In this following unit I shall be investigating people in business. The business I will be looking at will be Richer Sounds. Richer Sounds is an electronic retailer who specialise in selling all kinds of electronic goods from plasmas to DVD players. Richer Sounds is a PLC but unlike other Public Limited Companies, the majority shareholder who also created the business Julian Richer decided not to put the business on the stock exchange therefore members of the public cannot buy shares in Richer Sounds. There are two types of stakeholders; internal and external.
Internal stakeholders are people who are part of a business, including the owners themselves, managers and other employees. Internal stakeholders are directly affected by the activities of the business. External stakeholders in a business include suppliers, customers, communities, pressure groups, financiers and the government. These people have an interest in the business but are not part of it. All shareholders in a business are stakeholders. They may be internal or external stakeholders depending on whether or not they also work in the business.
Customers are really important stakeholders because they could either make or break a business. After all it is the customers’ money that is making the businesses profits and paying their employees wages so for that reason businesses have to keep their customers constantly satisfied otherwise they could just not shop there anymore and the business will lose out on a lot of capital. Employees ; Managers – Employees and managers are also very important in any business as they have the ability to influence many decisions made and also how effectively a business runs through how effectively they fulfil their job roles.
Employees can also influence a business by refusing to do their jobs at all for example if employees go on strike. Employees might strike if they feel they’ve been treated unfairly by their employer or to demand more pay or better working conditions. If employees aren’t treated in that sort of way then they have the right to resign and some businesses have to be very careful when getting rid of some employees because remunerating wastes a lot of time and money.
Managers share the same expectations as other employees, but will have additional concerns which come with their jobs such as a pressure to increase sales and cut production costs. As managers are often shareholders they will also be interested in making money on their shares. Suppliers – The suppliers also play a big part in any business as they provide goods and services to businesses. They rely on the business being successful so that it continues to place orders. A supplier will be interested in how well a business is doing so that if they give a month goods worth of credit that the business can pay them back the following month.
Suppliers are also very important to most businesses because without suppliers businesses would not be able to obtain the stock in order to sell it to their customers. And if a business isn’t providing their customers with what they desire then they will lose customers. Owners & Shareholders – All owners and shareholders of a business have invested money in the business, if the business is successful they will make money, if the business fails they will lose money. However, the nature of an owner’s stake in a business will vary depending on the type of owner they are.
The main reason why shareholders will be interested in any business that they may have shares in is the dividends they get in return for their investment. Also, the level of interest of most shareholders may differ as some shareholders may own more shares than other so their level of interest in the business therefore will be higher compared to shareholders with a only few shares. Customers – Customers are seen as the most important stakeholder groups in most businesses. This is because without the customers how will they make break even let alone making profit.