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Economic influences on businesses also affect business stakeholders. Stakeholders that could be impacted by these changes include: shareholders and owners, employees, suppliers, government, customers, suppliers and the local community.

Unemployment

Unemployment can have a significant impact on a range of business stakeholders.

• Shareholders and owners may receive higher dividends if the business employs less people, and recruitment costs and wages may be lower, however they could also be negatively impacted by the possibility of fewer customers, with less disposable income.
• Employees may fear for their role if unemployment is high, they would also have less bargaining power for wages and workers’ rights. If unemployment is low, employees will be more secure in their role and likely to have higher wages.
• Suppliers will receive more orders when unemployment is low, as more customers will have disposable income to purchase products. When unemployment is high, suppliers will receive fewer orders and may have to reduce prices.
• The government will have to pay more state benefits when unemployment is high, and have to provide more schemes to lower unemployment. When unemployment is low, the government receives more money through taxes and will provide less state benefits.
• When unemployment is low, businesses are likely to perform better and will be more likely to expand their business and premises, which could negatively affect the local community. However, this may also mean that businesses may need to employ more people from the local community.

Changing levels of consumer income

• If incomes rise shareholders and owners may receive a larger dividend, but may also have to increase the wages of employees. If general consumer incomes fall, this could decrease the amount of money a business makes.
• Employees and customers may benefit from additional income, which could provide them with more money to spend on luxury goods and services.
• Suppliers may benefit from additional orders due to higher incomes, or a drop in orders if income levels drop. They may also have to increase wages for their employees.
• The government will receive more in taxes if incomes rise, and less in taxes if incomes fall.

Changes in interest rates

• Shareholders and owners may decide to store more money in the bank rather than investing in the business if interest rates rise. If interest rates fall, they may be more inclined to invest money in the business.
• Customers may be less likely to spend if interest rates increase, as they would benefit from having money in a savings account and will be less likely to take out a loan - his would also decrease tax revenue for the government. If interest rates drop, customers may be more likely to spend or take out a loan, and less likely to save money in the bank - this would also increase tax revenue for the government.

Taxes

• Shareholders and owners will receive higher dividends and profit if taxes are low. If taxes increase the opposite may happen.
• Employees will have a higher level of take home pay if tax rates are low. If taxes increase, employees will have a drop in take home pay.
• The government will receive more money if taxes increase. If taxes decrease they will be likely to receive less revenue through taxes.
• Customers may have more to spend on goods and services if taxes decrease. If taxes increase then customers may spend less due to having less disposable income.