggrieved by some
aspects of what a firm does
 Characteristics of Stakeholders

7. Government:

w Economic policies affect firms’ costs (through taxation and

interest rates)
w Legislation regulates what business can do
in areas such as the environment
and occupational safety and health
w Successful firms are good for governments
as they create wealth and employment
Thank You