topic 7 - stakeholders Flashcards
describe a stakeholder
a stakeholder is an individual or group of people who have an interest in the success or an organisation.
describe internal stakeholder
internal stakeholders are from within the organisation i.e. owners (or shareholders), managers and employees.
describe external shareholders
external stakeholders are form outside the organisation, such as government, banks customers, supplier, pressure groups and HMRC (the government organisation responsible for collecting taxes.
state the interest and influence of owners
interest - profits in order to see a return on their investment.
influence - can invest more money and can make important decisions.
state the interest and influence of managers
interest - may be given bonuses, pay rises or promotions based on the organisations performance.
influence - can make decisions
state the interest and influence of employees
interest - want job security and perhaps a pay rise.
influence - can affect standard of work and can take industrial action.
state the interest and influence of customers
interest - demand a quality product/service and value for money.
influence - can take their custom elsewhere or could spread good/bad words to others.
state the interest and influence of suppliers
interest - want continued business and businesses to pay its debts.
influence - can change prices and can adjust the quality of suppliers. Could also change account terms.
describe conflict of interest
although all stakeholders want a business to succeed, they can often conflict in their individual aims. In other words, two stakeholders both cannot get what they want at the same time.
example for conflict between employees and owners/managers
employees want to get a pay rise, whereas owners want to maximise profits. If employees get a pay rise it will lower the amount of profits the owner will receive.
example for conflict between customers and owners/management
customers want low prices and value for money, whereas owners want to raise prices to maximise profits and meet their own objectives. Businesses and customer ‘meet in the middle’, known as the equilibrium price.
example for conflict between suppliers and owners/management
suppliers want to be paid as soon as possible ideally in cash, whereas the owners want trade credit to keep good cash flow in the business. Suppliers and owners can also disagree on the prices of product discounts, quality of supplies, delivery time and so on.
example for conflict between government or owners/managers
governments may want to introduce legislation to improve society: however, owners may disagree with the legislation as it will impact negatively on their business.
describe interdependence between stakeholders
stakeholders need to work together if the business is to succeed. Some stakeholder groups rely on others to help them achieve their interests.
describe the interdependence between owner/management and governments
owners/managers need governments to make good decisions, such as lowering taxes to improve the spending power of customers and therefore sales, while governments need owners to create jobs.
describe the interdependence between owners/managers and suppliers
managers need suppliers to provide quality raw materials to improve the quality of the finished product, while suppliers need managers to keep buying from them and keep them in business.
describe the interdependence between owners/managers and customers
owners need customers to buy their products and customers need a good quality of product and customer service from the owners of the business.
describe the interdependence between owners and employees
owners need employees to perform to their best to increase sales and profits through work rate or customer service while employees need owners to make good decisions to keep the business profitable and their jobs safe.
describe the interdependence between managers and employees
employees and managers need to work together to help the business to succeed in order to keep their jobs secure.
