1.4 Stakeholders Flashcards

1
Q

Stakeholder concept

A

The view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders

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2
Q

Internal stakeholders

A

Employees

Managers

Shareholders

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3
Q

External stakeholders

A

Customers

Suppliers

Government

Banks and other creditors

Community

Competitors

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4
Q

What are the 4 types of methods of conflict resolution?

A

Arbitration

Worker participation

Profit sharing schemes

Share ownership schemes

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5
Q

Arbitration

A

To resolve industrial disputes between workers and managers

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6
Q

Advantage of arbitration

A

Independent arbitrator will listen to both arguments and decide on a fair solution.

It is fair

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7
Q

Disadvantage of arbitration

A

Neither stakeholder will have what they want

Costs of the business might get higher if the arbitrator decides on higher wages or better work conditions

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8
Q

Worker participation

A

To improve communication, decision making and reduce potential conflicts between workers and managers

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9
Q

Advantage of worker participation

A

Workers have a contribution

Can motivate staff

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10
Q

Disadvantage of worker participation

A

Some managers think that it wastes time and resources. Managers job to decide

Some information cannot be disclosed to staff

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11
Q

Profit sharing schemes

A

To reduce conflict between workers and shareholders over the allocation of profits and to share the benefits of company success

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12
Q

Advantage of profit sharing schemes

A

Motivate workers to work in ways that will increase long term profitability

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13
Q

Disadvantage of profit sharing schemes

A

Administration costs

Negative impact on employees motivation if share price falls

Employees may need to work for a few years before being able to gain profit and therefore does not motivate new staff

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