Stakeholders

Welcome to the World of Stakeholders!

Ever wondered why a business can’t just do whatever it wants? Or why a local shop might suddenly start using paper bags instead of plastic? It’s usually because of stakeholders. In this chapter, we’re going to explore who these people are, what they want, and how they can actually "make or break" a business. Understanding stakeholders is a huge part of understanding how Business in the Real World actually works!

What is a Stakeholder?

Don't worry if this seems like a fancy word—it’s actually quite simple. A stakeholder is any person, group, or organisation that has an interest in or is affected by the activities of a business.

Analogy: Think of a business like a giant stone dropped into a pond. The "splash" is the business activity, and the "ripples" are the effects felt by everyone standing near the edge. All those people watching the ripples are stakeholders.

Who are the Main Stakeholders?

According to your AQA syllabus, there are five main groups you need to know. Here is a quick memory aid to help you remember them:

Mnemonic: O.C.E.S.L. (Our Cats Eat Silly Lizards)
Owners
Customers
Employees
Suppliers
Local Community

1. Owners (or Shareholders)

These are the people who own the business. In a small shop, it’s the person behind the counter. In a big company like Apple, it’s the shareholders.

What they want: They want the business to make a big profit so they can receive high dividend payments (a share of the profit) and see the value of their business grow.

2. Employees

The people who work for the business.

What they want: They want job security (knowing they won't be fired tomorrow) and maximising pay (getting the best salary possible). They also care about having a safe and happy place to work.

3. Customers

The people who buy the goods or services.

What they want: They want high-quality products at a fair price. They also expect good customer service and want to feel like they are getting "value for money."

4. Suppliers

Other businesses that sell raw materials or parts to the business (e.g., a farmer selling milk to a supermarket).

What they want: They want to be paid on time and want the business to keep regular orders coming in so they stay in business too.

5. Local Community

The people who live in the area where the business is located.

What they want: They want the business to provide local jobs but they also want it to minimise environmental impact (less noise, less traffic, and no pollution near their homes).

Quick Review:
- Stakeholders have a "stake" in the business.
- Owners want profit.
- Employees want good pay.
- Customers want quality and price.
- Suppliers want to be paid.
- The Community wants jobs and a clean environment.

The "Push and Pull": How Stakeholders Influence a Business

Stakeholders don't just sit back and watch; they can actually influence the decisions a business makes. This is called stakeholder influence.

How do they do it?

1. Customers: If they don't like what a business is doing, they can stop buying the products. This is the ultimate power! If sales drop, the business must change or it will fail.
2. Employees: If they are unhappy with pay or safety, they might go on strike or refuse to work overtime. This stops the business from producing goods.
3. Local Community: They can protest or write to local newspapers if a business is causing too much pollution. This ruins the reputation of the business.
4. Owners: They have the power to change the manager or change the direction of the business if they aren't making enough profit.

Did you know? Many big companies now have "Social Media Managers" specifically to keep customers and the local community happy, because one bad viral post can ruin a business's reputation in minutes!

Stakeholder Conflict: The Tug-of-War

This is a very important part of your exam! Stakeholder conflict happens because different groups want different things. What makes one group happy often makes another group angry.

Example 1: Raising Wages
- Employees are happy because their pay is maximised.
- Owners are unhappy because higher wages mean higher costs, which leads to lower profits and lower dividends for them.

Example 2: Expanding a Factory
- Owners and Employees are happy because it means more profit and more jobs.
- Local Community is unhappy because of the increased traffic, noise, and environmental impact.

Example 3: Lowering Prices
- Customers are happy because they save money.
- Owners might be unhappy because the business earns less money per sale, potentially lowering profit.

Key Takeaway: A business has to find a balance. If it only makes owners happy, employees might quit. If it only makes employees happy, the business might run out of money!

Common Mistakes to Avoid

1. Don't confuse "Stakeholder" with "Shareholder": A Shareholder is a type of stakeholder (they own part of the business). But a Stakeholder is the "big umbrella" term that includes everyone else (customers, workers, etc.).
2. Don't forget the environment: When discussing the local community, always mention environmental impact. It’s a key requirement for the AQA syllabus.

Summary Checklist

Before you move on, make sure you can:
- Define what a stakeholder is.
- List the main stakeholders (Owners, Employees, Customers, Suppliers, Local Community).
- Explain at least one objective for each group.
- Give an example of how stakeholder conflict happens in a real business.

Keep going! You're doing great. Stakeholders are just the first step in seeing how businesses interact with the real world.