How do stakeholders influence a business

Local and trade media are more likely to give a business favorable media coverage if that business buys advertising, provides information and sources for articles and supports local charities.

Suppliers might give a business better prices if the business agrees to exclusivity with that supplier, quick turnaround on invoices or is flexible with delivery times. Customers might leave a business associated with a celebrity who behaves badly, so companies who use celebrity endorsements often have a morals clause in the contract.

The threat of stockholders ousting board members or dumping stocks, driving down their value, directly affects management decisions, such as whether to use excess cash to take a chance on a new product or business purchase, pay a dividend or reduce debt. Sam Ashe-Edmunds has been writing and lecturing for decades. Reveal answer up. Shareholders and owners. Owners have the most impact, as they make decisions about the activities of the business and provide funding to enable it to start up and grow.

Employees may have a limited amount of influence on business decisions. Customers buy products and services and give feedback to businesses on how to improve them. Suppliers can have a significant impact on a business if there are any changes in the quality of the goods they supply or the reliability of their deliveries.

Examples of external stakeholders are customers, suppliers, creditors, the local community, society, and the government.

Customers want the business to produce quality products at reasonable prices. Shareholders have an interest in business operations since they are counting on the business to remain profitable and provide a return on their investment in the business. Creditors that supply financial capital, raw materials, and services to the business want to be paid on time and in full. Federal, state, and local governments need businesses to thrive in order to pay taxes that support government services such as education, police, and fire protection.

The local community has a stake in the business because it provides jobs, which generate economic activity within the community. Society as a whole as well as the local community is concerned about the impact that business operations have on the environment in terms of noise, air, and water pollution. For example, if long-term customers are late with their payments because they are struggling, you might eliminate interest charges and late fees and let them work out a payment plan.

This will change your cash flow projections, but might help you keep an important customer. Many organizations use customer relationship management, a data-driven business marketing process whereby companies collect data on customers for more targeted and efficient marketing and sales efforts. Businesses must also make employee recruitment and retention a focus of their business operations.

Treating employees as valued assets, promoting a nondiscriminatory work environment and actively involving employees in important decisions are examples of how these stakeholder influence a business, according to job and career website Indeed.

You'll reduce your profits by increasing workplace safety, wages and benefits, but will keep your workers happy and your business stronger.