3.4.3 Stakeholders vs Shareholders

Question 1

stakeholder

Answer 1

-individual/organisation has vested interest in activities and decision making of a business
(have an effect on & are effected by)
-all obj=conflict with objs of other stakeholders/ SHs/business owners

Question 2

internal stakeholders

Examples

Answer 2

groups/individuals within an organisation who have interest in business

• shareholders/business owners
• managers/employees

Question 3

Examples of external stakeholders

Answer 3

1-media, competitors, customers, suppliers
2-external groups e.g. pressure groups (behaviour)
3-local community, gov
4-trade unions(body represent interest employees)
5-banks and other finance providers

Question 4

stakeholder mapping

Answer 4

high interest & power
-key =, notice engage directly (SHs/managers, govt/bank, PG)

low interest & high power
-satisfied (suppliers/employees/customers

high interest & low power
-communicate regularly = local community

low interest & Low power
-communicate only when necessary

Question 5

stakeholder concept & pros/cons of it ?

Answer 5

chose duty to fulfil as many stakeholders needs as possible (long termist)

pros:
-majority = greater benefits
-key (staff/customer) dont satisfy = business cant function
-loyalty (customer/staff) support (gov/pressure groups = grants)
-corporate socially responsible = higher prices (premium)
=positive impact on costs long term (financial efficiency)

cons:
- conflicting interests = trade off
- very costly to meet needs (in short term)

Question 6

shareholders

Answer 6

• own business/may work in business
• mainly interested in growing value of their shareholding (short termist)
• increase share value, profit max, dividends

-will face conflict with everyone else and will face a trade off

Question 7

shareholder concept & 2 pros/cons of it?

Answer 7

-approach where mainly interested in growing value of their shareholding (short termist)

pros:
- priority = provide essential investment without cant function could withdraw it
- main targets is to profit max = ensure efficiency decrease failure chance

cons:
- impact reputation to other stakeholders (unethical)
- lead to short termist decisions - miss some opportunities

Question 8

Examples stakeholder objs

Answer 8

1-local residents: clean/green production (few delivery)
2-staff: organic growth, new tech for products, rising shred profit
3-managers/directors: any growth method, invest in new tech, rising profits for bonuses
4-SHs; rising profits both short and long term
5-suppliers: growth
6-customers: quality of product/service/innovation
7-bankers: stable profits