- The amount of the effect will depend on how close the stakeholder is to the company.
- In many situations, the actual impact is to affect the company again; the stakeholders will mitigate the risk by distancing themselves from the company.
Business risks initially affect the company subject to those risks. However there will be a ‘knock-on’ effect of those risks on stakeholders:
– The amount of the effect will depend on how close the stakeholder is to the company.
– In many situations, the actual impact is to affect the company again; the stakeholders will mitigate the risk by distancing themselves from the company.
– Impact on stakeholders is likely to be more severe where they actually cause the business risk in the first place.
Shareholders:
Potential loss of value of investment in company (fall in share price) and loss of income (decreased dividends).
Managers:
Likely to mean that the department they are in charge of falls behind budget in some way. Quite likely therefore that managers become demotivated, especially if business risk was not their fault. Possible fall in remuneration if part of salary is performance related.
Government:
The main impact is likely to be less revenue raised (either in terms of sales taxes and/or corporation taxes). It is probable that the company will make less profit, resulting in a fall in tax revenue.
Trade unions:
Loss of jobs will impact on their membership, affecting status and power, as well as subscription income.
