Stakeholders

Question 1

What is a Stakeholder?

Answer 1

• A person or party with interest in the success of a business

Question 2

What are Internal Stakeholders?

Answer 2

• Are found within the business

- Are the Owners, Employees and managers

Question 3

What are External Stakeholders?

Answer 3

• Are suppliers, customers and the lenders

Question 4

What sort of Issues are there with the Business & Stakeholder relationship?

Answer 4

• Which stakeholders are the most important
• How the different Stakeholder groups may perceive change
• The extent which Stakeholders regard the business as a sucess

Question 5

Evaluative point for Stakeholder sucess

Answer 5

• Some stakeholders may not benefit from business success

- If they do they will not benefit equally.

Question 6

Stakeholder Objective - Owners

Answer 6

• Owners want the best possible return for the money they have invested in the business
• Want to see the business grow as these returns increase

Question 7

How would a business pursue growth in the short run??

Answer 7

• Lowering Prices
• Hopefully captures more of the market and customers become loyal in the long run.
• However; this tactic reduces profits

Question 8

Stakeholder Objectives - Employees

Answer 8

• Want high wages, bonuses and job security

- Want managers to organize their work so it is interesting and employees get job satisfaction

Question 9

Stakeholder Objectives - Customers

Answer 9

• Customers want the best quality product for the lowest prices
• Want product innovation
• Good customer services
• Consumers can be dissatisfied by the ethics of the products and stop buying from this store, if many people do this they can have a significant effect on a business.

Question 10

Stakeholder Objectives - Suppliers

Answer 10

• If a business ceases trading, suppliers lose a customer
• Wants repeat customers
• Wants business growth so orders increase and debts are paid quickly
• Businesses can drop suppliers to drop costs but breaks loyalty, so if the business approaches these suppliers again they may reject their offers.

Question 11

Stakeholder Objectives - Lender

Answer 11

• A bank wants the agreed amount owed at the agreed time

Question 12

Stakeholder Objectives - The Community (Positive effects of a business)

Answer 12

• Business brings jobs and greater spending power to the community
• Cause property prices to rise and crime rates to fall
• Actively involved in local charities

Question 13

What are the positive factors a business brings to a community called?

Answer 13

External Factors

Question 14

What are the negative factors a business brings to a community called?

Answer 14

External Costs (business doesn’t directly do this) / Social Costs

Question 15

What are some of the external costs a business brings to a local community?

Answer 15

• Continuous deliveries means that there is more road congestion, greater pollution and noise pollution
• Property prices fall

Question 16

What are Social Benefits and Social Costs?

Answer 16

• Refer to the overall business benefits / costs to society that are involved.

Question 17

How are Social Benefits calculated?

Answer 17

Private Benefits (to the firm) + External Benefits (to society)

Question 18

How are Social Costs calculated?

Answer 18

Private Costs (to firm) + External Benefits (to Society)

Question 19

Stakeholder Objectives - Government

Answer 19

• If business is succeeding it is offering more jobs
• Government pays less social security benefits, and get increased tax revenue from the employees and business
• If a business exports it will grow the UK’s trading position