1.4 - stakeholders

Question 1

define stakeholder

Answer 1

A Stakeholder is any person or organization with a direct interest in, and affected by, the activities of performance of a business

Question 2

state the 2 types of stakeholder

Answer 2

1. Internal Stakeholders – members of the organization (i.e. employees, managers, directors or shareholders)

2.External Stakeholders – do not form part of the business but have a direct interest in the organization (i.e. customers, suppliers, Government, etc.)

Question 3

give an example of a internal stakeholder

Answer 3

An employee of a business in a Internal Stakeholder because he/she works there but is also a External Stakeholder because he/she lives in the community

Question 4

give an example of a external stakeholder

Answer 4

External accountants are considered External Stakeholder but when they start auditing for a business they also become Internal Stakeholder

Question 5

what are 6 interests of internal stakeholders

Answer 5

• Shareholders just focus on the Return of the business.
• CEOs focus on develop and coordinate strategies to get returns and profits for the Shareholders.
• Senior Managers focus on Strategic Objectives
• Middle Managers focus on Tactical Objectives
• Supervisors (floor managers) focus on operation objectives
• Employees and unions, focus on protecting their rights and working conditions

Question 6

what are 6 interests of external stakeholders?

Answer 6

• Government by ensuring the business acts in the public interests.
• Suppliers want to maintain a good relationship with the organization
• Customers want to get the best good or services that meet its needs
• Pressure groups focus oh how the business will affect their area of concern
• The media focus on the impact of the business for their stories and news
• Local community focus on the impact the business will have in their community

Question 7

explain why a pay rise is both a conflict and a benefit for stakeholders interests

Answer 7

Basically, employees will be very happy with the rise but shareholder may oppose to it since it will reduce their “stake” of profits

Question 8

state 3 ways a pay rise is a conflict

Answer 8

1. CEOs and senior managers may be worried they cant affors the rise and that will have an effect on proffits
2. managers might be concerned that they cannot motivate their employees in any other ways but monetarily
3. some business in the community might be affected negatively by the rise (i.e. low price supermarkets)

Question 9

state 3 ways a pay rise can be a benefit

Answer 9

1. if the employees are happy the productivity might increase in the business
2. when employees earn more money they can spend more. the local community will benefit
3. if employees have more money they can afford better things and might uplift specific markets (i.e. more expensive food)

Question 10

3 key issues to deal with stakeholders interests

Answer 10

• The type of organization in question – for example charity vs. partnership; they have different priorities
• The aims and objectives of the business – such as business expansions where the priority will be “the expansion”
• The source and degree of power of each Stakeholder group - for example , costumers will have the power if the product is easily substituted.