1.1.3 Stakeholders and their Objectives

Question 1

Economics Agents

Answer 1

a person, company, or organisation that has an influence on the economy by producing, buying, or selling.

Question 2

Stakeholders

Answer 2

Stakeholders are groups or individuals that are affected by and/or have an interest in the operations and objectives of the business.

Question 3

Shareholders

Answer 3

an owner of shares in a company.

Question 4

Suppliers

Answer 4

a person or organisation that provides something needed such as a product or service.

Question 5

Creditors

Answer 5

People or organisations that are owed money by a business.

Question 6

CSR (corporate social responsibility)

Answer 6

is when companies integrate social and environmental concerns into their business operations and in their interaction with their stakeholders on a voluntary basis.

Question 7

Reasons for CSR

Answer 7

• Altruism – being a good citizen
• Contracting benefits – e.g. helps recruit, motivate and retain employees
• Customer-related motivation: attract customers; brand positioning
• Lower production costs (packaging, energy usage)
• Risk management – address potential legal or regulatory action

Question 8

Tax evasion

Answer 8

the illegal non-payment or underpayment of tax.

Question 9

Transnational or Multinational corporations (TNCs or MNCs)

Answer 9

these are large businesses that operate in a number of countries. They often separate their production between various locations, or have their different divisions – Head Office and Administration, Research and Development, Production, Assembly, Sales – separated around a continent or the globe.

Question 10

Reasons for TNCs or MNCs

Answer 10

• Global expansion of a major product with worldwide markets, such as Coca Cola
• Take-over of foreign competitor firms, such as BMW
• Merger with foreign firms into one large international company, such as GlaxoSmithKline
• Vertical integration: acquiring the companies that sell you materials and components, and/or that you sell on to for manufacture, assembly or sales.
• Horizontal integration: acquiring the companies that make similar components that, along with yours, will go into the final product.

Question 11

Zero- hours contract

Answer 11

is a type of contract between an employer and a worker, where the employer is not obliged to provide any minimum working hours, while the worker is not obliged to accept any work offered.

Question 12

Internal Stakeholder

Answer 12

• Directors
• Managers
• Employees

Question 13

Connected Stakeholder

Answer 13

• Shareholders
• Customers
• Suppliers
• Advisers
• Consultants
• Competitors

Question 14

External Stakeholder

Answer 14

• Government
• Local community
• Pressure groups
• Media