Stakeholders in Business

Stakeholders in Business

Introduction

• Businesses rely on many groups of people to operate.
• These groups are called stakeholders.
• Stakeholders can be internal (inside the business) or external (outside but affected by it).

Internal Stakeholders

• Business Owner/Entrepreneur
  • Role: Identifies opportunities, takes risks, secures funding, and leads the business.
  • Needs/Wants: Profit, recognition, independence, success.
  • Example: Shane Curran (Evervault, raised €3m at age 19).
• Managers
  • Role: Set objectives, organise resources, motivate staff.
    • Needs/Wants: Resources, recognition, career growth.
  • Example: Anne O’Leary – Meta Ireland CEO.
• Employees
  • Role: Work daily to produce goods/services, bring skills and ideas.
  • Needs/Wants: Fair pay, good conditions, respect, career development.
  • Example: Retail assistants in a busy shop.
• Investors
  • Role: Provide funding in return for equity (ownership) or debt (loans).
  • Needs/Wants: Return on investment, dividends, reduced risk over time.
  • Example: Enterprise Ireland or venture capital firms.

External Stakeholders

• Consumers
  • Role: Buy goods/services, give feedback, promote brand.
  • Needs/Wants: Value for money, quality, ethical/sustainable practices.
  • Example: Patagonia customers support its eco-friendly values.
• Local Community
  • Role: Provides customers and employees, affected by business presence.
  • Needs/Wants: Jobs, services, environmental care.
• Suppliers
  • Role: Provide raw materials or services.
  • Needs/Wants: Timely payments, long-term contracts.
  • Example: McDonald’s uses 100% Irish beef.
• Government
  • Role: Regulates businesses, provides grants/training, promotes exports.
  • Needs/Wants: Taxes, compliance with laws, job creation, economic growth.
• Interest Groups (Pressure Groups)
  • Role: Represent members’ views, lobby government, influence decisions.
  • Needs/Wants: Policy changes, ethical standards, favourable conditions.
  • Example: Small Firms Association lobbying for cost supports (2024).

Stakeholder Relationships

Cooperative (Win-Win)

• Both parties benefit.
• Examples:

o Employer & Employee → training = skilled staff + better pay chances. o Investor & Business Owner → funding creates profit for both. o Producers cooperating (e.g. cheese festival promotion).

Competitive (Win-Lose)

• One gains, the other loses.
• Examples:

o Employer vs Employee → pay cuts vs pay rises. o Investor vs Manager → dividends vs reinvestment. o Supplier vs Manager → faster payment vs delayed payment.

Conflict Avoidance & Resolution

Avoiding Conflict

• Open Communication (honest feedback, fair complaint handling).
• Corporate Social Responsibility (CSR) (ethical actions, fair pricing).
• Stakeholder Involvement (consulting communities/customers).

Resolving Conflict

• Meet & Talk → direct discussion.
• Negotiation/Bargaining → compromise (e.g. trial work week).
• Mediation → neutral facilitator helps find middle ground.
• Conciliation → third party suggests options, but decision lies with stakeholders.
• Arbitration → independent arbitrator decides, both sides agree to accept outcome.

Stakeholder Mapping

Steps:

• Identify stakeholders (internal & external).
• Analyse their power & interest.
• Place on Power–Interest Grid.
• Allocate resources & communication strategies.

Example – AIB Branch Closures

• Customers (elderly, rural): High interest, low power.
• Local community: High interest, low power.
• Employees: High interest, medium power.
• Government/regulators: High power, high interest.

Importance:

• Improves decision-making by considering all views.
• Helps long-term planning (which stakeholders to prioritise).
• Example: AIB may delay closures after recognising high impact on elderly customers.

Learning objectives