Topic 8 8
STAKEHOLDERS OF A COMPANY 1
A stakeholder is an individual or a group, which has a legitimate interest in a company. Interest in a stakeholder could mean several things. A stakeholder could be interested in the profits of the company, its ability to pay its creditors or how it gives back to the community it is operating in.
The stakeholder concept was initially used in 1963 at the Stanford Research Institute through an internal memorandum, defining stakeholders as those groups without whose support the organization would cease to exist. Stakeholders could therefore be anyone who can affect or be affected by the actions of the business.
There are two classifications of stakeholders: internal and external.
Internal Stakeholders
These are individuals or groups within a business. They are also a group of people who work for the business. Some examples include:
Owners
They are the ones who conceptualized and/or set up the business and are interested in maximizing business profits.
Investors
These are individuals or groups who put in money into the business and are interested in the earning potential of the company relative to their investment.
Employees
These are individuals or groups working for the company in exchange for wages or salaries. They are interested in their job security as well as how they can develop their career within the company.
External Stakeholders
These are groups that may or may not survive should the company fail. They are not directly working within the business but are somehow affected by the decisions of the company. Some examples include:
Government
Included are regulatory institutions that are interested in how the company operates and how they are bound to follow already set rules, regulations and laws. They could also be those seated in government positions that are interested in how the people of a city or a country can be affected by the business or how the business can contribute to nation building through tax
A stakeholder is an individual or a group, which has a legitimate interest in a company. Interest in a stakeholder could mean several things. A stakeholder could be interested in the profits of the company, its ability to pay its creditors or how it gives back to the community it is operating in.
The stakeholder concept was initially used in 1963 at the Stanford Research Institute through an internal memorandum, defining stakeholders as those groups without whose support the organization would cease to exist. Stakeholders could therefore be anyone who can affect or be affected by the actions of the business.
There are two classifications of stakeholders: internal and external.
Internal Stakeholders
These are individuals or groups within a business. They are also a group of people who work for the business. Some examples include:
Owners
They are the ones who conceptualized and/or set up the business and are interested in maximizing business profits.
Investors
These are individuals or groups who put in money into the business and are interested in the earning potential of the company relative to their investment.
Employees
These are individuals or groups working for the company in exchange for wages or salaries. They are interested in their job security as well as how they can develop their career within the company.
External Stakeholders
These are groups that may or may not survive should the company fail. They are not directly working within the business but are somehow affected by the decisions of the company. Some examples include:
Government
Included are regulatory institutions that are interested in how the company operates and how they are bound to follow already set rules, regulations and laws. They could also be those seated in government positions that are interested in how the people of a city or a country can be affected by the business or how the business can contribute to nation building through tax