Topic 2 Stakeholders Flashcards
What is a stakeholder.
A stakeholder is an individual, group or organistaion that has an interest or concern in the activities or performance of an organisation. Stakeholders can affect, or be affected, either positively or negatively, by the organisation
List as many stakeholders as you can.
Employees, customers, suppliers, investors, workers/employees, suppliers, owners, shareholders…
Who are the internal stakeholders of a business?
Owner, shareholders, managers, employees
What are the interest of the owner?
Profit focus - maximum return. Livelihood. Success. Reputation
What are the interests of the shareholders?
Part owners of a limited company. Investment – shares – dividend. Do not take part in the management of a business but attend the Annual General Meeting (AGM) and vote of the Board of Directors
What are the interests of the managers and employees?
Fair wage/salary. Good working conditions. Job security. Training and development. Career progression
Give an example of a conflict of interests between the internal stakeholders
Owners/Shareholders are profit focused, the more they have to pay their employees/managers the less profit they will make.
What is a share?
One of the equal parts into which a company’s capital is divided, entitling the holder to a proportion of the profits
What is a dividend?
A sum of money paid regularly (typically annually) by a company to its shareholders out of its profit
Who are the external stakeholders?
Competitors, suppliers, consumers, financial institutions, trade unions and the local communities
What are the interests of competitors?
Price. Products. Quality. Service. Growth
What are the interests of suppliers?
Financial stability.
Prompt payment.
Continued regular orders.
Fair deal
What are the interests of consumers?
Competitive prices.
Good range of products.
Quality.
Customer service.
Good reputation
What are the interests of financial institutions?
Financial stability.
Ability to meet repayments.
Sound business plans
What are the interests of trade unions?
Fair treatment of workers.
Negotiate a wage/salary at least in line with inflation. Good working conditions.
Job security
What are the interests of the local communities?
Corporate social responsibility.
Noise reduction.
Traffic Congestion.
Opening hours.
Care for the environment.
Community involvement
Explain why the following conflicts between stakeholders might exist: Job creation/job losses
Owners/board of directors will need to make decisions about creating/axing jobs depending on the market demand for their product in order to ensure the profitability of their business.
Explain why the following conflicts between stakeholders might exist: changes to working conditions
Unions/Government/Employess may want changes in working conditions that might take away from profitability of a company.
Explain why the following conflicts between stakeholders might exist: profit distribution
The profit of company may need to be invested back into a company for one reason or another which reduces the amount of money that a owner/stakeholder receives.
Explain why the following conflicts between stakeholders might exist: new government legislation
Government may e.g. restrict trading hours which would then limit the hours a business can trade/employees can work/consumers can make purchases!
Explain why the following conflicts between stakeholders might exist: environmental threats
To make a site for a business land may need to be cleared. Business may create more traffic increasing pollution. Waste disposal may be an issue depending on the business
Why are consumers stake holders?
Consumers will support it if it supplies goods/services at suitable prices. They also have an interest in seeing that a business succeeds because they have a greater number of firms to deal with which improves the competition and the variety of goods/services on offer.
Why are producers/suppliers stake holders?
Producers/suppliers do not want to lose any of their customers but want to ensure that they are prosperous and able to pay their accounts. Producers are rewarded by high levels of sales which add to the profits of their own businesses.
What are trade unions?
Organisation which represents the interests of the workers of a business and negotiates with management on their behalf. They ensure the safety of its member’s jobs. If the business loses profits or fails altogether, it will have to make workers redundant. Those workers would then depend on the trade union to try to save their jobs or find them work elsewhere.
