3.2.3 - Understanding the role and importance of stakeholders Flashcards
What is a stakeholder?
Any person or group that has a vested interest in or influence over the activities of the business.
What is the difference between a primary and secondary stakeholder?
A primary stakeholder is someone that directly affected by a particular business activity whereas a secondary stakeholder is someone that does not have a direct functional or financial relationship with the business.
What are the possible stakeholder needs of a shareholder?
- Share price to be stable or higher
- Maximum profits to achieve the best possible dividend.
What are the possible stakeholder needs of an employee?
- Job security
- Good working conditions
- Income provided on time and in full/ the highest possible pay
- rewards for work.
What are the possible stakeholder needs of a customer?
- Good range of products
- High quality of products
- Fairly priced products.
What are the possible stakeholder needs of a supplier?
- Good communication
- Regular orders
- Payment provided on time.
What are the possible stakeholder needs businesses from payables (creditors)?
- low interest on any loans taken out
- as long time as possible between the time of taking out the loan and repaying the loan.
What are the possible stakeholder needs of the local community?
- Good environmental factors, limited pollution and footfall
- Clear social and ethical objectives.
If a stakeholder has high stakeholder power but low stakeholder interest, what group are they in on the stakeholder map?
Keep satisfied
If a stakeholder has high stakeholder power and high stakeholder interest, what group are they in on the stakeholder map?
Manage closely
If a stakeholder has low stakeholder power and low stakeholder interest, what group are they in on the stakeholder map?
Monitor (minimum effort)
If a stakeholder has low stakeholder power and high stakeholder interest, what group are they in on the stakeholder map?
Keep informed
What are some internal influences on a businesses relationship with its stakeholders?
- Business objectives
- Management and leadership styles
- The size and ownership of the business
What are some external influences on a businesses relationship with its stakeholders?
- Market conditions
- The power of the stakeholder groups
- Government policies
What is a stakeholder map?
A model used to assess the relative power and influence of different stakeholders and how to best manage them.
What is communication?
The process by which a message or information is exchanged from a sender to a receiver.
What is consultation?
Taking into account the views of employees further down the hierarchy.
Why is internal communication important in business?
This links together all the different activities involved in a business and ensures all employees are working towards a common goal.
Why is external communication important in business?
Where the business communicates with people and organisations outside of the business.
What is stakeholder conflict?
Where different stakeholders have different and often opposing objectives and goals.
Give an example of stakeholder conflict.
Cutting jobs to reduce costs would be supported by shareholders and consumers but opposed by employees as they may lose their jobs.
