People, groups or other organizations who have an interest, claim, or stake in an organization, in what it does, and in how well it performs. Organizations exist because of their ability to create valued goods and services which yield acceptable outcomes for various groups of stakeholders, people who have an interest, claim, or stake in the organization, in what it does, and in how well it performs. In general, stakeholders are motivated to participate in an organization if they receive inducements that exceed the value of the contributions they are required to make. Inducements are rewards such as money, power, the support of beliefs or values, and organizational status. Contributions are the skills, knowledge, and expertise that organizations require of their members during task performance. Shareholders
A company belongs to its shareholders, who have spent money and bought the shares of the company. There is a direct relationship between their investments and the financial stability of the company. The better the company's position, the more money they are paid. There are two types of shares: preference shares and equity shares. Both classes of shares are paid after the company has met its obligations such as paying creditors and providing for taxes, depreciation and amortization. Preference shareholders are paid a fixed rate of dividend before equity shareholders. Equity shareholders get to share the surplus profits. Shareholders are the owners of the organization, and, as such, their claim on organizational resources is often considered superior to the claims of other inside stakeholders. The shareholders’ contribution to the organization is to invest money in it by buying the organization’s shares or stock. The shareholders’ inducement to invest is the prospective money they can earn on their investment in the form of dividends and increases in the price of the stock they have purchased. Investment in stock is risky, however, because there is...
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