Internal and External Business Stakeholders Essay

In 1963 an internal memorandum issued at the Stanford Research Institute used the term â€Å"stakeholders† for the first time and defined the word as â€Å"those groups without whose support the organization would cease to exist†(Boundless, paragraph1). Now it generally includes anyone who has an interest or â€Å"stake† in a business or entity. There are two types of stakeholders: internal stakeholders, those within an organization that have an interest in the business, and external stakeholders, those with an interest in the business outside of an organization. Internal stakeholders include owners, employees, managers, and stockholders, those who are directly affected by the success or failure of a business’ decisions. The owners and stockholders are the ones who have the most to gain or lose depending on how the business fares in the market. They’re the ones who put their money into an idea to create the business and should it fail, they’d lose that investment. The managers and employees, similarly, would lose benefits, rewards, or even their jobs completely should it fail. Since these have the most to lose, they’re the one who work the hardest to make sure the business succeeds. External stakeholders, customers, creditors, suppliers, the government, etc., are also affected by the success of a business. If the business is doing well, the customer is able to get good quality products and/or services at sensible prices, creditors get paid back the loan they gave the business, and suppliers keep selling their products to the business, thus keeping them in business as well. When the business is up and running, stakeholders need to collaborate and each plays their own part with each other to keep the business successful. The owners and creditors need to supply the financial backing, the employees need to sell the products or services to the consumers with excellent customer service, the suppliers need to distribute and deliver their products promptly and professionally, and the customers need to continue to buy the products or services while providing constructive feedback. When these stakeholders interact without confusion or miscommunication, the business runs smoothly and they all gain something from working together. No matter what the business sells or provides, if there’s contact with any human being, and there always is, then there are by definition â€Å"stakeholders† in the company.  Without them, there would be no products or services offered to the consumer and there wouldn’t be a business in the first place. Source: Boundless. â€Å"Business Stakeholders: Internal and External.† Boundless Accounting. Boundless, 14 Nov. 2014. Retrieved 19 Jan. 2015 from https://www.boundless.com/accounting/textbooks/boundless-accounting-textbook/introduction-to-accounting-1/overview-of-key-elements-of-the-business-19/business-stakeholders-internal-and-external-117-6595/