The Role of Stakeholder Groups
Involved in Business Activity
Main internal and external stakeholder groups
There are many groups of people that share interests with the growth of a business. They take benefits with the growth of business and if a business fails, these groups also face some losses. These groups are called stakeholders.
There are different groups of stakeholders that are divided into internal and external stakeholders.
• Owners (internal)
• Workers (internal)
• Managers (internal)
• Government (external)
• Bank (external)
• Customers (external)
• The whole community (external)
Objectives of Different
The Owners' objectives in the business are related to sharing in profit. The more business growth, the more profit is possible in return for their investment. When a business will grow, its investment value will also be increased.
If on one side the owners take benefits from the business, workers are also stakeholders for it. If business increases, their chances for job stability also increases. They continue their jobs and contracts. There is more chance for them to have more job satisfaction. Growth in their career also related to growth in business.
The career growth of business managers also depends upon the growth of a business. Their job security, job satisfaction, and promotions, all are related to the growth of a business. They may draw higher salaries if their firm grows.
When business is stable and has potential for growth, banks offer them loans for expansion. Banks offer loans on different terms and conditions but one thing is common in all conditions that banks issues loans on interest. The benefit of banks is that they can charge interest from businesses on the loans given to them for expansion.
Governments encourage private businesses as these businesses share the burden of government. The more business opportunities create more jobs. It also increases the output of the country and results in the growth of GDP. It directly benefits the governments by paying various taxes from which income tax and sales tax are most commonly known.
Customer is the only stakeholder which pay the price or your product or service. The customer stake is having a product or service of good quality. The customer seeks quality of product with a minimum price that is commonly known as value for money.
The Whole Community
The whole community is a stakeholder as they expect environment-friendly products from the business and industry owners. They consider environment-friendly business and industry atmosphere is their right. They want production according to the international standards that should not damage the natural environment of the country.
How These Objectives Might Conflict With Each Other
We know that there are various stakeholders who have their objectives in business. Sometimes some conflicts arise in these objectives.
We can consider the example of workers and managers. The main objective of a worker is to get a job and to renew a job contract, an increase in salaries, etc. it is only possible when business is in profit. On the other side business managers also want to get higher salaries. An increase in profit is also necessary for a business to pay higher salaries.
The conflict arises when workers want to renew the job contract while business managers cut down various jobs to show fewer expenses and more profit.
Consumers want the best quality in the products they want to buy but they also want cheap prices with quality. It is difficult for businesses to provide this. If businesses provide good quality, the price of the product will ultimately go high. If the price is fixed lower, then there is a high chance that quality will be compromised.