1.1.3 - Stakeholders And Their Objectives Flashcards
Economic agents/stakeholders
Someone with an interest in a business
What do shareholders want
High profits –> high dividends
Share price growth
What to banks and lenders want
Full loan repaid with interest
Maintain credit rating
What do for employees want
High salary
Job satisfaction
Job security
What do suppliers want
Business to have stable cash flow and be paid on time
What to customers want
Low price, high quality
What does the community want
Operations to be environmentally friendly
What does the government want
Taxes, grants to operate in certain areas, the economy to improve
Why does society need business
Employment
Investment, innovation
Profits and taxes
Why does business need society
Creates demand
Public assets, infrastructure
Legal protection
Arguments for CSR
Ethical
Improves reputation
Attractive to stakeholders
Reduces long-term costs
Arguments against CSR
“The business of business is business” - Freidman
“Have to make money before you can give it away” - Welch
Extra costs –> higher prices
Responsibility is to make money for shareholders
