The Impact & Influence of Stakeholders on Business
Business: Cambridge International GCSE (2027 Exams), topic 1.5.2
The Impact and Influence of Stakeholders on Businesses
The owners of the firm have the biggest impact because they make decisions about the aim(s) and objectives of the business. Different stakeholders can have different influences on a business:
Customers
- Customers are very important stakeholders of the firm and can have a large influence on a business.
- If customers’ needs and wants are changing over time then a business needs to be able to adapt in order to meet these.
Local community
- A local community may have less of an impact on how a firm operates.
- A multinational corporation, like Burberry in China, may not mind if a small local community in China does not like how they operate, because most of their sales happen elsewhere in the world.
- Similarly, mining companies or manufacturing companies may not worry about pollution created by their operations in developing countries where few people can afford to buy their produce.
Employees
- Keeping employees happy is also important as they determine a lot of the day-to-day running of the organisation. If they can keep employees happy then they will work more effectively.
Conflicts between stakeholders
- There may be conflict between maximising profits and being an environmentally friendly firm. Renewable energy sources can be better for a community but they may be more expensive than traditional energy sources such as oil, coal and gas.
- This might have been the case for Coca Cola in India, where some of their operations depleted the clean water supplies that were available to some small village communities.
Test yourself on The Impact & Influence of Stakeholders on Business
Which stakeholder usually has the biggest impact on a business?
In India, the operations of Coca Cola depleted the clean water supplies available to some small village communities nearby. This involved conflict between which stakeholders in particular?
Who is most likely to care if a small local community does not like how they operate?
Which stakeholder group can strongly influence a business if their needs and wants change over time?
Which of the following is an example of conflict between stakeholders?