Choose a business and identify the stakeholders - Investigate their rights and responsibilities.

Employees are important stakeholders within a company, since the company cannot operate without them, thus companies will strive to keep their employees satisfied. This will be done by motivating the staff, using the work of theorists such as Maslow as a guide. Tesco will offer staff the lowest wages possible, since wages are a context factor, so as long as there is a competitive wage there will be no dissatisfaction and Tesco will be able to motivate their staff though other means, such as a prosperous career ladder, thus allowing staff to reach self actualisation, which will benefit Tesco since, motivated staff perform better, which will satisfy their other stakeholders such as the customers, since they will offer them a better service, and with there being very little between each supermarket, the best customer service will prevail, this will attract more customers, thus increasing profit, which will satisfy the shareholders. Tesco also, rather than paying higher wages, which would displease the other stakeholders, offer pension schemes, which cost Tesco relatively little, but provide motivational factors, such as job security. They also have award schemes to recognise and motive staff who are performing well, this also if relatively cost free, and catch free, since it does not affect any other stakeholders negatively.

Customers are the most important stakeholders in every company, since it is these who provide the means to satisfy every other stakeholder. Customers help satisfy all the other stakeholders because, if customers are unhappy with the company they will not shop there meaning the shareholders would not gain though owning shares, thus few would be purchased. The employees would suffer due to poor relations with customers since fewer would be needed. Hence without customers there would be no other stakeholders, other than the local community.

Creditors are people or companies who the business owes money to. They are important stakeholders because they allow companies such as Tesco to purchase products when the capital may not be readily available, they do this on the account that the money will be recuperated though the sales of these products and then will be repaid. It is important for a company to maintain a good relationship with creditors since they are used to purchase products for the company, in the case of a Plc such as Tesco, rather than selling shares to generate capital, since the price of shares fluctuates. If Tesco were to sell shares to purchase product, and then buy them back once the cost of purchasing the products is regained, Tesco may have to pay a higher price to repurchase them, or on the other hand they may have to pay less, but this would not be good business, since generally a falling stock price usually means the company is reforming poorly.

Suppliers are the companies who supply the products which businesses sell consequently they are important stakeholders. Companies often fid it difficult to satisfy suppliers, especially large supermarket chains, since they want to pay the lowest possible price for the products, so suppliers end up making little profit from their products. Due to these problems with satisfying suppliers large companies will often expand vertically, thus purchasing the suppliers, thus lowering costs which will benefit the other stakeholders since it will mean lower costs, therefore increasing the profit margin on the products, whilst making it possible to lower the selling price of products. Tesco attempt to satisfy their suppliers by buying them, thus removing any dissatisfaction they may have as stakeholders. The suppliers that Tesco does not own do not generally have their concerns taken into account since if they will not sell their products at the price Tesco wants them to, Tesco will simply purchase the product from a supplier who is willing to supply at that price. Tesco can do this because all the potential companies for which the suppliers can supply do the same, since the supermarket market is a highly competitive one and companies attempt to match the price of rivals. This causes the suppliers to suffer, but they cannot refuse to supply for a low price because if they did so, they would sell their product to very few companies.

The local community is a very important stakeholder for all businesses, since they are possibly the most influential stakeholders. This is because the local community is usually also the customers of a company, accordingly if they are unhappy with the company they will simply not purchase that companies product or products. Hence if the community is unhappy, as are other stakeholders, such as stakeholders, since less profit will be being made, so they will be receiving less in the form of dividends. Furthermore independent suppliers may be reluctant to supply the company, lest the company's bad reputation be bestowed upon them. To combat the detrimental effects a business may have on a local community, such as increased traffic and pollution, companies often set up schemes to benefit the local community. Tesco's scheme to combat unrest in the local communities is that they offer 'free' computers for school, if customers spend a certain amount. This not only benefits the local community, it gives Tesco additional publicity, relatively cost free, since customers will be more willing to spend a little extra because if they do they are contributing towards a good cause, this bolters the companies profits, thus recuperating the costs of the scheme. This also satisfies other stakeholders, the shareholders will possibly gain more in the form of dividends due to the increase profits from the greater publicity and customer spending. The employees will be better motivated because they will feel that working harder will benefit a good cause, since they will be encouraging customers to purchase greater quantities of products. This scheme will also encourage suppliers to supply Tesco ahead of other supermarkets, since being the supplier of a company which helps the community would add to their image.

Throughout this essay I have looked at how stakeholders form a vital part of every company with an in depth look at how Tesco's treatment and management of its stakeholders are vital to Tesco's success. I have discovered the fragile balance between all the stakeholders and how one dissatisfied stakeholder will cause the majority of the other stakeholders to become dissatisfied.