1.1.3 Stakeholder and their objectives

Question 1

What is a stakeholder?

Give examples

Answer 1

Anyone that has an interset in a business

shareholders, managers, employees, consumers, government and suppliers

Question 2

What is the shareholders objectives?

Answer 2

To maximise profits in order to benefit in the form of dividends.

Question 3

Managers objectives?

Answer 3

Earn large bonuses whilst aiming for a work life balance

Question 4

Employees objectives?

Answer 4

Earn high wages with good working conditions

Question 5

Consumer objectives?

Answer 5

High quality goods at low prices.

Question 6

Government objectives?

Answer 6

Earn revenue from the business in the form of coorporation tax

Question 7

Suppliers objectives?

Answer 7

Firms are the customers of supplier so suppliers want firms to remian in business in order to continue to supply their goods/services to them. Also want assymetric information.

Question 8

How may different stakeholders objectives conflict.

Answer 8

Principal agent problem is common in businesses which is where the agents act in their own self interest where objectives are different to principals as prinicplals wish for profit maximisation but agents will seek higher bonuses and higher leisure time causing conflict.
Often occurs when there is assymetric information