Stakeholders
Class 10
Meaning of Stakeholders
The term 'Stakeholders' has developed from the word 'stake' which means an interest or expected benefits.
Definition of Stakeholders Stakeholders are all those individuals, groups and institutions which have a stake in the functioning and performance of a commercial organisation or a business enterprise.
Distinction between Stakeholders and Shareholders
The term 'Stakeholders' has developed from the word 'stake' which means an interest or expected benefits.
Definition of Stakeholders
Distinction between Stakeholders and Shareholders
Stakeholders is a much wider term than shareholders. In a joint stock company, the persons and groups who own the shares of the company are known as shareholders. They contribute the company's share capital and assume the risk of loss. In addition to shareholders, customers, creditors, employees, Government and others also have a stake in the company. These are all known as stakeholders.
Types of Stakeholders
Internal Stakeholders
Stakeholders who are involved in the business firms from within the organisation are known as Internal Stakeholders
Eg:- Employees, Employers, Shareholders
External Stakeholders
Stakeholders who are contributing to the business enterprise from outside the organisation are known as external stakeholders.
Eg:- creditors, suppliers, dealers, competitors, Government, local community, media and the society.
Primary Stakeholders
Stakeholders who have frequent and closer interactions with the company.
Eg :- Owners, employees, creditors, dealers, suppliers and competitors.
Secondary Stakeholders
Stakeholders who have less frequent and less closer interactions with the company.
Eg:- Government, media, local community and general public.
Expectations of Stakeholders
Employers, Shareholders and Managers
1. Safety of capital contributed by them.
2. regular dividend
3. rise in share price (Capital Appreciation)
4. true and up to date information about the financial health of the company.
5. good public image.
6. participation in policy decisions.
Employees
1. Security of job
2. fair remuneration
3. safe and comfortable working condition.
4. welfare facilities (housing, medical, pension)
5. careeer growth
6. opportunity for education.
Suppliers
1. Fair price for supplies
2. regular and timely payment
3. regular orders.
4. know the correct financial health.
5. healthy relationship.
Government
1. follow the laws.
2. pay taxes regularly & on time.
3. avoid corrupting government officials.
4. proper use of scare resources
5. solve national problems like unemployment, poverty, unbalanced regional growth.
6. avoid monopoly and concentration of economic power.
Customers
1. fair price
2. quality of the product
3. customer care services.
4. cash receipt.
5. guarantee and warranty
6. after sales services.
Board of Directors
1. good remuneration
2. freedom to manage
3. dignity of position
4. resonable tenure
Associates of Competitors
1. fair trade practices
2. regarding price, quality
3. atmosphere of healthy competition & ethical behaviour
4. coorporation among competitors to ensure a growth of entire industry.
5. respect to intellectual property rights
Creditors
1. regular payment of interest at the specified times.
2. safety of loan.
3. correct information about the financial health of the business.
4. security in the form of mortage of assets.
Society
1. protection from pollution.
2. desirable products to the society,
3. perform corporate social responsibility.
4. respect human rights including rights of women and children.
5. preserve social and culture value.
6. standard of living improvement
7. to donate funds for charitable and public welfare activities.
Types of Stakeholders
Internal Stakeholders
Stakeholders who are involved in the business firms from within the organisation are known as Internal Stakeholders
Eg:- Employees, Employers, Shareholders
External Stakeholders
Stakeholders who are contributing to the business enterprise from outside the organisation are known as external stakeholders.
Eg:- creditors, suppliers, dealers, competitors, Government, local community, media and the society.
Primary Stakeholders
Stakeholders who have frequent and closer interactions with the company.
Eg :- Owners, employees, creditors, dealers, suppliers and competitors.
Secondary Stakeholders
Stakeholders who have less frequent and less closer interactions with the company.
Eg:- Government, media, local community and general public.
Expectations of Stakeholders
Employers, Shareholders and Managers
1. Safety of capital contributed by them.
2. regular dividend
3. rise in share price (Capital Appreciation)
4. true and up to date information about the financial health of the company.
5. good public image.
6. participation in policy decisions.
Employees
1. Security of job
2. fair remuneration
3. safe and comfortable working condition.
4. welfare facilities (housing, medical, pension)
5. careeer growth
6. opportunity for education.
Suppliers
1. Fair price for supplies
2. regular and timely payment
3. regular orders.
4. know the correct financial health.
5. healthy relationship.
Government
1. follow the laws.
2. pay taxes regularly & on time.
3. avoid corrupting government officials.
4. proper use of scare resources
5. solve national problems like unemployment, poverty, unbalanced regional growth.
6. avoid monopoly and concentration of economic power.
Customers
1. fair price
2. quality of the product
3. customer care services.
4. cash receipt.
5. guarantee and warranty
6. after sales services.
Board of Directors
1. good remuneration
2. freedom to manage
3. dignity of position
4. resonable tenure
Associates of Competitors
1. fair trade practices
2. regarding price, quality
3. atmosphere of healthy competition & ethical behaviour
4. coorporation among competitors to ensure a growth of entire industry.
5. respect to intellectual property rights
Creditors
1. regular payment of interest at the specified times.
2. safety of loan.
3. correct information about the financial health of the business.
4. security in the form of mortage of assets.
Society
1. protection from pollution.
2. desirable products to the society,
3. perform corporate social responsibility.
4. respect human rights including rights of women and children.
5. preserve social and culture value.
6. standard of living improvement
7. to donate funds for charitable and public welfare activities.