Year 12 BTEC Extended

Topic 3 Stakeholders and their influences

Mr. Barry

Year 12 BTEC ExtendedMr. Barry

Year 12 BTEC Extended

Learning objectives

Mr. Barry

• What is a stakeholder? What different types of stakeholders do businesses have?

• What are the interests and expectations of different stakeholder groups?

• How do stakeholders influence small and large businesses?• Why does conflict sometimes exist between different

stakeholder groups?

Year 12 BTEC Extended

Are you a stakeholder?You are a stakeholder in many organizations – because there are many organizations which have an impact on your life.

Think of one business in which you are a stakeholder. This might be a shop you regularly use, a business you work part-time for, or even an organization such as your school.

What is the nature of your stake in the organization?

How would you be affected if the organization closed?

How might a closure affect other stakeholder groups?

Mr. Barry

Year 12 BTEC Extended

The influence of stakeholdersAll stakeholders have an influence over businesses, but this influence will vary depending on the type of stakeholder andthe type of business.

Do you think you have an influence over any businesses? Consider the way you and your family can influence the following businesses:

Tesco

your local newsagent

your school.

Mr. Barry

Year 12 BTEC Extended

Stakeholder groups: customersCustomers are the people who buy abusiness’s goods or services.

Customers will usually be interested in matters such as:

the range of goods and services offeredthe price and quality of goods or servicesthe opening hours and availability of staffthe helpfulness of staffthe overall efficiency of the business.

Customers are one of the mostimportant stakeholder groups inany business.

Why do you think this is?

Mr. Barry

Year 12 BTEC Extended

Stakeholder groups: owners and shareholders

However, the nature of an owner’s stake in a business will vary depending on the type of owner they are.Consider these stakeholders: the sole proprietor of a shop and a £500 shareholder in Tesco.

All owners and shareholders of a business have a common interest. They have each invested money in the business; if the business is successful, they will make money; if the business fails they will lose money.

What is the difference in the nature of their stakes?

Who has more at risk?

Mr. Barry

Year 12 BTEC Extended

Stakeholder groups: employees

Employees expect a number of thingsfrom a business they work for, including:

• Fair pay and treatment

• Good working conditions

• Job security and prospects

• An appropriate range of facilities.

How might employees influence a business?

Managers share the same expectations as other employees, but will have additional concerns which come with their jobs, such as a pressure to increase sales and cut production costs. As managers are often shareholders, they will also be interested in making money on their shares.

Mr. Barry

Year 12 BTEC Extended

Stakeholder groups: employeesEmployees can influence how effectively a business runs through how effectively they fulfil their job roles.

What impact would a strike have on a business?

Employees can also influence a business by refusing to do their jobs at all, i.e. going on strike. Employees might strike if they feel they’ve been treated unfairly by their employer, or to demand more pay or better working conditions.

Mr. Barry

Year 12 BTEC Extended

Stakeholder groups: suppliersSuppliers provide goods and services to abusiness.

They rely on the business being successful so that it continues to place orders.

Suppliers can influence a business by the quality and price of what they supply, as well as the speed at which they supply it.

If there are few suppliers offering the same product or there are no substitutes, a supplier will have a lot of power over a business demanding this product, and can raise its prices. However, if there are many suppliers of a particular product or service, it is the business which has power over the supplier.

Mr. Barry

Year 12 BTEC Extended

Stakeholder interests and influence

Mr. Barry

Year 12 BTEC Extended

Stakeholder groups: the local community

Can you think of any ways in which communities might influence local

businesses?

A business can have a big impact on the area in which it is located. A local community will usually expect a business to:

• provide jobs and services

• avoid disrupting or polluting the area.

Imagine each of these business developments happening in the area where you live:

the building of a new motorway a new shopping centre a waste incinerator plant.

What positive, and what negativeimpacts might each business have on your community?

Mr. Barry

Year 12 BTEC Extended

Stakeholder groups: the governmentThe government is a stakeholder in every type of business. Why do you think this might be?

The government is interested in businesses doing well because businesses provide people with employment, and pay tax to the government. The more profit a business makes, the more money the government receives. Overall, successful businesses mean a healthier economy.

The government monitors the activities of businesses, and can influence them through the laws and regulations it passes to do with business practices. Businesses are also affected by how much tax the government charges.

Mr. Barry

Year 12 BTEC Extended

Anagrams

Mr. Barry

Year 12 BTEC Extended

Hot seat

Mr. Barry

Year 12 BTEC Extended

Question time!

Identify three types of stakeholder in a business and describe the nature of their interest.

1.

2.

3.

Why would the government be interested in the amount of profit a business makes?

The building of a new school in a residential areawould affect which type of stakeholder?

4. How can a supplier influence a business?

Mr. Barry