Who stakeholders are, what they want, how they influence businesses, and how conflicting interests are managed.
A stakeholder is any individual or group that has an interest in a business — either because they are affected by its decisions, or because they can affect the business. Stakeholders are divided into internal (inside the business) and external (outside the business).
| Type | Who | Main Interest |
|---|---|---|
| Internal | Owners / shareholders | Profit and growth |
| Internal | Employees | Good pay, job security, working conditions |
| Internal | Managers | Bonuses, status, meeting targets |
| External | Customers | Value for money, quality, good service |
| External | Suppliers | Reliable orders, prompt payment |
| External | Government | Tax revenue, employment, legal compliance |
| External | Local community | Jobs, environment, minimal disruption |
| External | Pressure groups | Ethical behaviour, environmental impact |
Stakeholders can influence business decisions through their spending, labour, investment, or campaigning. A business that ignores its stakeholders risks losing customers, staff, or its reputation. In return, a business that manages stakeholders well builds loyalty and long-term success.
Internal stakeholders work within the business and are directly affected by its day-to-day decisions.
What they want: Profit, dividends, capital growth, and business survival.
Influence: They make or approve major strategic decisions. In limited companies, shareholders can vote to remove directors.
What they want: Fair pay, job security, good working conditions, and opportunities for development.
Influence: They can strike, resign, or reduce productivity if unhappy. High turnover is costly for businesses.
What they want: Performance bonuses, authority, and career progression.
Influence: They implement strategy and can shape culture and operations significantly.
External stakeholders are outside the business but can be significantly affected by — and can significantly affect — its decisions.
What they want: Quality products, fair prices, good customer service, and safe products.
Influence: They vote with their wallets. Poor reviews and social media complaints can cause reputational damage.
What they want: Regular orders, prompt payment, and long-term contracts.
Influence: They can increase prices, refuse to supply, or prioritise other customers if the relationship sours.
What they want: Tax revenue, employment, legal compliance, and economic contribution.
Influence: Can impose fines, regulations, taxes, or shut down businesses that break the law.
What they want: Jobs, minimal environmental impact, low noise/traffic, and community investment.
Influence: Can object to planning applications, campaign against the business, or provide (or withhold) local workforce.
What they want: Ethical behaviour, environmental responsibility, fair treatment of workers.
Influence: Can organise boycotts, protest, lobby government, and generate negative press coverage.
Different stakeholders often want different things, which can lead to conflict. A business must try to balance these competing interests.
| Conflict | Why It Arises | Example |
|---|---|---|
| Owners vs Employees | Owners want to cut costs; employees want higher wages | A business freezes pay to increase profit margins |
| Owners vs Community | Owners want to expand; community worries about noise/traffic | A factory wants to build a larger warehouse |
| Customers vs Shareholders | Customers want lower prices; shareholders want higher profit | A supermarket raises prices to improve margins |
| Employees vs Community | Workers want job security; community wants environmental protection | A polluting factory where locals work |
| Government vs Shareholders | Government imposes regulations; shareholders see profits cut | New minimum wage legislation increases costs |
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