Product life cycle

Question 1

What are the two types of stakeholders?

Answer 1

Internal and external

Question 2

Why are employees internal stakeholders?

Answer 2

They are affected by the decisions made by the busienss in terms of salaries and wages, recruitment policies and job security

Question 3

Why are suppliers external stakeholders?

Answer 3

Affected by the decisions made by the business in terms of order quantities and payment terms

Question 4

What type of stakeholders are customers?

Answer 4

External

Question 5

How can businesses manage their relationship with stakeholders?

Answer 5

Using communication and consultation
Communication can be used to share information, for example through emails and newsletters to allow them to remain informed of develpoments within the business
Consultation can investigate the views and feelings of stakeholders so they feel involved in any decisions made by the business, though tthe power of stakeholders to change decisions is limited as the business defines the stakeholdeer’s influence

Question 6

What power do stakeholders have?

Answer 6

Different levels of power and interest and a business must consider this power and interest when deciding how to manage their relationship
Business may ensure certain stakeholder groups remain satisfied and this may require consultation instead of communication

Question 7

Draw the stakeholder map

Answer 7

Low interest, low influence = Monitor
Low interest, high influence = Keep satisified
High interest, low influence = Keep informed
High interest, high influence = Manage closely

Question 8

Stakeholder map: High power and high interest management

Answer 8

Manage closely and consultation may be appropriate for these individuals and groups

Question 9

Stakeholder map: High power and low interest management

Answer 9

Kept satified as they have the power to influence the busienss if they become dissatisfied

Question 10

Stakeholder map: Low power and low interest management

Answer 10

Monitored though they lack influence and interest in many business decisions

Question 11

Stakeholder map: Low power and high interest management

Answer 11

Kept informed and consultation may be appropriate

Question 12

Influences on a business’ relationship with stakeholders

Answer 12

Power
Influence
Expertise and skill level of staff - Employer may wish to consult with staff if they are able to contribute their expertise to a decision being made
Business’ performance - Poor financial performance may require the business to build a stronger relationship with customers and suppliers so more favourable payment terms can be negotiated