shareholders VS stakeholders Flashcards
what is a stakeholder?
anyone who has an interest in the business, or who may be affected by the activities of a business
what would a shareholder want from the business? (objective)
dividends
what would customers want from the business?
high quality goods at cheap prices
what would the local community want from the business?
jobs, investment in infrastructure, and good ethics
what would managers want from the business?
they would want success and would want to be meeting aims for profit
what would employees want from the business?
good pay/benefits
what would suppliers want from the business?
on time payments, and long term contracts
what would the government want from the business?
tax payment and creation of jobs
what stakeholders are within a business?
- shareholders
- customers
- local community
- managers/owners
- employees
- suppliers
- government
what influence do lenders have on the business?
they could influence the success of the business, as they could turn down a loan or increase interest rates. which could make raising money for the business more difficult
what influence do customers have on the business?
the business’ success depends on demand and the sales of their product
what influence do managers/owners have on the business?
poor communication could delay aims/ objective being achieved
what influence do shareholders have on the business?
they influence the financing a business gets, and large investors could lead to a takeover
what influence does the local community have on the business?
they could protest and create negative media attention
what influence do employees have on the business?
if they’re not following what needs to be done, it could delay the aims that need to be reached, for example, customer service
what influence do suppliers have on the business?
if they increase the price of supplies/quality decreases and they need to be reliable and ensure all goods are delivered on time
what influence does the government have on the business?
they could increase tax payments, or they could increase, decrease or remove tariffs, and they can introduce new legislation (e.g sugar tax/wages)
what are internal stakeholders?
stakeholders that work within the business, e.g managers and employees
what are external stakeholders?
stakeholders outside a business that are interested in its activities, for example, customers, local community and suppliers
what is the stakeholder approach?
when a business will take into account other stakeholders when making decisions for the business
what is the shareholder approach?
when the business thinks about maximising profits in order to maximise dividends, only thinking about shareholders
what could be a conflict between shareholders and employees?
employees: demand higher wages and better working conditions - comes at a cost for business
shareholders: demand more dividends - higher wages to employees would have a negative impact on dividends
what could be a conflict between shareholder and customers?
if a business increases their prices, it would be good for the shareholders as they gain more dividends, but customers wouldn’t be happy as it would lead to them having to pay more - less purchasing power
what could be a conflict between shareholders and directors/managers?
there could be conflict when managers begin to prioritise their own aims/objectives, like maximising renumeration over the interests of shareholders
conflict between shareholder and government
tax evasion/avoidance and power
