Sunday, August 31, 2008

Stock

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Dr NJ Ganesh said...

shareholder and stakeholder

A stockholder or shareholder is the holder or owner of stock in a corporation.

A stakeholder is anyone that has an interest or is affected by a corporation. In other words, the stockholder isn’t the only party having a stake in the corporation. Other stakeholders in a corporation include the employees, the employees’ families, suppliers, customers, community, and others.

Some organizations do not have stockholders, but have stakeholders. For example, the state university doesn’t have stockholders, but it has many stakeholders: students, the students’ families, professors, administrators, employers, state taxpayers, the local community, the state community, society in general, custodians, suppliers, etc.

Detail ANS

The main stakeholders are:

Shareholders (not for a sole trader or partnership though) – they will be interested in their dividends and capital growth of their shares.

Management and employees – they may also be shareholders – they will be interested in their job security, prospects and pay.

Customers and suppliers.

Banks and other financial organisations lending money to the business.

Government – especially the Inland Revenue and the Customs and Excise who will be collecting tax from them.

Trade Unions – who will represent the interests of the workers.

Pressure Groups – who are interested in whether the business is acting appropriately towards their area of interest.

Stakeholders versus Shareholders

It is important to distinguish between a STAKEHOLDER and a SHAREHOLDER. They sound the same – but the difference is crucial!

Shareholders hold shares in the company – that is they own part of it.

Stakeholders have an interest in the company but do not own it (unless they are shareholders).

Often the aims and objectives of the stakeholders are not the same as shareholders and they come into conflict.

The conflict often arises because while shareholders want short-term profits, the other stakeholders’ desires tend to cost money and reduce profits. The owners often have to balance their own wishes against those of the other stakeholders or risk losing their ability to generate future profits (e.g. the workers may go on strike or the customers refuse to buy the company’s products).

September 27, 2008 at 9:51 PM
Dr NJ Ganesh said...

internal and external stakeholders

Internal Stakeholders own or work with the business include owners of the business, customers, suppliers, employees, and so forth. External stakeholders do not own or work with the business, but still have an interest in the business. They include: the press/media, local governments, local communities, and public authorities, debt holders/creditors (i.e. a bank, if the business has a loan taken out)

May 22, 2009 at 5:38 AM

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