Booklet 4: Stakeholder Groups

Question 1

What is a Stakeholder Group?

Answer 1

A Stakeholder is a person, group or organisation that has an interest or concern in a business entity.

Question 2

What is an internal stakeholder and who are they?

Answer 2

Internal Stakeholders- exist within the business. (e.g. business owners, shareholders, employees, managers).

Question 3

What is an external stakeholder and who are they?

Answer 3

External Stakeholders- exist outside the business. (e.g. customers, suppliers, creditors, lenders, pressure groups, government).

Question 4

Explain a Business Owners Stakeholder interest in the business.

Answer 4

1. Successful business with increasing profits.

2. Opportunities to grow the business.

Question 5

Explain a Staff Stakeholder’s interest in the business.

Answer 5

1. Job security
2. Good Salaries/ wages.
3. Good Working conditions
4. Opportunites for promotion.

Question 6

Explain a supplier’s Stakeholder’s interest in the business.

Answer 6

1. Ensure payment is on time.
2. Regular orders (long-term contracts)
3. Fair Prices
4. Growth of purchasing.

Question 7

Explain a customer’s Stakeholder’s interest in the business.

Answer 7

1. High-quality goods/ services.
2. Reliable supply of goods.
3. Fair prices for goods/ services.
4. Good customer service.

Question 8

Explain a Creditors Stakeholder’s interest in the business.

Answer 8

1. Full and regular payments at agreed dates.

2. Profitable business to ensure money owed can be paid back.

Question 9

Explain a Lenders Stakeholder’s interest in the business.

Answer 9

1. Valuable asset base, can be used as financial security.
2. Excellent credit rating.
3. Repayments paid on time.

Question 10

Explain a Pressure Groups Stakeholder’s interest in the business.

Answer 10

1. They want to be listened to.
2. Ensure fair treatment for employees.
3. Challenge the behaviour of a business.

Question 11

Explain a Local Communities Stakeholder’s interest in the business.

Answer 11

1. Secure jobs in the local area and contribute to the local economy.
2. Avoidance of noise and air pollution.
3. Provision of facilities for the local community.

Question 12

Explain a Government Stakeholder’s interest in the business.

Answer 12

1. Create employment opportunities for local people, to improve the economy.
2. Be successful in order to pay taxes.
3. Uphold their corporate social responsibility. (e.g. payment of minimum wages).

Question 13

Explain a Shareholders Stakeholder’s interest in the business.

Answer 13

1. Successful business to ensure steady return on investment in dividends.
2. Share price increasing.
3. Profit levels increasing.

Question 14

Advantages of the use of Social Media for Business and Stakeholder Groups.

Answer 14

1. Increases consumer awareness.
2. Reduced costs for the business (cheaper to advertise on social media).
3. It can help aid market research (through the use of surveys).
4. Customers can get in contact with the business very easily through social media platforms.
5. Viral Marketing.

Question 15

Disadvantages of the use of Social Media for Business and Stakeholder Groups.

Answer 15

1. Cost- social media requires extensive IT Support.
2. Privacy amd security concerns- fear of personal data being leaked.
3. Stakeholders can leave negative feedback on a business’ social media platform, affecting the corporate image of the business.
4. Doesn’t reach everyone (e.g. elderly customers).