IntroductionA stakeholder can be a person or a

IntroductionA stakeholder can be a person or a group of people who have an interest in the wellbeing of a business. They will be affected by the businesses activities in either a positive or a negative way. These groups can extend from suppliers to the creditors and the government. However, depending on the position these stakeholders can have different objectives and aims. They can be categorised into 2 groups to separate those who are a part of the business and those who are not; internal and external. Internal stakeholders are people within the business. For example employees and owners are a part of the business and work for the success of the business. External stakeholders are the people who are outside the business but have a general interest in the business. For example the government is not part of the business, but the business pays taxes to them. The most important stakeholders will be treated very well and would be supported by the owner, as they contribute at a great extent to the business.This is the list of stakeholder groups that I will be comparing to find which is the most important to the business I have chosen.Internal Stakeholders External StakeholdersShareholdersCustomersEmployeesGovernment ManagersSuppliersDesignersCompetitorsFor my investigations of stakeholders in a small business, I have chosen a small local shop called ‘The Cave’. A nearby business that sells modest clothes at a high price for high-quality products. I have chosen this business as it sells big brands such as ‘Yeezy’ and ‘Supreme’, which generates a lot of customers as a result. These customers are examples of external stakeholders. The business first opened two years ago on the 13th of May 2016, according to the owners all stakeholders are incredibly important to the business and have had big impact positively and negatively.The Cave is a private limited company therefore the owners of the company are the shareholders who are internal stakeholders that have had a big impact on the business. A private limited company are incorporated which lets them have their own legal identity. The company is divided into equal parts called shares and are given to the shareholders. The shareholders of The Cave have an advantage as they are not necessarily involved in running the business. They are one of the most important stakeholders in the business because they have the important role of handling finance such as profit. Although they are not completely involved in running the business they control different sectors and aspects which serves as a guide for the managers who are also internal stakeholders in the business. This also gives them a chance to be a part of the major decisions during some of the companies meetings. For example the shareholders of The Cave have elected a director to manage accounts and reports. Their presence helps make the company move and earn profit as they make decisions that can affect the business in multiple ways. In addition the shareholders invest money into the business but expect a share in the companies profits. The Cave depends on its shareholders to give funds and help the business grow as a whole. The shareholders at The Cave are rewarded by the profits made and have been given a share.However external stakeholder groups are very important for the success of a business, for example customers are crucial. Having good communication with the customers has benefited The Cave in many ways, it will spread the good reputation of the business helping it expand to other people and eventually give the business a good reputation within the community. The purpose of the business is to serve the customers, meeting their expectations and gaining customer satisfaction, this is important as it gives the owner a guide on how to improve and continually meet demand. Without customers there will be no one to pay for the products that the Cave offers, resulting in bankruptcy. As The Cave has only opened in 2016, It has built up it’s sales through customer satisfaction and now it is a very well known business in the community and quickly gained customers throughout the year of 2017, now in 2018 the business has started to gain new customers through social media. Being able to broadcast their products through social media accounts such a Instagram and Facebook, has made customers more aware of the business. It also helps the business connect with it’s customers which results in earning new customers.An example of an internal stakeholder group are the employees. They are affected by the businesses success and expect a salary for their services so they will be in a financially stable situation. They are very important to the business as they support and deliver the product or service to the customer. Without the help of employees, The Cave will suffer tremendously, antagonising the employees and by making them feel inadequate will lead to customer service collapsing. Resulting in reduced sales as well as ruin the good reputation of the business, and the customers will also suffer as they are receiving the bad service. On the other hand good employees work very hard and help the business improve as a whole, as they help run the business, make profit and help financially. Then the support will eventually raise productivity and efficiency. The employees are the face of The Cave which attracts customers as they are able to interact and communicate with them, making them very valuable stakeholders.The employees at The Cave get rewards such as discounts as a source of motivation which in turn improves their service and also inspires innovation among other employees. Which would result in more creative ideas and ways to sell products to customers and gain more profits.Nevertheless, the government plays an important part of the business. The government is an external stakeholder but can have a lot of negative impacts as well as positive. The government has an interest in competition and tax revenues. Most businesses including The Cave will take measures to avoid government intervention. However the government has an important role as they are responsible for managing the economy. The government has enforced a Monetary Policy which uses changes in interest rates to influence economic activity. This has an affect on The Cave because of the purchases of machinery, tools and equipment. This may also affect customers because people may want to save rather than spend money. However the higher interest rates could reduce demand for loans, as people would have more to pay back. Demand in the economy will fall, leading to less pressure on prices. By contrast more demand on the economy helps to create more jobs. The cave, will have to produce more to meet the demands of the economy creating more sales and profit. The government can increase demand by lowering interest rates and taxes for example. There is also another policy called the Fiscal Policy which lets the government use it’s taxation from businesses to achieve government aims. This has an impact on the Cave as taxes fluctuate according to the economy and can have various impacts such as higher tax demands from the government, leading to more money being spent on tax than improving The Cave for the benefit of the customers and workers. Context – Chosen Business