Stakeholders Flashcards
What is meant by a stakeholder
Someone who has an interest in the business
Internal and external stakeholders of a business
Internal - Employees and the owner
External - Local Community, customers, governement
Objectives of stakeholders
shareholders and owners want to ensure the business is successful and are interested in how much profit the business can make
managers want a good salary and opportunities for further career progression
employees want good levels of pay, job satisfaction and job security, and may also be interested in career progression
customers want good quality and a range of products at reasonable prices
suppliers want to receive payments on time, and regular orders
the local community (people living in the area) may be looking for work, which local businesses can provide
pressure groups want to increase knowledge of their cause, eg if a business is going to increase traffic pollution in their area
the government wants businesses to create more jobs in order to raise more money from taxes and save money on benefit payments
Conflicts between difference stakeholder groups
Employees want good levels of pay whereas managers want to maximise profits and minimise costs meaning that the costs would fall and pay rises wouldn’t occur
Why a business needs to manage the conflicting objectives of its stakeholders
They want all stakeholders to be happy, if not then reputation may fall
Evaluate the impact on a business of different stakeholders having conflicting objectives
Delayed decision-making: If stakeholders have conflicting objectives, decision-making can be delayed as they try to negotiate and compromise on a course of action.
Reduced investment: Conflicting objectives can lead to uncertainty, which can reduce the willingness of stakeholders to invest in the business.
Negative publicity: If stakeholders with conflicting objectives publicly criticize the business or each other, it can damage the business’s reputation and lead to negative publicity.
Decreased morale: Conflicting objectives can create confusion and a lack of direction, which can lower morale among employees.
Decreased efficiency: Conflicting objectives can lead to a lack of focus and direction, which can decrease efficiency and productivity.
Recommend and justify how a business should deal with conflicting objectives of stakeholders
Identify the stakeholder objectives and then analyse the importance of these to see which are more important.
Focus on long term objectives and make decisions that are in the best interest of the company. The overall success should be the main objective.
Consider External Factors: Businesses should also consider external factors, such as legal and regulatory requirements, when making decisions that impact stakeholders. Compliance with laws and regulations can help to mitigate conflicts and ensure that the business operates in an ethical and responsible manner.
How the influence different stakeholders have on a business including its aims and objectives, decision making, behaviour and performance
Customers are essential stakeholders for any business, as they provide the revenue and sales that keep the business afloat. Customers can influence a business’s aims and objectives by demanding better quality products or services
Employees are critical stakeholders, as they are responsible for delivering the products or services that the business offers. They can influence a business’s aims and objectives by providing feedback on how to improve products,
Shareholders are investors who have a financial interest in the business. They can influence a business’s aims and objectives by setting financial targets
Suppliers are essential stakeholders who provide the resources and materials that a business needs to operate. They can influence a business’s aims and objectives by setting pricing
Government: Government regulations can significantly impact a business’s aims and objectives, decision-making, behaviour, and performance. Regulations can dictate how a business operates
Impact and importance of joint ventures to a business and its stakeholders
Access to new markets
Shared knowledge and resources
Risk Sharing
Competitive Advantage
Improved Relationships
Impact and importance of a strategic alliance to a business and its stakeholders
Access to new customers
Risk Sharing
Shared Expertise
Improved advantage
Competitive advantage
