Hi-Fella Insights

Business Stakeholders: What are They and How do They Influence a Business?

In the world of business, success isn’t just about making money and profit. It’s a team effort involving various people and groups called stakeholders. Now, what is a stakeholder in business? Stakeholder, especially in business, is any individual, group, or party that has an interest in an organization and the outcome of it.

Investors, employees, customers, and regulators are all business stakeholders. They care about what a company does and how a company does it. They also play a big role in deciding what a company aims for and whether it thrives.

What are key stakeholders in a business?

Essentially, every individual or group that is involved in a business are stakeholders. But the primary stakeholders in a company are employees, customers, suppliers, and investors. There are also two other stakeholders that are indirectly involved in a business namely governments and communities.

  1. Employees
    Employees have direct stakes to the company. They earn money and safety from the company who hires them and in return, the company gains income and profit for the products they sell.
  2. Customers
    Without customers, companies are nothing. They can’t sell their goods if they don’t have a buyer. Customers are also a stakeholder in a business. Their purchasing decisions, feedback, and demands can influence product development, pricing, and overall business focus.
  3. Suppliers
    Suppliers sell things or services that a company needs. They earn income because companies buy their goods and in return, they provide said companies with things they sell.
  4. Investors
    Investors provide companies with funding and capital so that business on the company can run smoothly.
  5. Governments
    Governments also play a big role in being a stakeholder. They collect taxes and make regulations that can be beneficial or not for the companies.
  6. Communities
    Communities are highly impacted by the companies. A company can make one small community in the area have jobs, impacting on incomes and spending in said area. Thus they impact on economic and environment development too.

Why should a business be concerned with business stakeholders?

The sole reason why a business should be concerned with stakeholders is stakeholders are the one who make business exist. Stakeholders are the ones who make business run. A company can’t run itself without them. A company needs employees. In order to sell something, they also need customers. When they want to make a product, they need suppliers to help them get raw materials. They also need investors to fund the company in order to buy raw materials from suppliers. A company needs the government for legal matters. They too need the communities to make their business running smoothly.

How can stakeholders influence a business?

Stakeholders can influence a business in a variety of ways. They often hold a significant power over the company’s decisions and operations. Their influence can impact strategic direction, decision-making processes, and even the overall success and reputation of the business. From the key stakeholders that are mentioned earlier, we can divide them into two types, internal and external. Now, how do the two of them influence a business?

How do internal stakeholders influence a business?

Internal stakeholders influence a business from the inside of the company. They influence its culture, strategic decisions, operations, and overall success. Effective communication, collaboration, and alignment among internal stakeholders are essential for achieving organizational goals and maintaining a healthy and thriving business.

  1. Employees
    Employees, including owners, managers, and other divisions in the company, influence the business by making important decisions, whether it is about investing money, hiring and firing employees, or increasing and decreasing the amount of work they do. That way they can influence the culture as well as the overall success of the company.
  2. Investors
    Investors provide funding and capital which is essential for a company’s growth and operation. They influence major decisions by voting on company matters and can push management to improve financial performance.

How do external stakeholders influence a business?

In contrast to internal stakeholders, external stakeholders influence a business from the outside of the company. They play a crucial role in shaping a business’s environment and influencing its decisions. Managing relationships and understanding the needs, expectations, and concerns of these external groups is essential for maintaining a successful and sustainable business.

  1. Customers
    Customers influence a business by increasing or decreasing the amount of product or service they buy from the company, thus resulting in increase or decrease in sales of a company.
  2. Governments
    Governments influence business by regulating taxes, environment, and workers. The regulation they make may affect how a company operates.
  3. Communities
    Community support or backlash can influence business decisions and public relations efforts. For example, when a company donates their income to an orphanage, the company will appear good and trustworthy in the eyes of communities. The community knows that the company does not only care about money, but also people around them.
  4. Suppliers
    Suppliers provide the company the raw materials for their products. Suppliers influence a business by increasing or decreasing the cost and the stock of the raw materials, thus making the company have a fluctuation with the products’ price.

We are all aware that customers and suppliers are considered as a stakeholder in a business. Now it’s time for you to elevate your business to new heights with Hi-Fella, a simple platform where buyer and supplier meet. Make Hi-Fella as one of the stakeholders to your business by just making an account and downloading the app. Come and join us!