CHAPTER 7 - Stakeholders

Question 1

Shareholders

Answer 1

owners of a limited company. all shareholders share the common objective of sustained long-term growth, giving both capital gain and increasing income. However, the reality is that even shareholders can come into conflict.

Question 2

Stakeholders

Answer 2

any individual or group which is affected by the business and so has an interest in its activities.

Not all driven by the same objectives; in fact it is likely that different stakeholder groups will want very different things from the business concerned. Therefore not unusual to find different stakeholders and stakeholder groups coming into conflict over a business’s activities and objectives.

Question 3

Employees/workers

Answer 3

from middle management down receive a wage and possibly fringe benefits such as pensions. Naturally, a major concern of this category of stakeholders is job security.

Question 4

Customers

Answer 4

an increasingly important stakeholder. satisfying customers’ needs profitably should lead to financial success to satisfy the other stakeholders. Customers want efficient service and a quality product, at a competitive price. These requirements should not be at odds with good business practice, but unfortunately sometimes they are. The short term nature of businesses can mean that achievement of immediate profit comes ahead of long-term customer satisfaction. Also customers like to feel needed and respected; it is all too easy to alienate your customer base. Maintaining good public relations is increasingly important

Question 5

Suppliers

Answer 5

depend on the success of businesses for their sales – and businesses depend upon suppliers in order to carry on their operations. They are mutually dependent.
Suppliers want a fair price for their products whilst businesses wish to minimise costs. unfortunately for suppliers, the power in the market often rests with the buyer,

Question 6

Government

Answer 6

benefits from business success as it results in increased tax revenues, higher employment
and lower benefit payments.

Question 7

Local communities

Answer 7

need to be considered as a stakeholder. There are a number of benefits to a local
community that stem from local business activity. These may include employment, increased regional
wealth, improved facilities and infrastructure. Often the economic prosperity of a community may
depend on one large employer in their area