3.2.3 The role and importance of stakeholders

Question 1

6 what is a stake holder

Answer 1

an individual or group or other institution with a direct interest in the activities and performance of a business or in a project to be undertaken by a business

Question 2

6 who are stakeholders of Holt

Answer 2

students
employees
governors
parents

Question 3

6 what is an internal stakeholder

Answer 3

a group closely connected to the organisation
business owners, suppliers etc

Question 4

6 what is an external stakeholder

Answer 4

customers, competitors, government agencies, pressure groups, etc

Question 5

6 who are primary stakeholders

Answer 5

those directly involved in and affected positively or negatively
have the power to influence decisions and can be internal or external
customers, suppliers, shareholders

Question 6

6 who are secondary stakeholders

Answer 6

internal or external who are intermediaries who are indirectly affected by company actions
trade unions, government

Question 7

6 who are key stakeholders

Answer 7

primary or secondary but will have significant influence upon importance in an organisation
customers, employees

Question 8

6 what is a trade union

Answer 8

organisation of workers seek through collective bargaining with employees to protect and improve the real incomes of members, job security and other non-work related services including compensation for injury at work

Question 9

7 what are shareholder needs

Answer 9

Profits to allow high dividends
Growth & positive corporate image for long-term growth and share price rises

Question 10

7 what are employees needs

Answer 10

Job security
Good working conditions
High levels of pay
Promotion opportunities
To be consulted about changes that might impact them

Question 11

7 what are managers needs

Answer 11

High status
High pay
High bonuses
Job security
Further the interests of their department and in turn their careers

Question 12

7 what are trade union needs

Answer 12

To be consulted and take an active part in the decision-making process in order to ensure decisions benefit their members

Question 13

7 what are customer needs

Answer 13

High quality products
Fair prices
Good service
Wide choice

Question 14

7 what are suppliers needs

Answer 14

Regular orders
Fair prices
Prompt payment
Advance notification of any changes

Question 15

7 what are banks and investors needs

Answer 15

Full and prompt repayment of loans plus interest

Question 16

7 what are local community needs

Answer 16

Local employment opportunities
Socially responsible behaviour (e.g. air pollution / traffic)

Question 17

7 what are pressure groups needs

Answer 17

For the activity to have neutral or beneficial impact on the environment

Question 18

7 what are central government needs

Answer 18

Provide employment and training
Comply with legislation on consumer protection, competition policy, employment, health and safety and the environment
Pay corporation tax on profits

Question 19

7 what are local government needs

Answer 19

As above and also to make a positive contribution to local community
To be consulted on plans for expansion or movement

Question 20

7 what conflict do employees and managers have

Answer 20

Job security and high wages may increase costs vs cost targets and potential high bonuses paid if improved cost efficiency

Question 21

7 what conflict to customers and shareholders have

Answer 21

Good quality products and low prices may reduce prices vs high profits and high dividends if prices are higher

Question 22

7 why would local community and shareholders have conflict

Answer 22

Reducing impact on local environment may have high cost vs lower costs leading to higher profits and therefore dividends

Question 23

7 what is a win-lose approach

Answer 23

Where an organisationplays off stakeholdergroups.
One group gainingleads to another losing
A firm will find it difficult to meet all the needs of its stakeholders

Question 24

7 what is a win-win approach

Answer 24

More integrated toimprove all stakeholderneeds
Improving one area can have knock-onbenefits forothers
A firm, can cause the pot of benefits to grow
Better conditions and rewards for employees

Question 25

8 why can stakeholders be a problem

Answer 25

an organisation has a number of different groups of stakeholders to appease, and it needs to prioritise which to pay most attention to

Question 26

8 what is stakeholder mapping

Answer 26

shows where all the groups are positioned
most famous is Mendeleev’s power-interest matrix (1991)

Question 27

8 what are the considerations of The power-interest matrix?

Answer 27

what power do the stakeholders have
what their level of interest is

Question 28

8 what is category A: low interest, low power

Answer 28

minimal effort
unskilled employees

Question 29

8 what is category B: high interest, low power

Answer 29

keep informed
local suppliers

Question 30

8 what is category C: low interest, high power

Answer 30

keep satisfied
central government

Question 31

8 what is category D: high interest, high power

Answer 31

key player
key managers

Question 32

8 what is the purpose of stakeholder mapping

Answer 32

helps the business understand which stakeholders to involve for a decision
failure to involve them can result in disengagement
don’t waste time and money if you don’t need to

Question 33

8 what are some problems with mapping

Answer 33

power and interest could change
not always obvious
interest is different to all stakeholders

Question 34

8 how do you manage relationships with stakeholders

Answer 34

communicate
consultation- find out opinions
participation- involved
partnerships- work together

Question 35

8 what are communications and consultations channels

Answer 35

tours and demonstrations
public forums
formal consultations
informal/formal meetings
regular updates