Conflicting interests of stakeholders
Different stakeholders have different objectives. The interests of different stakeholder groups can conflict. For example:
- owners generally seek high profits and so may be reluctant to see the business pay high wages to staff
- a business decision to move production overseas may reduce staff costs. It will therefore benefit owners but work against the interests of existing staff who will lose their jobs. Customers also suffer if they receive a poorer service
- managers may want to pay for goods later to improve cash flow whereas the suppliers will want their payment as soon as possible
- managers want the highest profit possible on sales whereas customers want low prices for high quality goods
Interdependence of stakeholder
Employees want fair wages and good working conditions while some owners might be more interested making profit
A stakeholder is someone who has an interest in the success of the business. All stakeholders want the business to succeed and are dependent on each other to make this happen. For example:
- managers need suppliers to provide them with high quality stock when required and suppliers need managers to buy supplies from them to keep them in business
- owners need employees to work hard for them to help satisfy customers and increase sales and employees need owners to provide them with fair wages and good working conditions
- customers need owners to provide them with the goods and services they require, and owners need customers to buy their products