BUSINESS ORGANIZATION AND ENVIRONMENT Stakeholders

Stakeholders

People or groups of people who can be affected by, and therefore have an interest in, any action by an organization

Special interest group

An organization of people who have a common interest, such as the protection of the global environment, and collectively act to achieve that interest by swaying public opinion and support, lobbying government policy and influencing business behaviour

Internal stakeholders

These stakeholders are members of the organisation; i.e. the employees, the shareholders (who own the business), managers and directors of a business

External stakeholders

These stakeholders do NOT form part of the organization but have a direct interest or involvement in the actions of the organization. Examples include customers, suppliers and the government

"Cats are animals, but animals are not necessarily cats." Apply this same reasoning to *shareholders* and *stakeholders*

*Shareholders are stakeholders, but stakeholders are not necessarily shareholders*.

"Women are people, but people are not necessarily women." Apply this same reasoning to *shareholders* and *stakeholders*

*Shareholders are stakeholders, but stakeholders are not necessarily shareholders*.

Pressure groups

A type of special interest group which consist of individuals with a common concern who seek to place demands on organisations to act in a particular way or to influence change in their behaviour (e.g. Greenpeace and PETA)

*Competitors*. External or internal stakeholder?

External

*Customers*. External or internal stakeholder?

External

*Government*. External or internal stakeholder?

External

*Local community*. External or internal stakeholder?

External

*Special interest groups*. External or internal stakeholder?

External

*Suppliers*. External or internal stakeholder?

External

*Directors*. External or internal stakeholder?

Internal

*Employees*. External or internal stakeholder?

Internal

*Managers*. External or internal stakeholder?

Internal

*Shareholders*. External or internal stakeholder?

Internal

Distinguish between *shareholders* and *stakeholders*

Shareholders are the part owners of a private or public company. They have a direct interest in the activities and performance of a business and are, therefore, stakeholders of an organisation. However, there are other stakeholders of an organisation that do not necessarily own shares in the business; e.g. employees, the local community, suppliers, competitors. So, *shareholders are stakeholders, but stakeholders are not necessarily shareholders*.

Managers

The people responsible for the day-to-day running of the organization, or a department within the organization. They are accountable to directors and responsible for their staff teams

Shareholders

The people who own shares in a private or public limited company; i.e. they are the part owners of a company

Directors

The senior members of staff who have been elected by shareholders of a company to run the company on their behalf

Stakeholder concept

The view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders