Business objectives & Stakeholder objectives

Question 1

Define stakeholder (2)

Answer 1

Any person or group with a (direct) interest in the performance/activities of a business [2]

Question 2

Define business objective (2)

Answer 2

A statement of a specific target that a business works towards [2]

Question 3

Identify 3 internal stakeholders and their objectives

Answer 3

Shareholders/owners :
Profit maximization since they are entitled to a return on the capital they have invested.
Business growth will also be an important objective since this will ensure the value of their shares increase

Workers:
Contract of employment that states all the rights and responsibilities
of the employees
Regular payments for work done by workers
Better/safe working conditions
Worker will want job satisfaction as well as motivation / opportunities for promotion
Access to training/development
Job security- the ability to work without the fear of being dismissed and made redundant

Managers
Secure job
Higher salaries due to their job requiring more effort
Business growth since a bigger business means that managers can control a bigger and well known business

Question 4

Identify 4 external stakeholders and their objectives

Answer 4

Customers:
Prices that reflect on the quality of good, cheap
product must be reliable and safe - no false advertisements on the product
Products must be well designed and good quality

Government: role of government is protect workers and customers from the business activities and safeguard their interest.

• Increase tax (revenue) / paid correct amount of tax [k] from the
  manufacture of bottles [app]
• Provide/increase number of jobs / minimum unemployment benefits to pay [k]
• Expect business to stay within the law [k]

Banks: Provide financial help for the business
Banks expect business to be able to repay the amount that has been lent along with interest

Community: all stakeholder groups affected by the businesses activities
The business must offer jobs to local employees
the production process must in no way harm the environment

Question 5

public sector businesses and its objectives

Answer 5

public sector businesses: Government owned and controlled businesses

Objectives:
providing good quality goods and services at an affordable rate
Providing employment to citizens by creating jobs
Raise living standards

Question 6

Explain two advantages that a business in the public sector may have that a business in the private sector may not.

Answer 6

• Possibly easier access to finance because they are funded by a government.
• They are not under pressure to make a profit because they are
  often/usually providing essential goods and/or services.
• They do not have to pay dividends to shareholders.
• They are frequently large businesses that benefit from economies of scale

Question 7

Identify two reasons why business need objectives (2)

Answer 7

• Provides targets/goals to work towards
• Way to measure success/judge/assess performance
• Helps decision-making / allocate resources

Question 8

Do you think the shareholders are the most important
stakeholder group to the success of a limited
company? Justify your answer. (6)

Answer 8

Shareholders/owners
Provide finance / invest money / capital in business [k] which can help the business expand / buy more equipment [an] so can increase output [an]
Influence the aims of the business [k]
Have the power to vote out the directors [k]
They have little / no influence over day-to-day decisions [k]

Other stakeholders can include:
* Customers [k] as they buy the products [an] and if
ignores their needs the business will lose sales/revenue
[an]
* Directors/managers [k] are responsible for day-to-day
decision-making [an]
* Employees [k] make the products [an] so if they
become demotivated quality may fall [an]
* Suppliers [k] provide materials/inventory [an]
* Local community [k] provide the workers [an]
* Government [k] provide the legal framework in which the business operates [an]
*Bank [k] provide finance/loans [an]

Example
Shareholders are important as they invest money in the
business [k] which can help the business expand [an].
However, once the business is established, they have little /
no influence over day-to-day decisions. Customers [k]
matter as they buy the products [an]. While shareholders
provide important finance, without customers even a limited
company cannot generate income [eval] and without this
cannot cover its costs or make a profit, so the customer is
probably the most important stakeholder. [eval]

Question 9

E