3.2.3- Understanding the role and importance of stakeholders

Question 1

Who are the internal stakeholders?

Answer 1

• Owners (shareholders)
• Managers
• Employees

Question 2

Who are the external stakeholders?

Answer 2

• Customers
• Suppliers
• Local community
• Government
• Creditors

Question 3

What’s the impact of stakeholders with different objectives?

Answer 3

• Businesses have to balance and keep all stakeholders happy.
• Companies must satisfy many groups and survive financially
• Stakeholders dont always disagree though, as some interests overlap

Question 4

Why are relationships with stakeholders important?

Answer 4

• During recession: businesses focus on not going bankrupt and cannot fund community, may cut wages and not pay dividends
• If they focus on one stakeholder, the others will be at an expense, it can damage business
• Consulting: stakeholders feel valued and their opinions are considered can maintain relationship with stakeholders
• Good communication: can make stakeholders feel included

Question 5

Explain a stakeholder map.

Answer 5

• High power, high interest: Manage closely (Most effort)
• Hight power, low interest: Keep satisfied
• Low power, high interest: Keep informed
• Low power, low interest: Monitor (Least effort)