learning outcome 5 Flashcards
stakeholders
A stakeholder is any person, group or organisation
which has an interest in a business because they are
affected by, or may be affected by, the activities of
that business.
internal stakeholders
Internal stakeholders include owners (sole trader,
partners), employees (e.g. chief executive, directors,
managers, supervisors, assistants), and trade unions.
external stakeholders
To include external stakeholder groups such as
shareholders, customers, suppliers, potential
investors, lenders, local community, pressure groups,
and central and local government (e.g. HM Revenue
& Customs (HMRC), environmental health, planning
department).
Owners/Shareholders - how do they influence on business behaviour
Objectives: Maximize profits, increase share value, and ensure business sustainability.
Methods of Influence:
Voting at Annual General Meetings (AGMs).
Replacing management or directors if performance is poor.
Proposing changes to strategies to improve financial returns.
employees - influence on business behaviour
Objectives: Fair pay, good working conditions, job security, and career development.
Methods of Influence:
Strikes or industrial action.
Forming or joining trade unions to negotiate collectively.
Providing feedback or participating in staff surveys.
Customers - affect on business behaviour
Objectives: High-quality products/services, fair pricing, ethical practices.
Methods of Influence:
Boycotting products or services due to dissatisfaction.
Sharing feedback through reviews, surveys, or social media.
Public campaigns demanding improved service or ethical practices.
suppliers - affect on business behaviour
Objectives: Prompt payment, long-term contracts, and ethical treatment.
Methods of Influence:
Refusing to supply goods if payment terms are unmet.
Renegotiating contracts to secure better terms.
Publicly criticizing unethical business practices.
government / regulators affect on business
Objectives: Compliance with laws, economic growth, and ethical operations.
Methods of Influence:
Imposing regulations, fines, or taxes.
Offering incentives like grants or subsidies for desired behaviors.
Conducting audits or investigations.
local community affect on business behaviour
Objectives: Employment opportunities, environmental protection, and community investment.
Methods of Influence:
Protesting against harmful practices.
Petitioning for changes in operations.
Partnering with the business for community development projects.
pressure groups - affect on business behaviour
Objectives: Promote specific ethical, environmental, or social issues.
Methods of Influence:
Organizing campaigns or protests.
Using media to expose business practices.
Lobbying governments to introduce stricter regulations.
competitors - affect on business behaviour
Objectives: Fair competition and market leadership.
Methods of Influence:
Innovating to outperform competitors.
Reporting anti-competitive practices to regulators.
Engaging in marketing campaigns to sway customer preference.
5.3 how businesses respond to the different and sometimes
conflicting objectives of different stakeholders
Business response includes:
- the degree of influence individual stakeholders
possess is likely to determine how businesses
respond to the individual stakeholder’s objectives - conflict resolution and conflict management of
stakeholder objectives - the benefits and drawbacks of meeting
stakeholder needs.
5.3 how businesses respond to the different and sometimes
conflicting objectives of different stakeholders
Communication
Hold meetings or gather feedback to understand stakeholder concerns.
Corporate Social Responsibility (CSR)
Adopt ethical practices, like reducing environmental impact.
Negotiation
Find a middle ground, e.g., balancing fair wages with profit goals.
Adapting Practices
Change operations to meet demands, e.g., use renewable energy.
Prioritization
Focus on the most powerful or urgent stakeholders, e.g., government regulations.
Transparency
Share information openly, like sustainability reports.
Collaboration
Work with stakeholders on mutual goals, e.g., community projects.
consequences of not listening to stakeholders
Damaged Reputation
Negative publicity from unhappy stakeholders (e.g., customers, communities).
Loss of Customers
Customers may switch to competitors if needs aren’t met.
Employee Issues
Strikes, low morale, or high turnover.
Legal Penalties
Fines or sanctions from ignoring regulations.
Decreased Profits
Poor decisions lead to reduced revenue or increased costs.
Community Opposition
Protests or boycotts from local groups or pressure organizations.
Weakened Stakeholder Relationships
Loss of trust impacts long-term success.
