Business Stakeholders Essay
Richer Sounds is a very successful business, which sells different types of TV’s, hi-fi systems and much more. Richer Sounds is owned by Julian Richer. Julian Richer opened his first store at London Bridge when he was 19. Today they have over 50 shops across England, but unfortunately none on the Isle of Wight. Last year Richer Sounds sold over i?? 100 million worth of equipment. In 2002, Richer Sounds was listed as being the top British-owned company in the official list of the UK’s 100 Best Companies to work for.
They employ nearly 400 people over their 50 stores in England. Richer Sounds’ Collegues: Richer Sounds colleagues are just as important as their customers because they couldn’t run the business without them. Richer Sounds’ Owner: Julian Richer has the interests of Richer Sounds at heart today just as much as he did when he started the company! He is their sole shareholder, which means they don’t have to worry about pleasing other external shareholders.
They can concentrate on keeping their prices competitive for the customers and paying good salaries to the colleagues – rather than allocating part of their profits for external shareholders. Richer Sounds’ Suppliers: Richer Sounds Purchasing department would
Need essay sample on "Business Stakeholders"? We will write a custom essay sample specifically for you for only $ 13.90/page
Richer Sounds’ Third-Party Distribution Company: This company is called Two-Way. It operates the warehouse we use. Two-Way drivers also distribute stock from the warehouse to the stores. The fact that we have a close relationship with Two-Way and use one organisation to do this work has benefits for both Richer Sounds and for Two-Way. Richer Sound’ Financier: Richer Sounds main financier is their bank. They have a bank overdraft and also have bank loans, which are listed in their business accounts. Over the years they have developed a close relationship with their bank manager.
This is important. It is always helpful if a bank manager understands how a business operates and the type of problems or difficulties which might occur – and why. The bank is also far more likely to support a business during any difficult times if it is confident that the business is financially sound and well run. The Community: Every year, Richer Sounds give away 5% of their profits to charity through their charitable foundation, Persula, which they set up in 1994. Julian Richer, David Robinson and three other people not connected with their retail business are the trustees.
This means they are responsible for overseeing the financial aspects of the Foundation and fulfilling their legal responsibilities as trustees. I agree with where Richer Sounds have put the customers and their ‘collegues’ at the top but I feel the financiers are more important than the suppliers because without the money from the financiers there is nothing to pay the suppliers with. I also agree with having the sole shareholder, Julian Richer, near the top because without his money and his guidance the company would collapse.
I have also put the community at the bottom because although it matters about a good image but people who have already shopped at the store will know about their employees kindness etc. Stakeholder Conflicts Due to the demands placed on businesses by so many different stakeholders, it is no surprise that there are often disagreements and conflict between the different groups. Some of the more common areas of conflict are: Shareholders and management: Profit maximisation is often the over-riding objective of shareholders – resulting in large dividend payments for them.
However, it is far more likely that the managers of the business will aim to profit satisfy rather than profit maximise (that is, they will aim to earn a satisfactory level of profits, and then use the remaining resources to pursue other objectives such as diversification and growth). This conflict between these two groups is often referred to as divorce of ownership (the shareholders) and control (the management). Customers and the business: Customers are unlikely to remain loyal and repeat purchase from the business if the product that the have purchased is of poor quality and/or is poor value for money.
More customers are prepared to complain about the quality of products and after-sales service than ever before, and the business must ensure that it has in place a number of strategies designed to satisfy the disgruntled customer, reimburse any financial loss that they may have incurred and persuade them to remain loyal to the business. Suppliers and the business: Suppliers are often quoted as complaining about the lack of prompt payments from businesses for deliveries of raw materials, and if this became a regular problem then the suppliers may well refuse credit to the businesses or may even cease all dealings with them.
On the other hand, many businesses have been known to complain about the late deliveries of raw materials and components from suppliers, and the dubious quality of the parts once they have been inspected. The community and the business: As outlined previously, the local community can often suffer at the hands of a large company through the negative externalities of pollution, noise, congestion and the building of new factories in areas of outstanding beauty.
However, if the business faces strong protests from residents and from pressure groups concerned about its actions, then it may decide to relocate to another area, causing much unemployment and a fall in investment in the community it leaves behind. Richer Sounds Conflicting Interests Customers and the Business: The customers of Richer Sounds and the actual company will have conflicting interests because the business is looking to put prices up all the time, and if they do this the customers will not be happy and might shop somewhere else, therefore Richer Sounds lose profit anyway.