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Objectives

Stakeholders

3.1 Introduction to stakeholders

The decisions made by an entity's managers depend on the ultimate objectives of the
entity.

Entities often have many, sometimes conflicting, objectives as a consequence of
having many stakeholders with both long and short term goals.

3.2 Key stakeholders and their objectives

 Shareholders – require returns (dividends and/or capital growth).

 Employees/managers – require job security and pay increases.

 Customers – require good quality products/services and reasonable prices.

 Suppliers/lenders – require payment when due.

 Government – require taxes to be paid and laws to be followed.

 Local community – require considerate/responsible behaviour.

Conflicts will often arise between different stakeholder groups
(e.g. shareholders requiring dividends and employees requiring pay
rises).

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