1.

4 Stakeholders
(Government)
By Supreet Purohit
How is the government an external stakeholder?
● Since the Government is not part of the organization but has a direct interest
in a companies activities and performances it is an external stakeholder.
● The Government assures that:
○ Unfair business practices are avoided.
○ The correct amount of corporate tax is paid from net profits.
○ Health and safety standards at work are met.
○ Compliance with employment legislation occurs.
○ Consumer protection laws are upheld.
Government and Stakeholder Conflict
Possible conflicts can be

● Owners want to pay reduced taxes on the other hand government want to
maximise the tax so that provide funds for work such as national health
service, development, public transports, etc.
● Government would want the company to use more energy efficient machines
but the company would not want to compromise on their time and work rate.
Government and Stakeholders’ Interests
Possible interests can be:

● Government are reliant on the business owners to pay taxes.

● A growing business hiring new people decreases the unemployment rate in
the locality helping the local government and at times the company might be
backed by the government if it seems a good investment.
Case Study (Royal Dutch Shell)
Royal Dutch Shell (or Shell for short) is Europe's largest energy and oil company. It was formed
by the merger of Holland's Royal Dutch and Britain's Shell. In 1907 the BBC reported in early 2007
that the Anglo-Dutch company earns £1.5m ($2.5 m)per hour. In 2013, Shell topped the Fortune
Global 500 list of the world's largest companies, with revenues in excess of $467 billion (or 84% of
the Netherland's GDP). In recent years it has reported a 15% slump in profits and many oil miners
were removed.

From this case study it can be noticed at first the great profits of the company
have positively affected the GDP. Although, recently the loss in profits and loss of
employees meant increase of unemployment and also decrease in growth of GDP
which negatively impacted the Government and the country.