3.4.3 - Shareholders V Stakeholders Flashcards
What are Stakeholders?
Individuals or groups that affect or are affected by the actions of a business
Examples of internal Stakeholders?
- Employees
- Managers and Directors
- Business owners
Examples of external Stakeholders?
- Customers
- Shareholders
- Suppliers
- Local community
- Government
What are owners objectives?
- Income
- Enhanced profit
What are employees objectives?
- Job security
- Good pay
- Good working conditions
What is managements objectives?
- Meet company’s goals and objectives
- Maximise profits
- Minimise costs
What are customers objectives?
- High quality goods
- Fair prices
- Good customer service
What are shareholders objectives?
- Maximise on their returns
What are suppliers objectives?
- Long term arrangements
- Business to pay what it owes
What are local communities objectives?
- Positive impact
- Contribute to local causes
What are governments objectives?
- High tax
- Promote public good and protect citizens interest
What is a shareholder?
A shareholder has a monetary investment in the form of shares
What is the stakeholder approach?
When a business carefully balances the needs and interests of various stakeholders in setting goals and striving for effectiveness
What is the shareholder approach?
The shareholder approach is used by large corporations and it is focused on meeting the needs of shareholders
- Consists on maximising profits to increase dividends
Examples of shareholder conflicts
Shareholder and Employees
- Maximise investments means no higher wages or conditions for employees
Shareholders and customers
- Customers want lower prices but shareholders rise prices to rise returns
