3.4.3 Shareholder Vs Stakeholder

Question 1

Stakeholder

Answer 1

Is any individual or group with an interest in the actions and decision making of the business

Question 2

Examples of internal stakeholders

Answer 2

Employees, managers, owners, shareholders

Question 3

Examples of external stakeholders

Answer 3

Customers, suppliers. Shareholders, government, local community, society, creditors

Question 4

Main interests of shareholders/owners

Answer 4

Return on investment profits and dividends, success and growth of business

Question 5

Main interests of managers and employees

Answer 5

Rewards such as basic pay and other financial incentives, job security, working conditions

Question 6

Customers main interests

Answer 6

Value for money, product quality and customer service

Question 7

Main interests if suppliers

Answer 7

Continues profitable trade within the business, financial stability

Question 8

Mains interests if banks and other sources of finance

Answer 8

Can busines repay loans of lended money, profitability and cash flows, growth in profits

Question 9

Main interests if government

Answer 9

Correct taxes, creating jobs - busines growth, compliance with business legislations

Question 10

Main interests if society

Answer 10

Success of business - especially creating and retaining jobs, environment

Question 11

Shareholder

Answer 11

Defined as any person, company or other institution that owns at least one of the companies shares - their financial risk is limited to the value of their shareholding

Question 12

Benefits do stakeholder approach

Answer 12

Higher levels of motivation of staff, improved perception of brand, greater research, long term improved profits and dividends

Question 13

Drawback of stakeholder approach

Answer 13

Slower decision making, risk of losing competitive advantage in short term and lower profits and dividends

Question 14

Stakeholder concept

Answer 14

A businesses responsibilities are towards all of its stakeholders

Question 15

Shareholder concept

Answer 15

Businesses responbioities are solely aimed at meeting the requirement of the shareholders

Question 16

Benefits of shareholder approach

Answer 16

Profit maximisation, consistent decision making, high revenue, low investment costs

Question 17

Drawbacks of shareholder concept

Answer 17

Isolation of stakeholders including customers, short termist approach, growth is inorganic, lacks long term sustainability, lack of competitive advantages - lack of investment in research and development