What is meant by the term stakeholder? Critically examine the contention that growing stakeholder power conflicts with improved business performance.
For the purpose of this report I intend to define the term stakeholder, list what various types there are, their importance to the company as individuals and a whole, what powers they hold individually and how these powers conflict or enhance business performance.
A company has responsibilities to a number of interested parties; this consists of the shareholders, society, managers, creditors, employees and customers.
What is the definition of a stakeholder?.
A stakeholder has been defined either an individual or group who have a direct interest in the activities, operations and performance of a firm.
There are two different types of stakeholders.
Internal stakeholder.
External stakeholder.
Internal stakeholders consist of management, employees and shareholders, while external stakeholders are financiers, local community, suppliers, government and consumers. The main stakeholders; shareholders, employees, customers, financiers, suppliers and the local community have an interest to some extent in seeing that sensible decisions are being made on their behalves, in the best interest of the firm and their investment.
Employees.
Employees are said to have a stake in the company as they work for the company and are at the same time dependent on the company for not only their incomes, but their jobs as well.
Customers.
Customers have a stake in the organisation since they buy products which they expect to be safe, effective, affordable and supplied at a stable rate.
Shareholders.
There are an increasing number of shareholders In a company who have an interest in so far, s they have invested money in the company in question, and are also looking for a return on that investment, and are looking for a return on that investment in the form of dividends.
Suppliers.