2.3 Understanding The Role And Importance Of Stakeholders

Question 1

What is a stakeholder?

Answer 1

A stakeholder is any individual that has vested interest in the activity and decision making of a business

Question 2

Examples of stakeholders

Answer 2

Shareholders/business owners

Managers/employees

Customers

Supplier

Banks and other financial providers

Trade unions

Government

Local community

Question 3

Stakeholder can be grouped together

Answer 3

internal: Employees, Shareholders/Owner

Connected: Customers, Suppliers & Creditors

External: Competitors, Government & The wider Community

Question 4

Stakeholder mapping

LOOK FOR A STAKEHOLDER MAPPING

Answer 4

Stakeholder mapping categories the stakeholders of a business depending on their power and interests

Recognises different power & interest of the stakeholders

Informs how to communicate with each stakeholder

Question 5

Stakeholder needs and possible overlap and conflict of those needs

Answer 5

Have different needs and interests

E.g., owner and employees would want the business to do well

However it could create conflicts, employees may want higher pay but owner wants higher profits and not use the profit to higher the salary

Question 6

How to manage the relationship with different stakeholders

Answer 6

Excellent communication is vital - especially during changes in the business

There might be no need to consult some stakeholders.
E.g., when cutting costs.