Chapter 1 - E Flashcards
Importance of other stakeholders
What is a stakeholder?
People or groups of people who have an interest in the way a company acts.
Examples of stakeholders are: (List 6)
- Customers. - Shareholders. - The government and regulators. - Intermediaries. - Employees.
What key interests and expectations would a customer have in a business? (List 4)
- Quality. - Value for money. - Service standards. - Fairness.
What key interests and expectations would a shareholder have in a business? (List 2)
- Return. - Performance.
What key interests and expectations would the government and regulators have in a business? (List 4)
- Tax. - VAT. - Legal and regulatory compliance. - Open communication.
What key interests and expectations would an intermediary have in a business? (List 2)
- Commission. - Service standards.
What key interests and expectations would a emoyees have in a business? (List 4)
- Fair rewards. - Training. - Career progression. - Health and safety.
A company has responsibility to all stakeholders and need to provide satisfaction to them all. This can be difficult to balance due to?
Conflicts of interest between stakeholders.
What influencing factors from stakeholders could affect company strategy? (List 6)
- Composition and significance of each group. - Power which each group can exert. - Legitimate claims which each group have on the organisation. - Degree to which these claims conflict and significant areas of concern. - Extent to which the organisation is satisfying claims. - Overall mission of the organisation.
What are business ethics?
Standards and moral conduct which a company associates itself both within and outside the business. This includes how individuals conducts themselves at social affairs.
Large organisations can have revenue income which is often more than _______________. Because of this, how a company uses its wealth is important because?
Small nations.
Responsibility and power are closely interlinked. An example of this could be a senior manager in a large company who’s decisions could affect a large number of employees. What ethical issue could arise here?
The decisions made by the senior manager could have an affect on whole communities.
Why is it important for an organisation to be aware of how they handle ethical and environmental issues?
Increasement in judgement from consumers and consumer groups.
Due to the impact cultural influences can have on strategic business decisions, cultural factors could also affect?
The moral thinking of managers.
What does it mean if a company works with a clear SHAREHOLDER FOCUS? (List 4 points)
- The organisation does not believe they hold any role beyond their own business.
- The key responsibility of the business is to look after its shareholders.
- Company purpose is unlikely to include any comment on business ethics.
- This view does not mean the company behaves unethically.
What does it mean if a company works with a STAKEHOLDER PERSPECTIVE?
- They believe it is in their long-term interests, including those of its shareholders, to play a role in society beyond what is required by law.
- Sponsorships and community projects are good exmaples of this.
- Many financial organisations follow this perspective.
What is CSR and what does it mean?
- Corporate Social Responsibility.
- The need for a business to go beyond the law’s requirements in protecting the environment and contributing to social welfare.
- Widely accepted as an obligation of modern business.
- Examples, improving employee policies, making environmentally conscious investments and charitable giving.
Under the CII Code of Ethics, members must follow 5 principles. What are all 5?
- Comply with the Code and all relevant laws and regulations.
- Act with the highest ethical standards and integrity.
- Act in the best interests of each client.
- Provide a high standard of service.
- Treat people fairly regardless of: age; disability; gender reassignment; pregnancy and maternity; marriage and civil partnership; race; religion or belief; sex and sexual orientation.
What is the purpose of the CII Code of Ethics and what will happen if they are not followed?
- Maintaining reputation of the CII.
- Go beyond minimum requirements and show its concern for attitude and behaviour.
- Represent a positive statement of the core principles that must support decision making, business relationships and a member’s general behaviour.
- Disciplinary action.
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