2.5: Business Participants and Stakeholders
Participants
Business participants are the people who participate in conducting the work of the business. These always include the employees and managers, but often include suppliers, customers, and shareholders. Every business must have one or more owners whose primary role is to invest money in the business. When a business is being started, it is generally the owners who polish the business idea and bring together the resources (money and people) needed to turn the idea into a business. The owners also hire employees to work for the company and help it reach its goals. Owners and employees depend on a third group of participants— customers. Ultimately, the goal of any business is to satisfy the needs of its customers in order to generate a profit for the owners. Other participants can include suppliers and even competitors.
Stakeholders
Stakeholders are those affected by the business’s operations and its decisions. Examples of stakeholders include shareholders, investors, suppliers, the community, customers, employees, competitors, and governmental agencies. Consider your favourite restaurant. It may be an outlet or franchise of a national chain (more on franchises in a later chapter) or a local “mom and pop shop” without affiliation to a larger entity. Whether national or local, every business has stakeholders — those with a legitimate interest in the success or failure of the business and the policies it adopts. Stakeholders include customers, vendors, employees, suppliers, landlords, competitors, bankers, and others (see Figure 2.1). Other stakeholders include the general public, the environment and all the various government departments that impact the business. All have a keen interest in how the business operates, for obvious reasons in most cases. If the business fails, employees will need new jobs, vendors will need new customers, and banks may have to write off loans they made to the business. Stakeholders do not always see things the same way — their interests sometimes conflict with each other. For example, lenders are more likely to appreciate high profit margins that ensure the loans they make will be repaid, while customers would probably appreciate the lowest possible prices. Pleasing stakeholders can be a real balancing act for any company.
Media Attributions
“Figure 2.1: Common business stakeholders include the environment, service users, policy makers, the public, managers, customers, the government, shareholders, funders, employees, suppliers, and owners” is reused from Business Stakeholders, © 2022 by Kindred Grey, licensed CC BY 4.0.
Image Descriptions
Figure 2.1
Nine circles of varying colours and diameters labelled with different business stakeholders. The circles are arranged clockwise in the following order: owners, employees, shareholders, customers, policy makers, managers, and service users. The two circles in the middle are for funders and suppliers.
People who participate in conducting the work of the business. These always include the employees and managers, but often include suppliers, customers, and shareholders.
Those affected by the business's operations and its decisions. Examples include shareholders, investors, the community, customers, competitors, and governmental agencies.
