Stakeholders in a business 1.5

Question 1

Define the term “Stakeholders”

Answer 1

Stakeholders are people or groups of people who can be affected by any action taken by an organization.

Question 2

Define the term “Stakeholder Concept”

Answer 2

The term “stakeholder concept” refers to the view that businesses and their manages have responsibilities to a wide range of groups and not just their shareholders.

Question 3

What are the main stakeholders of a business?

Answer 3

• Owners/Shareholders
• Customers
• Suppliers
• Employees
• Local communities
• Government and government agencies
• Special interest groups
• Lenders

Question 4

What are the roles of customers?

Answer 4

1. To purchase goods and services
2. To provide revenue from sales, this allows the business to function and expand.

Question 5

What are the rights of customers?

Answer 5

1. To receive goods and services that meet local laws regarding health and safety, design, performance and so on.
2. To be offered replacements, repairs, or compensation in the event of the good/service fails to at least the minimum levels laid down by law.

Question 6

What is the role of suppliers?

Answer 6

To supply the business with goods and services to allow the business to offer its own products to its own customers.

Question 7

What are the rights of suppliers?

Answer 7

1. To be paid on time, as laid down by either law or by a service agreement between the business and the supplier.
2. To be treated fairly.

Question 8

What is the role of employees?

Answer 8

To provide manual and other labor services to the business all in accordance to their employment contract.

Question 9

What are the rights of an empolyee?

Answer 9

1. To be treated within the minimum limits established by national law.
2. To be treated and paid in accordance to the employment contract.
3. To be allowed to join a trade union (IN MOST COUNTRIES)

Question 10

What is the role of the local community?

Answer 10

To provide local services and infrastructure to the business to allow it to operate, produce, and sell within legal limits.

Question 11

What are the rights of the local community?

Answer 11

1. To be consulted about major changes that affect them.
2. Not to be negatively impacted by the business’s activities.

Question 12

What are the roles of the government?

Answer 12

1. To pass laws that restrain many aspects of business activity.
2. To provide law and order to allow legal business activity to take place.
3. Achieve economic stability to encourage business activity.

Question 13

What is the right of the government?

Answer 13

Businesses have the duty to meet all legal constraints, such as producing legal goods, and paying taxes on time.

Question 14

What is the role of lenders?

Answer 14

To provide finance to the business in different forms

Question 15

What are the rights of lenders?

Answer 15

1. To be repaid on time.
2. To be paid finance charges.

Question 16

List the internal stakeholder groups.

Answer 16

• Owners
• Managers
• Employees

Question 17

List the external stakeholder groups.

Answer 17

• Customers
• Suppliers
• Local communities
• Government
• Lenders
• Special interest groups

Question 18

Distinguish between the shareholder concept and the stakeholder concept.

Answer 18

The shareholder concept focuses on maximizing returns to individuals or institutions that own shares in a limited company. Whereas the stakeholder concept considers the interests of all parties affected by a company’s actions.