Definition of Stakeholder
A stakeholder is an individual or an organization that has an interest in a Company or a business. The following provides various examples of stakeholders that have an interest in the business of the Company and its financial position.
Examples of Stakeholder
The following examples of Stakeholders are as follows:
Investors are the owners of the Company. They are first and the key stakeholders of the Company as they have invested in the Company and would like to get good returns on their investment. If the investors feel they have better return opportunities elsewhere they will pull out of the Company and thereby reducing the share price of the Company. Investors should be always updated with the financials of the Company.
Creditors can be traditional banks or financial institutions who have to lend money to the Company. Creditors can include the retail investors who have purchased the commercial papers and debt securities of the Company. Suppliers of goods can also be the creditors as the Company might owe them the cost of the material. These all interest parties are stakeholders of the Company as they have an interest in the financial position of the Company. If the Company by any chance goes for bankruptcy the creditors may find it difficult and time-consuming to get their money back. Although, they have the first right after the Company winds out, however, usually they take a big haircut in the process.
The Employees of the Company are other key stakeholders of the business. They are the ones who take decisions and run the operations of the Company. They invest their time, knowledge and experience to run the business for which they are paid salaries. Employees include the senior managers, mid-level management and entry-level employees who are responsible for the day to day operations of the Company. Even the interns and part-time employees hired by the Company are stakeholders in the Company as their work does impact the Company at some point in time.
Customers provide business to the Company hence an important stakeholder for the Company. Businesses tend to find opportunities and analyze the demand for products. They build and manufacture products which the customers need and can solve their day to day problems. Customers buy the Company’s products by which revenue and profit are generated.
5. Trade Unions
A trade union is an association of the workers employed by the Company who work in the manufacturing units. These unions are basically created so that the labor laws are maintained and the management does not take undue advantage of their position. The workers of the Company work at extreme conditions in the case of manufacturing companies and are the key persons involved in the production of goods. Thus, the workers and their association i.e. the trade unions are the key stakeholders of the Company.
6. Government and Taxation Department
Government agencies like the taxation department, excise, and customs duty agencies would like the economic activity of the Company to go on without any concern. They get taxes from these Companies which is used for building roads, railways, and other infrastructure of the nation. Thus, these government agencies are also a stakeholder of the Company.
Suppliers of raw materials provide initial goods that are used to manufacture a finished product. Hence, they are also a stakeholder in the business of a Company as without the raw material the Company may not produce its finished product which it has to sell to the customers.
Businesses affect the community and the environment at large. The people living around the major manufacturing units of the Company are affected and hence they also become a stakeholder of the Company. The Company takes initiatives so that it does not harm the peaceful living of the community and saves the surrounding environment from any harm. Further, due to economic activity in the region, the community gains from job opportunities and other trade-related opportunities.
Conclusion – Stakeholders Example
Stakeholders are the ones which are impacted by the Company, its business performance, and financial health. The above examples provide the role of the stakeholders and how they are impacted by the Company.
This has been a guide to Stakeholder’ examples. Here we have discussed the top 8 examples of Stakeholders along with a detailed explanation. You can also go through our other suggested articles to learn more –