STARTER

Stak eholder
s - - - - - - - - - - - - are the people or groups with an
Organisation
interest in the success or failure of an - - - - - - - - -
- -. a business will want to look after those who
can help it succeed, which might include the press
Primary
or the government. These are - - - - - - -
shareholders ,there may also be outsiders who
think of themselves as stakeholders, Whether or
not the organisationSwants econdary
them to. These are the
- - - - - - - - - stakeholders. For example , animal
Crights
o n c e ractivists
ned might become
- - - - - - - - - - at the way a cosmetics business
tests new products on animals.
secondary Stakeholder organisation primary concerned
s
WHAT ARE STAKE HOLDERS?

• Stakeholders are the people or groups with an

interest in the success or failure of an
organisation.
• Stakeholders can affect or be affected by the
organization's actions, objectives and policies.
• Some examples of key stakeholders are creditors,
directors, employees, government (and its
agencies), owners (shareholders), suppliers and
unions
Not all stakeholders are equal. Some
stakeholders are less important to a business
than others. The business would class them as
either ;

Primary stakeholders
or
Secondary stakeholders
PRIMARY STAKEHOLDERS

People or groups seen by the business to

be vital to the organisation’s success or
failure.
• For a restaurant a supplier may be
considered a primary stakeholder ,
as it’s entire reputation depends
upon the quality of the food from
the supplier.
GREGGS AND IT’S PRIMARY
STAKEHOLDERS

Greggs believe its two key stakeholders

are its customers and staff .It places it ‘s
share holders in third place, on the grounds
that as long as staff and customers are
happy, the business will be ahowever
Cadburys financial
declares it’s main
success. priority is to maximise returns for its
shareholders.
KEY PRIMARY STAKE HOLDERS
For all organisations the key primary stake
holders are;
• The owners /shareholders
• The staff /managers
• The customers

Some also regard suppliers as key stakeholders

SECONDARY STAKEHOLDERS

People or groups who feel involved in the

organisation’s success or failure ,
whether or not the management agree.
EXAMPLES OF SECONDARY STAKEHOLDERS

• Local residents who may be affected by

traffic noise from deliveries or by pollution
from smelly or smoky factory or farm.
EXAMPLES OF SECONDARY STAKEHOLDERS

• Local government, the organisation who

will decide whether or not to allow future
planning permission on for a warehouse
for example.
EXAMPLES OF SECONDARY STAKEHOLDERS

Pressure groups, who may organise

protests if they disagree with the way a
business is run. For example
Greenpeace will protest if that believe an
organisation’s activities are damaging
the environment.
SMALL BUSINESS STAKEHOLDERS
For small businesses the keys to success
are customers, staff and suppliers.
Treating them well and using them well
are essential , this is partly because you
never know when you might need them
to help you.
The key stakeholder of a small business
is it’s staff , as the enthusiasm of well
motivated staff rubs off onto customers
and suppliers.
You are about to open a
restaurant in a small village
what are your primary and
secondary stakeholders?
PRIMARY OR SECONDARY?

Customers living in neighbouring

villages

primary
PRIMARY OR SECONDARY?

Local journalists looking to write an

article about the restaurant
opening

secondary
PRIMARY OR SECONDARY?

Local residents objecting to

increased traffic and parking
problems
secondary
PRIMARY OR SECONDARY?

Local farmers supplying meat,

vegetables and dairy to the
restaurant

primary
A restaurant opening in a small village

Primary stakeholders Secondary stakeholders

Customers living in Local journalists looking to

neighbouring villages
Local farmers supplying
meat, vegetables and dairy
to the restaurant
write an article about the
restaurant opening
Local residents objecting to
increased traffic and
parking problems
SHAREHOLDERS
Most public limited companies have little choice
but to treat shareholders as their most
important stakeholder. This is because
shareholders have the right to vote directors
out of office if they believe the business is
badly run.
British company law sets out that the primary duty
of company directors Is to the shareholder .
Therefore most companies will treat the
shareholders as the single most important
stakeholder.
CONCLUSION

Businesses need to think about their

public image and the issue of
stakeholders simply urges firms to think
more widely of the effects of their
business activities.