stakeholders

Question 1

what are stakeholders?

Answer 1

any individual or group which is affected by the business and so has an interest in its activities

Question 2

1. what are the objectives of a shareholder?
2. what conflicts can shareholders come into?

Answer 2

1. • sustained long term growth
   • capital gain/ growth in income
2. • institutional shareholders are often driven by the need to achieve in the short term
     - this means they require high dividends and strategies to achieve short term growth from the business they have invested in
     - these strategies may be at odds with achieving long term growth through reinvestment of profits and investing in brand value which are what the long term investor may be looking for

Question 3

1. what are the main objectives of directors and managers? (3)
2. what conflicts is there with directors and managers? (3)

Answer 3

1. • long term objectives/ success
   • use resources under their control to achieve maximum benefits for the business
   • gain the most from the assets they manage
2. • for some business the main objective of managers is to protect their position
   • self preservation is sometimes a motivator for middle managers
   • senior managers can also have personal objectives of attempting to maximise their salaries and benefits whilst cutting costs through redundancies and rationalisation

Question 4

1. what are the main objectives of employees/ workers ? (3)
2. what conflicts are there relating to employees and workers ?

Answer 4

1. • job security
   • receive a wage/ fringe benefits
   • job security
2. • many business seek to incorporate technology to reduce the size of the workforce
   • this can lead to industrial action from members of trade unions although it is less common now

Question 5

1. what are the main objectives of customers? (3)
2. what conflicts can arise with customers?

Answer 5

1. • customer satisfaction
   • efficient service
   • quality product at a competitive price
2. • businesses can want to achieve immediate profits in the short term and that comes ahead of long term customer satisfaction
     - customers want to feel respected and needed, some industries slack at maintaining good customer relations such as the banking and financial industry

Question 6

1. what are the main objectives of suppliers? (2)
2. what conflicts can suppliers face?

Answer 6

1. • business success so they can maximise profits
   • a fair price from businesses
2. their power in the market rests on the buyer

Question 7

1. what are the main objectives of the government? (2)
2. what conflicts can the government face?

Answer 7

1. • business success so tax revenue can increase
   • high employment so the government only pays low benefit payments
2. economic success can mean increased pollution, increased traffic and the loss of greenfield sites

Question 8

1. what are the main objectives of the local community? (4)
2. what conflicts can arise with the local community? (2)

Answer 8

1. • economic prosperity
   • employment
   • increased regional wealth
   • improved facilities
2. • businesses that operate close to the local community can involve:
     • pollution
     •environmental damage
     •loss of space

• noise pollution from heavy transport

Question 9

what are the 7 stakeholders?

Answer 9

• shareholders
• directors / managers
• employees
• customers
• suppliers
• government
• local community