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EdExcel GCSE Business > 1.5.1 Business Stakeholders > Flashcards

1.5.1 Business Stakeholders Flashcards

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1
Q

Business stakeholder:

A

any individual/organisation who has a vested interest in the activities and decision making of a business

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2
Q

What can stakeholders be grouped into?

A
  • Internal (internal to the business)
  • Connected (connected by a relationship based on a contract)
  • External (relationship not based on a legal contract)
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3
Q

Examples of internal stakeholders:

A
  • employees
  • managers
  • shareholders/owners
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4
Q

Examples of connected stakeholders:

A
  • customers
  • suppliers
  • creditors (who the business owes money to)
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5
Q

Examples of external stakeholders:

A
  • competitors
  • government
  • society/the wider community
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6
Q

What is the difference between a stakeholder and a shareholder?

A
  • stakeholders have an interest in the business
    • don’t own the business
    • they may work work for or transact with the business
  • shareholders own the business
    • they may also work with in the business
    • mainly interested in growing the value of their shareholding
    • a shareholder is an example of a stakeholder
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7
Q

Possible conflicts between stakeholder groups:

A
  • different stakeholders may want different things from a business, which means that there could beconflictbetween them - overcoming a conflict will often requirenegotiationand willingness tocompromise
  • The owners of a retail business decide to grant permission to extend the business’ opening hours on weekdays - owners believe this will increase profits, but the decision is likely to cause conflict with the other stakeholders
    • managers might have to work longer hours
    • employees may need to work different shifts, including working later
    • some customers may want even longer opening hours, eg 24 hours a day
    • suppliers could impact their customers by changing delivery routes and times
    • the local community could be disturbed by increased traffic and noise
    • pressure groupsmay be unhappy if longer opening hours are against their cause, eg groups promoting families spending more time together or improved work-life balance
    • the government may require additional resources to monitor the impact on the local area, eg additional policing to deal with any shoplifting that takes place later in the evening
  • no business can ignore its customers - if it can’t sell its products/services it won’t survive
  • a business may want to hold onto its money for as long as possible, but suppliers will become unhappy if they’re not paid on time
  • if a business doesn’t have happy workers it may become unproductive
  • but a company may not mind being unpopular in the local community if it sells most of its products somewhere else
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8
Q

Who is a shareholder and what do they decide?

A
  • owners of the business (in a limited company) - most important stakeholder
  • decide what happens to the business and make a profit if the business is successful
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9
Q

What are the objectives of shareholders (in relation to the business)?

A
  • owners - most important stakeholder
  • high share price
  • return on investment + profits and dividends
  • success and growth of the business
  • proper running of the business
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10
Q

How are shareholders/owners affected by business activity?

A
  • may not decide to grow the business and authorise opening new stores
  • will expect to see sales increase over time
  • however, opening a new store will cost money, which may affect profits in the short term and could affect the amount of dividends they will receive
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11
Q

How do shareholders/owners impact business activity?

A
  • Owners have the most impact, as they make decisions about the activities of the business and provide funding to enable it to start up and grow
  • Shareholders influence the objectives of the business
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12
Q

What are the objectives of managers (in relation to the business)?

A
  • rewards, including basic pay and other financial incentives
  • job security and working conditions
  • promotion opportunities + job satisfaction & status - motivation, roles, responsibilities
  • good working wage
  • benefit most when objectives of a business are based on profitability, growth and ethics
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13
Q

How are managers affected by business activity?

A
  • take on additional responsibilities and set new targets
  • may have opportunities for career progression, and could become demotivated if they are not given such opportunities
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14
Q

How do managers (owners) impact business activity?

A
  • managers make some recommendations and decisions that influence the business’ activity
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15
Q

What are the objectives of employees (in relation to the business)?

A
  • rewards, including basic pay and other financial incentives
  • job security and working conditions
  • promotion opportunities + job satisfaction & status - motivation, roles, responsibilities
  • good working wage
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16
Q

When do employees benefit the most from a business?

A
  • benefit most when objectives of a business are based on profitability, growth and ethics
17
Q

How are employees affected by business activity?

A
  • have increasedjob security as a business grows
  • could also have opportunities for promotion to new roles
  • some employees could feel resentful if they are not offered opportunities
18
Q

How do employees impact business activity?

A
  • employees may have a limited amount of influence on business decisions
  • however, they can also affect the business directly, e.g. by refusing to work or not working as well as they should
19
Q

What are the objectives of customers (in relation to the business)?

A
  • value for money
  • product quality and customer service
  • benefit when business objectives based on customer satisfaction
20
Q

How are customers affected by business activities?

A
  • will benefit from having more choice about where to shop, but they may remain loyal to existing businesses
  • through good marketing activity by the business, some may be tempted to try the new store
21
Q

How do customers impact business activity?

A
  • customers buy products and services and give feedback to businesses on how to improve them
  • customers are also able to influence others by recommending the business to friends or by warning them against using the business
22
Q

What are the objectives of suppliers (in relation to the business)?

A
  • if business/firm is profitable and grows they’ll need more materials and the supplier will get more business
  • so suppliers benefit most when firm sets objectives based on profitability and growth
23
Q

How is a business related to a supplier?

A
  • a firm/business buys its raw materials from suppliers
24
Q

How are suppliers affected by business activity?

A
  • benefit from increased orders to equip and stock the new store, which might lead to an increase in their profits
  • if they are unable to cope with the extra demand, there is a risk that the business will use other suppliers
25
Q

How do suppliers impact business activity?

A
  • Suppliers can have a significant impact on a business if there are any changes in the quality of the goods they supply or the reliability of their deliveries
26
Q

What are the objectives of the local community (in relation to the business)?

A
  • local community where business is based will suffer if firm causes noise and pollution
  • may gain if the firm provides good jobs and sponsors local activities
  • if business employees local people, these employees will then have more money to spend in local shops - good for local economy
  • so local community may benefit most when objectives are based on minimising environmental impacts, ethical considerations, growth and profitability
27
Q

How is the local community affected by business activity?

A
  • will benefit as a new store is likely to bring new jobs
  • however, they may be unhappy with increased traffic or noise
28
Q

How does the local community impact business activity?

A
  • if a business affects a large number of local residents negatively, they may protest or object through the local council
  • they can also support businesses by buying products and services
29
Q

What is a pressure group and what can they do?

A
  • an organisation that tries to influence what people think about a certain subject
  • can influence the decisions a firm makes by creating bad publicity for the firm if they don’t agree with the firm’s actions
30
Q

What are the objectives of pressure groups (in relation to the business)?

A
  • ethical considerations
  • minimising environmental impacts
31
Q

How are pressure groups affected by business activity?

A
  • may protest against the new store if they feel their cause is adversely affected, eg if the store would increase pollution
  • this could deter other businesses from coming to the area
32
Q

How do pressure groups impact business activity?

A
  • pressure groups can improve working conditions for employees and help them to get fair pay
  • they can also try to influence customers’ opinions of a business
33
Q

What are the objectives of the government (in relation to the business)?

A
  • the gov will receive taxes if the firm makes a profit
  • the more profits a company makes the more they will have to pay the gov in taxes
  • gov may benefit most when business objectives based on profitability, growth, or job creation
34
Q

How is the government affected by business activity?

A
  • may be pleased to see new jobs being created and may expect to see increases in tax revenues as a result
  • however, other businesses could lose customers, which would reduce their profits and the tax they have to pay as a result
35
Q

How does the government impact business activity?

A

Governments can pass new laws, change tax levels or amend levels of government spending in ways that affect the business, e.g. by providing increased grants or funding

36
Q

Examples of stakeholders:

A
  • Shareholders/owners
  • Managers
  • Employees
  • Customers
  • Suppliers
  • Local Community
  • Pressure Groups
  • The Government
  • Trade Unions
  • Competitors
  • The media

EdExcel GCSE Business (38 decks)

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