Stakeholders

Investors, employees, customers, and the community at large are all stakeholders. Investors are stakeholders because of their monetary contribution. In exchange for their investment, they own some part of the enterprise. They have a capital, or equity, stake in the business. The value of their equity may go up or down in value based on the marketplace and how well the company performs. The performance of the company may also generate income for the investor from profit.

Customers are stakeholders; they also invest in the enterprise. The amount of money they invest is often larger than that of the investor. The customer who buys an automobile is investing more than the typical stockholder. If the automobile is faulty and proves dangerous, the customer has more at risk than the investor.

Employees are stakeholders. Employees invest their time, effort, education, and skill in the business. They invest their careers. Layoffs, downsizing, and relocation are just a few of the risks employees take when they invest their careers with a business. Over the course of history, many employees have sacrificed their lives in their pursuit of employment. Black lung and plant accidents are just a few of the tragedies and risks of the workplace.

Businesses operate in communities. These communities, whether they are villages, towns, or cities, are also stakeholders. Municipalities provide streets and roads, water and power utilities, as well as police and fire protection. These communities provide schools to educate and train workers. The citizens of these municipalities pay for this infrastructure through their tax dollars. Communities are stakeholders because they have also invested in these hometown businesses.

Businesses that are incorporated enjoy special privileges. The federal government provides for special tax treatment for corporations. Corporations, unlike sole proprietors and partnerships, continue on after their owners die, in effect, giving the business perpetual life. The national government is a stakeholder.