Stakeholders

Question 1

Define the term stakeholder

Answer 1

• Stakeholders are individuals or groups with an interest in the business.
• The level of interest each stakeholder group has depends on the type of business.

Question 2

Stakeholders examples

Answer 2

• Investors
• Employees
• Owners
• Shareholders
• Local communities
• Suppliers
• Government
• Trade unions
• Partners
• Customers

Question 3

How does a business have an impact on its stakeholders?

Answer 3

• The success of the business will affect the number of people employed and how much they earn
• The values of the owners and managers will affect how well treated the employees are and how much attention is given to their quality of life at work and their future careers - investment in training etc
• Likely to affect local community, congestion and investment etc
• The way a business treats its suppliers will affect success, do they pay on time? Fair price? Positive relationships or competition between suppliers?
• The success of the business will affect share price and the dividends that get paid out to shareholders
• A business may try and reduce the amount of tax it pays (legally), may decided to pay what it regards as a fair amount of tax even if it could Payless - affecting government revenue

Question 4

How can stakeholders affect a business?

Answer 4

• Negotiation - employees for better pay, suppliers for better prices
• Direct action - employees on strike, customers not buying products
• Refusal to cooperate - local councils refusing to accept planning permission
• Refusal to cooperate - employees could resist change and stop working hard
• Voting - owners get the opportunity to vote which makes their views clear

Question 5

When dealing with stakeholders, a business might think about…

Answer 5

• How they’re communicating
• Does it need to keep them informed?
• If so, how should they do this? Email, meetings, newsletters etc
• Should they involve certain stakeholders in certain decisions when necessary?