1.4 Stakeholders

Owners

• In limited companies, the shareholders are the owners
• A share of the profit paid to shareholders is called a dividend
• High profit = high dividend = high share price
• If a share price increases, a shareholder can sell their shares for more than they paid for them and make a profit
• For sole traders & partnerships, the owner(s) keeps all of the profits

Employees

Employees want:

• Job security
• Promotion opportunities
• Increasing pay

If a business does not meet these expectations, they may have trouble recruiting and retaining staff; and staff may become demotivated and unproductive.

Community

The community is those people living and working near to the business. They want:

• Well paid, secure jobs from the business
• Environmental and ethical considerations: no noise or pollution, fair treatment, and consultation on plans which may affect them

An unhappy community may complain to the local council or boycott the company's products or services.

Suppliers

Firms which supply the business want:

• To be paid on time
• To increase the amount of good / services a business buys from them
• The more successful a business is, the more goods / services it will purchase from suppliers, which improves the supplier’s business

A good working relationship with suppliers can be very beneficial to a business.

Customers

Customers want:

• High quality products and service
• Low prices
• Satisfied customers will purchase from the business again, increasing growth and profit — dissatisfied customers will do the opposite!

Government / Local Council

Government, including local councils, want:

• Taxes to be paid by the business when it makes a profit
• Taxable salaries paid to staff
• Employment opportunities