Jeff Bezos leads Amazon with the vision of “Work hard, Have fun and Make history”. “Three big ideas were invented by the company of Amazon. Put the customer first, Invent and Be patient”.
A person or party that has interest in the company and can have a great influence or impact on business of the company are known as stakeholders. A stakeholder is very important part of a company or corporation as it helps in providing necessary materials and resources and even provides financial assistance for generation of profit in the company. There are many factors that determine the environment of business in both direct and indirect way. Stakeholders are an essential part of every organisation as the activities of company are majorly affected with their contribution or participation in it. The main or primary stakeholders in a company are investors, suppliers, employees and customers.
The key stakeholders of Amazon are investors of amazon with their directors, owners, employees, associates, third party sellers and the community from where business is derived. The most important stakeholder at Amazon are its Customers as highest priority is given to them in order to abide by the corporate social responsibility of the company. The company dedicates its success to customers in rapid growth of their e-commerce business, due to very important participation and contribution of their stakeholders.
Students can learn about the functioning of a company while doing business with its main operational function of investment through stakeholders. Stakeholders are classified into two categories such as Internal Stakeholders and External Stakeholders.
Internal Stakeholders
The person or parties that are functioning within the organisation refers to Internal Stakeholders. They are those individual, group or parties that functions or operates the management of the company. Internal stakeholders are also known as Primary stakeholders. The success or failure of the company can highly influence the activity of stakeholder in the corporation or entity. They invest a major part of interest for the development of the company which leads them to be majorly affected by any business activity of the company. The main internal stakeholders in Amazon are directors as officers, employees and shareholders. The top officers at Amazon are President, CEO, Chairman of the board, Senior vice president, CEOs of web services of Amazon and worldwide consumers.
The activities of the company including their performance, decisions, profitability majorly influence the stakeholders as they have highly invested in the company. The services to the company are provided by Internal stakeholders. It is very difficult for an organisation to survive without the participation of a stakeholder. A company cannot sustain for a long time without the contribution or assistance of stakeholder.
Internal stakeholders deal with the most confidential information and internal matters of the company. A corporation or entity consists of various kinds of internal stakeholders which are mentioned below:
- Board of Directors: An authoritative body that operates and governs the entire corporation. They are a group of persons that holds the authoritative power to run and manage the entire company. The members of the company elect the Board of Directors through Annual General Meeting (AGM) held in the company.
- Managers: The management of a company is done by a person who is known as Manager. There are various departments in a company and it is impossible to observe the activities of every department, therefore Managers are appointed to look after and manage different departments. Example– General Manager, Sales Manager, etc.
- Owners: A person or individual who solely owns the company or entity is known as Owner. Partners, Shareholders of a company can also be the owners of a company.
- Investors: A person or group of people who invests their money or shares in the company are known as investors. They are the very important part of any organisation as the provide financial assistance to the company.
- Employees: A group of individuals who work for the growth and development of the company in exchange of monetary benefit are known as Employees. The consistent participation of the employees leads to the progress of company by shaping its bright future.
External Stakeholders
The person or parties that are outside of the company and get affected by the business activities of the company refers to External Stakeholders. They are outside parties who are not a part of the company but get affected by the functioning or activities of the company. External stakeholders are also known as Secondary Stakeholders. The performance, profitability and liquidity are used by the external stakeholders by acquiring the financial information of the company. Amazon has a number of external stakeholders such as online sellers, local communities, competitors and the government.
They do not take interest in the internal matters and daily activities of the company but are highly influenced by its activities. The external matters of the company are dealt by them without interfering in the internal matters of the company. There are various kinds of external stakeholders which are mentioned below:
- Government: The rules and regulations framed by the government enables the operational functioning of a company. The payment of taxes and duties levied on the company are operated by the regulations authorised by the government.
- Customers: An individual or group of individuals who consumes the product are known as customers and are also considered as King of business as they help to increase and generate profit for a company.
- Suppliers: The raw materials, equipment’s are provided with the help of Suppliers as they provide input to the company. The supply of such raw materials is done by person who is known as supplier.
- Creditors: A person or group of people who provides funds or financial aid to the organisation are known as creditors. Banks or financial institutions or units also serve as creditors for the company.
- Society: The use of products, materials or resources is done by a group of individuals who live in the society and represents the economy of a company.
- Intermediaries: The link between the company and customers is created with the help of marketing channels, such as distributors, retailers, wholesaler etc.
- Clients: They are people to whom the products and services of the company are provided.
- Competitors: They are anti parties who competes with a company in order to more advanced and forward than the company who provides similar products and services.
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FAQ’s
1. What is the main difference between internal and external stakeholders?
A group of persons who manages and operates the internal functioning of the company are known as Internal Stakeholders. Individuals who do not function for the company but are affected by the activities of the company are known as External stakeholders.
2. What are primary and secondary stakeholders?
Individuals who have direct interest in the organisation are known as Primary stakeholders. One who has indirect association or benefit from the company are known as Secondary stakeholders.
3. Who is the most important stakeholder?
Owners/Shareholders are the most important stakeholder in any organisation as they control and lead the business of the company in an authoritative way.
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