Stakeholder (CH 3)

Question 1

What is a Stakeholder?

Answer 1

Someone who has an interest in a business

Question 2

Primary Stakeholders (internal)

Answer 2

• Employees
• Owners
• Clients
• Directors
• Shareholders

Question 3

Secondary Stakeholders (External)

Answer 3

• Govt (Central, Local)
• Consumer
• Customer
• Local community
• Suppliers
• Regulators
• Competitors

Question 4

What is an Economic Agent?

Answer 4

All groups of people and organisations that are involved in economic activity and take decisions that affect how resources are used

Question 5

What is a shareholder?

Answer 5

Someone who has a share in a business

Question 6

Stakeholder Conflict E.g 1

Answer 6

It is hard to make sure costs are kept at their lowest in order to maximise profits if
employees are demanding higher wages

Question 7

Stakeholder Conflict E.g 2

Answer 7

When an owner of a firm sells shares, they lose some of the control they had over
the firm. This could result in conflicting objectives between different stakeholders in the firm. If the manager is particularly good, they might require higher wages to
keep them in the firm. However, they also need to keep shareholders happy, since
they are an important source of investment. It is not always possible to give both the
manager a high salary and the shareholders large dividends, since funds are limited.