Meeting the Needs
of Stakeholders
Internal and External
Stakeholder Analysis
Should Penny Cut Her Hair?
What are Stakeholders?
 Stakeholders are groups of people who
have an interest in the activities of a
business
 They can be seen as being either
external to the organization,
or internal
 But some may be both!
Types of Stakeholder
 Owners (I)
 Shareholders (I)
 Managers (I)
 Staff or employees (I)
 Customers (E)
 Suppliers (E)
 Community (E)
 Government (E )
 Rivals (E )
I = Internal
E = External
Internal and External Stakeholders
Internal stakeholders are those who are
‘members’ of the business organisation
Owners and shareholders
Managers
Staff and employees
External stakeholders are not part
of the firm
But…..!
 Some groups can be both internal and
external stakeholders
 Such as staff or shareholders
who are also local community residents
 Can you think of any others?
Characteristics of Stakeholders
1. Owners and Shareholders
 The number of owners and the roles they carry
out differ according to the size of the firm
 In small businesses there may be only one owner
(sole trader) or perhaps a small number of
partners (partnership)
 In large firms there are often thousands
of shareholders, who each own a small part
of the business
Characteristics of Stakeholders
2. Managers:
organize
make decisions
plan
control
are accountable to the owner(s)
Characteristics of Stakeholders
3. Employees or Staff:
 A business needs staff or employees
to carry out its activities
 Employees agree to work a certain number
of hours in return for a wage or salary
 Pay levels vary with skills, qualifications, age,
location, types of work and industry
and other factors
Characteristics of Stakeholders
4. Customers:
 Customers buy the goods or services
produced by firms
 They may be individuals or other
businesses
 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:
 Firms get the resources they need to
produce goods and services from
suppliers
 Businesses should have effective
relationships with their suppliers in order
to get quality resources at reasonable
prices
 This is a two-way process, as suppliers
depend on the firms they supply
Characteristics of
Stakeholders
6. Community:
 Firms and the communities they exist in
are also in a two-way relationship
 The local community may often
provide many of the firm’s staff and
customers
 The business often supplies goods
and services vital to the local area
 But at times the community can feel
aggrieved by some aspects of what a
firm does
Characteristics of
Stakeholders
7. Government:
 Economic policies affect firms’ costs (through
taxation and interest rates)
 Legislation regulates what business can do
in areas such as the environment
and occupational safety and health
 Successful firms are good for governments
as they create wealth and employment
Characteristics of
Stakeholders
7. Rival firms: (last but not least)
 Innovation and product development from rival
companies can “set the agenda” for a business,
e.g. Apple watch influences Samsung product
development
 Competitors may try to use their market power
to exclude competition (price war)
 May not be important in all markets
Activity – Stakeholder
Analysis
 Read the Stakeholder handout
 A) Identify the stakeholders,
 B) The stakeholder interests (why they care), and
 C) Identify conflicting stakeholder interests
 Football Club - handout
 Night Club – short answer (paragraph)
 Penny’s Hair (it’s a business decision!) –
discussion