Accounting technicians scheme west africa
A.12 Stakeholders in Business and their Expectations
Download 3.37 Mb. View original pdf
|
- Navigate this page:
- A.12.3 External Stakeholders
- A.12.4 Expectation of Stakeholders
- A.12.5 Effects of Stakeholders Expectations
| A.12 Stakeholders in Business and their Expectations A.12.1 Definition of Stakeholders The term stakeholder means any individual or group of individuals who have a strong interest (a stake) in the organisation and what it does or trying to achieve. A.12.2 Internal Stakeholders Internal stakeholders of a company are inside the company and apart of it. They include i) Shareholders ii) Directors and Top Management iii) Senior Management Staff iv) Other Managers and Staff A.12.3 External Stakeholders External stakeholders are individuals or groups who do notwork for the company but who nevertheless have keen interest in what the company does and who might be able to influence the way in which the company is governed. They include i) Lenders ii) Suppliers iii) Regulators iv) Government v) General Public vi) Special Interest Groups vii) Company Auditors A.12.4 Expectation of Stakeholders Each stakeholder or stakeholder group has different expectations form a company. They expect to benefit from their association with the company and the expected benefits are different. For example, shareholders expectation may include share price growth, stable dividends and good returns on investment, while the directors and senior managers might place emphasis on personal advancement such as remuneration, status and power to make key strategic decisions. A.12.5 Effects of Stakeholders Expectations These stakeholder groups have different rights and duties and they also have different expectations of what the company should provide for them. The effect of these differences in expectations is regular stakeholders conflict. For example, directors and senior managers will normally press for improved take-home pay and other welfare packages which the shareholders might consider as eroding the profitability of the 22 company and consequent reduction in dividend payout, which is a major interest to shareholders. If a company wishes to remain associated with its stakeholders, it must be innovative enough to balance and satisfy these expectations. Summary The primary purpose of the business enterprise is to make gain (profit, recognition and employment generation. Profit is a reward to the owners for taking the risk of establishing a business. Businesses can be grouped according to their size, ownership types, use of output and input, etc. The resources of business were listed and discussed. The objectives of business were well explained. The bases of classification of business were given good attention. The reasons why business fail were articulated and how to plan against business failure was equally addressed. The section highlighted the importance of profit in business. The requirements for success in modern business were discussed and also the qualities of a good businessperson. Download 3.37 Mb. Share with your friends:
|