Updated July 27, 2023
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 interested in the company’s business and its financial position.
Examples of Stakeholder
The following examples of stakeholders are as follows:
1. Investors
Investors are the owners of the company. They are 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, thereby reducing the share price of the company. Investors should always have updates about the finances of the company.
2. Creditors
Creditors can be traditional banks or financial institutions who have to lend money to the Company. As such, creditors can include retail investors who have purchased the company’s commercial papers and debt securities. Suppliers of goods can also be creditors, as the company might owe them the cost of the material. All these interest parties are stakeholders of the company because they have an interest in the financial position of the company. If the company, by any chance, goes into 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, they usually take a big haircut in the process.
3. Employees
The employees of the company are other key stakeholders of the business. They are the ones who make decisions and run the operations of the company. They invest their time, knowledge, and experience to run the business for which they get their salaries. Employees include senior managers, mid-level management, and entry-level employees responsible for the company’s day-to-day operations. 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.
4. Customers
Customers are important stakeholders to the company because they provide business to it. Businesses tend to find opportunities and analyze the demand for products. They build and manufacture products that 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 in the manufacturing units. These unions help maintain the labor laws and ensure that 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 company’s key stakeholders.
6. Government and Taxation Department
Government agencies like the taxation department, excise, and customs duty agencies would like the company’s economic activity to go on without any concern. They get taxes from these companies, which are used for building roads, railways, and other infrastructure of the nation. Thus, these government agencies are also a stakeholder of the Company.
7. Suppliers
Suppliers of raw materials provide initial goods, which help manufacture a finished product. Hence, they are also a stakeholder in a company’s business, as without the raw material, the Company may not produce its finished product, which it has to sell to the customers.
8. Community
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 who are impacted by the company, its business performance, and its financial health. The above examples provide the role of the stakeholders and how the company impacts them.
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