Why is the owner of a business the most important stakeholder?  I am doing coursework on Cadbury's. Thank you very much as this is very helpful for me. Thank you!

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krishna-agrawala | College Teacher | (Level 3) Valedictorian

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Before we discuss this question in detail, it will be useful to develop some clarity on nature of ownership of a business. A business may be owned solely by an individuals, or by several partners, or by a large number of shareholders. When a business is owned jointly by several people either as partners or as shareholders extent of ownership has considerable influence on the importance of the business to the individual. Also the extent to which a person is involved in management of the business affect his or her interest in the business. A small shareholder in a big company who holds just a few shares in the company for short term gains, is not likely to have the same kind of interest as another shareholder who is also the managing director of the company. Also importance of a company to the owner is also dependent on other businesses owned by the same person. Thus if a businessman running a big business also owns another small company, both these companies are not likely to be equally important for him or her.

Having thus clarified the nature of ownership, we can now state that an owner of a business is an important stakeholder in a business as the business affects his earnings and wealth. When an owner manages a business, the performance and conduct of the business also affects the reputation of the owner. In this way the importance of the business increases further. The importance of a business for the owner is also related to the ease with which owner can close one business and start another. A customer can easily switch his or her loyalty from product of one company to another, but a businessman cannot close down one business and start another. Thus the owner is stuck with a business for a long time.

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