Explain the roles of both internal and external stakeholders in the selected business and show how their objectives and expectations have changed over time.
What is a Stakeholder?
A stakeholder is someone who is interested in a company or business, e.g. Tesco; they can either be an internal or external customer to the business. They may also be affected in a situation that happens to the company because they them selves may of given and invested money into the company or may just be interested in it and use it quite often. They can either have direct or indirect control of the business, internal usually being direct while external being indirect control of the business. Key stakeholders are those who draw in resources such as money and supplies to the business; these are the customers, employees, the government, suppliers and the community.
Although stakeholders are people that judge they to be stakeholders e.g. customers who are interested in the business classify themselves as stakeholders, different types of people and relations would have different types of values and considerations. Internal customers may have different considerations than external customers also. For example, a customer who is an external customer is entitled to customer services and good quality goods, while an employee who is and internal customer may have considerations such as their job security and good pay and promotions being available within the company.
Owners and Shareholders Internal
Both owners and shareholders are internal stakeholders to Tesco. As they are important to the company they may be given considerations and values than other people would not be given such as the dividends and profits.
Dividends is a disruption of Tesco’s profits. This is usually decided by the board of directors on how much they should be given or perhaps the law on how much they are entitled to. If an issue were to occur in the company, such as the company failing maybe because the companies they supply to now longer do not wish to purchase from them, the company may give dividends to share holders to ‘keep them happy’ and for them not to do anything that could also effect the company. For example, John Smith, a shareholder or an owner to the company owns 100 shares. Tesco announces that they will be giving people a 10 percent dividend at the end of the third quarter, meaning that John Smith will will be satisfied to know that he will receive an extra 10 shares on top of his others.
Over time, owners and Share Holders demand more and less of what they can receive as stake holders of Tesco. As times are now getting more difficult, the shareholders of the company may receive more dividends to keep them interested in the company while owners may demand more profits given to them and a larger share of the revenue Tesco receive at the end of each year.
Managers - Internal
Managers are also stakeholders in companies as well; these are internal stakeholders that focus on good staff, good pay, the reputation of Tesco and the meeting targets that the company has.
Managers are interested in staff that work for the supermarket in any department or job type they have. Managers would be interested in the work that their employees offer to Tesco so they may monitor and evaluate the work produced by each staff member. If they feel that some members of staff should have better customer service skills, they would talk to customer services and make the necessary arraignments for them to be trained on this. Managers would also hire and fire employees.
Managers are not only in charge on employee management but also on the pay they are given. Managers of companies often look and evaluate the wages that employees are being given by the company. If they feel that it is to low or to high for the employee then they, with other managers etc, have the right to change the wages given. It is important to make sure that all employees are being paid fairly...
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