1.5: Stakeholders in a Business

Question 1

Def. Stakeholders

Answer 1

People of groups of people who can be affected by, and therefore have interest in any action in the organisation.

Question 2

Def. Stakeholder concept

Answer 2

It is the view that businesses and their managers have responsibilities to a wise range of groups, not just shareholders.

Question 2

Who are the stakeholders? (7)

Answer 2

1. Customers
2. Suppliers
3. Employees
4. Local community
5. Government
6. Focus Groups
7. Shareholders

Question 2

What are the customer’s roles, rights and responsibilities? (2 2 2)

Answer 2

Roles:
* Purchase goods and services
* Provide revenue from sales

Rights:
* To receive goods and services that meet laws regarding health, safety and performance
* To be offered replacements, repairs, or compensation if the service/good fails (depends on the good or service).

Responsibilities:
* Not to steal
* Not to make false claims of for e.g poor service

Question 3

What are the employees’ roles, rights and responsibilities? (1 3 3)

Answer 3

Roles:
* Provide manual and other labour services to the business

Rights:
* To be treated above the minimum limits as established by the law
* To be treated and paid by the employment contract
* To be allowed to join trade union (in most countries)

Responsibilities:
* To be honest
* To meet the conditions and requirements of the employment contract
* To cooperate

Question 3

What are the suppliers’ roles, rights and responsibilities? (1 2 1)

Answer 3

Roles:
* Supply goods or services

Rights:
* To be paid on time
* To be treated fairly by the business e.g not put lower pricing

Responsibilities:
* To supply in the time and condition as laid down by the business

Question 4

What are the local community’s roles, rights and responsibilities? (1 2 1)

Answer 4

Roles:
* To provide local services and infrastructure

Rights:
* To be consulted about major changes that affect it e.g changing methods of production
* Not to have health affected by the business’s activities

Responsibilities:
* To cooperate when reasonable

Question 5

What are the government’s roles, rights and responsibilities? (3 1 3)

Answer 5

Roles:
* Passes laws that restrain some business activities
* Provides law and order to allow legal business activities
* Achieve economic stability to encourage business activity.

Rights:
* Businesses have to meet all the legal constraints and pay taxes

Responsibilities:
* To treat all businesses equally
* To prevent unfair competition
* To establish good trading links for international trade

Question 6

Benefits of accepting responsibilities to:
* Customers
* Suppliers
* Employees
* Local Community
* Government

Answer 6

Customers: Consumer loyalty, Repeat purchases, Good publicity
Suppliers: Supplier loyalty- will meet deadlines and give reasonable pricing
Employees: Employee loyalty, low labour turnover, employee contribution, improved motivation
Local community: Local councils will give permission to some activities.
Government: Receiving planning permission, Receiving valuable government contracts.