Stakeholders

Question 1

Describe the term stakeholder.

Answer 1

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

Question 2

LIst the different stakeholders groups:

Answer 2

Owners Workers

• Customers -Suppliers
• Local community -Government

Question 3

What is the objective for customers?

Answer 3

To get value for money, have a good service and useful and accurate information on the product.

Question 4

What is the objective for employee?

Answer 4

To be given safe work conditions, secure jobs and higher earnings.

Question 5

What is the objective for government?

Answer 5

Taxes paid (income/corporation), growth, legal behavior .

Question 6

What is the objective for shareholder?

Answer 6

To be paid regular and high dividends and share price.

Question 7

What is the objective for the local community?

Answer 7

Local jobs, minimise environmental impact on the community (little pollution or congestion, investment in the community).

Question 8

What is the objective for suppliers?

Answer 8

Paid on time, kept informed of any changes to the business - e.g. reduced output.

Question 9

How does a business have an impact on its stakeholders?

Answer 9

• 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 employees are and how much attention is given to the quality of their life at work and their future careers - invest in training etc
• 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 pay less - affecting government revenue

Question 10

How can stakeholders influence a business?

Answer 10

• Negotiation - employees for better pay, suppliers for better terms and conditions
• Direct action - customers stop buying products, employees going on strike
• Refusal to cooperate - local councils can refuse to cooperate with a business if it doesn’t like its behaviour - refuse planning permission
• Refusal to cooperate - employees could resist any changes that the owners suggest and could show they are unhappy by not working hard
• Voting - owners of a business can make their views clear and can vote on what the organisation should do next

Question 11

When dealing with stakeholders, a business may think about:

Answer 11

-How it communicates with stakeholders
-Does it need to keep them informed
If so how should they do this? - newsletters, organise meetings (AGM)
-Should it involve different stakeholder groups in decisions when necessary?