Shareholders are a stakeholder in Cadburys as they have an interest in the company and want it to succeed in its targets so that the share price goes up. Cadburys has over 60,000 registered share holders which include private individuals as well as large institutional investors like banks and pension funds. Shareholders are entitled to attend an annual meeting in which they have the opportunity to ask questions, discuss the company's performance and vote on certain issues. Shareholders can be internal and external to Cadburys. An employee at Cadburys could still own shares in the company, and be internal, so can an individual who is external to Cadburys, be a shareholder. The share price for Cadbury (CBRY) at the time of writing is 504.5p which has declined by 166.00 from 6 months ago.
Shareholders at Cadburys have been affected considerably in the last year as the share price for (CBRY) has been declining for several months. The result of this will mean that shareholders who have a stake in their company will be losing the values of their investments. This will also affect the amount of dividends paid by Cadbury’s as the amount will be lower.
An external stakeholder is someone who is not directly affected by the day to day activities of the company, like a local resident. Local residents can be internal as well as external as the resident could be an employee of the company. Local residents can be affected by the decisions Cadbury make as the factory could decide to work through the night which may cause residents distress from the noise made from the factory. Cadburys will listen to the opinions and needs of its stakeholders (internal & external) to try and make sure they make everyone satisfied in the actions they take. The local community is affected by Cadburys decisions, for instance; Cadburys decided to open a new factory in an area of high unemployment because of an incentive from the government (see below). This affected the community considerably as it created jobs for the local residents, which in effect raised there level of income and improved their quality of life.
Suppliers to Cadburys are stakeholders as they supply Cadburys with produce which gives the suppliers business. Cadburys has around 40,000 suppliers around the world and its Ethical Sourcing Standards set out how to work with them. The company is in regular dialogue with its suppliers and responds to their suggestions. For example, if a supplier had views on ways of improving quality or efficiency then Cadbury’s would listen and possibly act on ideas if they made good business sense. Working in partnership with suppliers makes it possible to find out their needs and also to ensure they satisfy Cadbury’s requirements for quality materials while operating in a socially responsible way. Cadbury’s evaluates potential suppliers against a set of standards such as environmental protection and ethical labour practices prior to doing business with them and encourages their principles and standards to be upheld during the relationship. Suppliers to Cadbury’s are external as they work outside of the company and are not included in the day to day running of the business. Suppliers are affected by the decisions that Cadbury make as they supply the materials that Cadburys need. If Cadbury decides to cut costs and stop some of the production lines then they will reduce the amount of deliveries that Cadburys take, which will directly affect the suppliers to Cadburys. As I mentioned above Cadburys will listen to the needs of their suppliers and will do all they can to satisfy their suppliers.
The government is a stakeholder of Cadbury's because of the money they can earn from this business. The government will take money from Cadburys for taxes. The government will also receive V.A.T on every Cadbury product sold. The government is also interested in the job opportunities Cadburys can create for people. The government gave Cadbury's an incentive to open there new factory in a place where there is high unemployment. The government did this so there would be less people claiming benefits and a higher employment rate. The Government is an external stakeholder to Cadburys as they do not work for Cadburys and are not involved in the day to day running of the business..
Conflict Stakeholders
Stakeholders can also be called conflict stakeholders, which means two or more stakeholders want different things from the same company. As stakeholders are affected by the decisions the business makes, they will try to get the business to do what they want: eg. Owners want more profit, workers want good working conditions and suppliers will want a good flow of business. Unfortunately the different requirements of stakeholders can cause problems, this is because there will be arguments about what the business should do. For instance, the owners may want more profit which means they will increase the prices, Customers however will want low prices. When conflict occurs the stakeholder with the most influence will usually get what they want, this may upset some of the other stakeholders, but the right decision needs to be made for the business.
In 2003, Cadbury, the chocolate manufacturer, announced a £9 million pound scheme to put sports equipment in schools across the UK. The scheme involved encouraging customers to save tokens from chocolate bars and give them in to schools. 750 tokens were needed to get the first bit of sports equipment and 2,000 tokens would allow the school to acquire a range of different equipment. For financially hard-pressed schools, the chance to get new equipment was very appealing. Top sports stars such as boxer Audley Harrison and runner Paula Radcliffe had both signed sponsorship deals with Cadbury and the government also supported Cadbury's 'Get Active Campaign'. The company and the government, however, were criticised for encouraging children to eat more chocolate when there are growing concerns about the problem of obesity in young people. Shareholders and management can disagree over many things:
Managers may wish to hold more cash, they may wish to lower the firm's risk and subsequently increase job security, they may not want to work hard, they may want to pay employees more than they deserve, and they may want other perks such as a fancy office or a jet plane. These are but a few of the number of things that managers and shareholders can disagree over.
Employees & Shareholders can have a stakeholder conflict because employees may want higher wages and shareholders would want higher dividends. Usually the stakeholder with the most influence will get what they want but overall Cadburys needs to do what’s best for the company.