Stakeholders | What is a Stakeholder? - YouTube

what is a stakeholder this video is going to  look into the typical stakeholders of a business  

how the business can impact these stakeholders  and why these stakeholders may come into conflict  

with one another over certain business decisions

what is a stakeholder a stakeholder is  anyone that has an interest in a business  

stakeholders can have an impact on a  business or be impacted by the business  

these people can be individuals groups of  people or other organizations before we go  

into the types of stakeholders it's important  to know that these stakeholders can be split  

into two different types internal and external  stakeholders internal stakeholders are people  

whose interest in a company comes through a direct  relationship from within the business such as  

shareholders these are internal as they are part  owners of the business due to them holding shares  

in the business it's important to distinguish the  difference between a stakeholder and a shareholder  

a shareholder has shares in the business which  means they own part of the business however  

because they own a part of the business they  are also a stakeholder as they have an interest  

in the business being successful as it will  result in them receiving a share of the profits  

employees are internal stakeholders as they  carry out the day-to-day activities the business  

requires these tasks are usually delegated by the  managers managers are also internal stakeholders  

as they work directly for the business and are in  charge of implementing the vision of the owners  

in contrast to internal stakeholders external  stakeholders are those who do not directly work  

for the company but are affected in some way  by the actions and outcomes of the business  

examples of these are customers they buy the  products or service offered by the business  

and therefore have an interest in the business's  long-term success suppliers these are external  

to the business as they are an organization  in themselves or responsible for providing  

the business with products or services the local  community is anyone located nearby to the business  

they have an interest in how the business  operates in their local community  

pressure groups have a shared goal and try  to influence the decision made by a business  

in pursuit of this goal and finally government  this can be both local or central government  

and they want businesses to provide employment  and pay taxes now we know the different  

stakeholder groups let's look at what each  stakeholder wants in terms of their objectives  

stakeholder objectives stakeholders have their  own objectives and expectations of a business  

these objectives will vary by stakeholder  and here are some of the common objectives  

for the different stakeholder groups shareholders  want maximum profit a long-term growth managers  

want a good salary and opportunities for further  career progression employees want good levels of  

pay job satisfaction and job security and may also  have an interest in career progression just like  

managers customers want a good quality and range  of products at reasonable prices suppliers want  

to receive payments on time and regular orders the  local community so people living within the area  

may be looking for work which local business can  provide to them pressure groups want to increase  

awareness of their cause and influence the  business to make decisions that further their goal  

i.e animal rights groups may pressure cosmetic  companies to stop testing on animals government  

governments want businesses to create more jobs  in order to raise more money from taxes and save  

money on benefit payments as you can see each  stakeholder has their own set of expectations  

for a business and depending on how the business  acts this will affect stakeholders in different  

ways effects of business activity on stakeholders  each of these stakeholders is affected differently  

by what direction the business takes  and which stakeholders they prioritize  

let's look at an example at mcdonald's which has  been pretty popular over recent years there's no  

doubt mcdonald's is a huge success in the business  world this has led to employees rightly or wrongly  

arguing due to mcdonald's success they are  entitled to a higher hourly wage this has been  

known as a fight for 15 as they believe this  wage should be 15 pounds an hour due to this  

mcdonald's needs to decide which stakeholders  they want to prioritize as a wage increase will  

not only impact the employees but will directly  impact all stakeholders possibly in the following  

ways shareholders the effects of a wage increase  on shareholders would most likely be negative the  

wage increase would mean a large increase in  costs for mcdonald's and would see wages rise  

to almost double this would result in a reduction  in profits and a possible reduction in share price  

and dividend payments to shareholders managers  will potentially see their salaries increase  

to ensure they are incentivized to still  take on their additional responsibilities  

if this did not happen it will be demotivating  as an employee with less responsibility  

would receive an equal or even a higher wage  than managers employees this will be a positive  

for the employees as they will see their wages  rise to 15 pounds an hour which will mean they  

are better off financially it may push mcdonald's  towards a more automated system as we've seen with  

the touchscreen ordering system as staffing  may need to be reduced to keep costs down

customers could see an increase in prices  or a reduction in quality as mcdonald's  

would try to recover some losses from suppliers  therefore reducing quality or by raising prices  

suppliers may see mcdonald's try to negotiate  a better price for its product or even find new  

suppliers that are willing to lower their prices  people in the local area may now be financially  

better off this means they will be able to spend  money in the local area and in turn could boost  

the local economy pressure groups that lobbied  for the wage increase will be satisfied and this  

will reduce the pressure on the business from such  activists the government will now be earning more  

money annually as people repaying more income  tax or potentially decreasing their reliance on  

financial support from the government stakeholder  impact ultimately their decision will come down  

to which stakeholder mcdonald's deems to have  the greatest impact on the future growth of the  

business as the action stakeholders take can also  have an impact on the business in the same way  

in which the actions of the business can impact  the stakeholder what impact can the stakeholders  

have on a business shareholders have a significant  impact as they fund the business if they dislike  

what they see they could sell shares which  could see billions wiped off the company's value  

managers make decisions at a lower level but can  still impact the culture and effectiveness of a  

businesses day-to-day operations employees  have relatively low influence on a business  

at an individual level however collectively  they can refuse to work and take strike action  

customers can stop using a product or service and  are responsible for spreading either a positive or  

negative message about a business through word  of mouth in person or on social media suppliers  

could refuse to provide a business with the  goods it needs to operate local communities  

and pressure groups can oppose business  operations and try to stop certain acts happening  

that the local community and these pressure groups  don't agree with finally the government can pass  

laws that must be followed and these can have  a massive impact financially and on the way the  

business operates with all groups having different  objectives and a different level of impact this  

means that when issues arise such as a wage  increase to 15 pounds then this puts stakeholders  

in conflict with one another as each one wants  a different outcome from the issue stakeholder  

conflicts conflicts between stakeholders will  occur and it's something a business must navigate  

sensitively let's use the mcdonald's wage rise  to look at where conflict may occur on this issue  

employee versus shareholders employees want 15  pound an hour in order for them to become more  

financially stable on the other hand shareholders  want to make as much money from their investment  

in the business as possible and ideally want  to pay as little as possible to employees  

as this will maximize profits the two stakeholders  have totally conflicting interest in the business  

and both objectives cannot be met at  the same time if mcdonald's decides to  

pay the 15 pounds immediately then this will  increase operating costs and reduce profits  

impacting shareholders negatively on the other  hand if mcdonald's pay their employees too low in  

order to give shareholders maximum profits then  this could mean employees not wanting to work  

for mcdonald's and taking strike action again  mcdonald's needs to try and strike a balance  

between profits and employee wages which will  satisfy both the shareholder and the employees  

another conflict over the issue may be between  employees and customers these may be in conflict  

due to the employee wanting higher wages  but the customer wanting no price increases  

these wants are conflicting as higher wages could  result in mcdonald's raising their prices to cover  

the increased wage bill if the business  handles both of these conflicts well then  

this will usually result in a compromise being  made that each stakeholder can live with such as  

raising the weight of ten pound for the commitment  being made to increase to fifteen pounds  

over a five year period this may make employees  feel they've been heard and shareholders would  

have time to see how these changes would  impact profits and prices for the consumer  

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