Stakeholders Flashcards
What are stakeholders?
Anyone who has a vested interest in the activities and decision making of a business.
Do stakeholders own the business?
No, stakeholders have an interest but do not own the business.
What is a shareholder?
A shareholder owns the business.
How do shareholders benefit?
Shareholders benefit primarily from increases in the value of the business.
Who can be considered stakeholders?
Banks, finance providers, managers, employees, trade unions, competitors, and media.
What are internal stakeholders?
Internal stakeholders are individuals or groups within a business, including employees and shareholders/owners.
What are connected stakeholders?
Connected stakeholders are those linked by a contractual relationship, such as creditors, suppliers, and customers.
What are external stakeholders?
External stakeholders are individuals or groups not bound by a legal contract, including competitors, government, and society.
What is stakeholder engagement?
Stakeholder engagement involves incorporating the needs of stakeholders into the decision-making process, allowing firms to benefit from cooperation and fulfill social responsibility.
How to manage relationships with different stakeholders?
Managing relationships with different stakeholders involves effective communication and consultation.
What are internal business objectives?
Company pursuing objectives would give them high priorities.
Social objectives may include needs of stakeholders, but profit maximizing firms may not consider stakeholders.
How do management styles affect stakeholder consideration?
Production focused managers are less likely to consider the wellbeing of stakeholders, such as employees.
Managers looking at the wider picture would be concerned with meeting stakeholder needs.
How does the size and ownership of a business impact communication with stakeholders?
For small businesses, it is easy to communicate with stakeholders.
A sole trader will know and liaise with stakeholders personally, while a large public limited company has a different structure.
What pressure does the Board of Directors (BoD) face in large companies?
The BoD is under pressure to maximize profit, therefore may ignore the needs of stakeholders.
What are the external: Market decisions
→ level of sales, rate when they are changing, numbers + strength of competition.
→ A business facing intense competition may engage more closely with stakeholders to establish a good reputation.
