U3AOS1 - Stakeholders

Question 1

What are stakeholders?

Answer 1

Stakeholders are people and groups that interact with the business and have a vested interest (stake) in its activities

Question 2

What is a vested interest?

Answer 2

Special interest for particular reasons

Question 3

What is the internal environment?

Answer 3

Within the business, controlled by the business
E.g.
- Owners
- Employees
- Shareholders
- Management
- Directors

Question 4

What is the external environment?

Answer 4

Outside the business, beyond full control of business
E.g.
- Government
- Competitors
- Interest groups
- Customers
- Suppliers
- Members of the community

Question 5

What are owners?

Answer 5

People or groups with financial investment in the business
Vested Interest – financial gain, reputation, risk of debt liability

Question 6

What are shareholders?

Answer 6

Part owners of company
Vested Interest – return on investment, dividends, financial security

Question 7

What are directors?

Answer 7

Have overall responsibility for managing the company’s business activities
Vested Interest – legal responsibilities, share options, remuneration, reputation

Question 8

What is management?

Answer 8

People responsible for achieving the objectives of the business, often with competing interests
Vested Interest – remuneration & benefits, social responsibility, reputation, profit tied to performance

Question 9

What are employees?

Answer 9

People who work for the business – vital to operations
Vested Interest – job security, pay and conditions, job satisfaction

Question 10

What is the government?

Answer 10

Has the authority to govern a community, including law making (federal, state, local)
Vested Interest – regulate business activity, encourage expansion (more jobs!), taxation

Question 11

What are competitors?

Answer 11

Other businesses that offer similar goods and services
Vested Interest – competitive advantage, market share, innovation

Question 12

What are interest groups?

Answer 12

Organisations that attempt to directly influence business decisions
Vested Interests:
Unions – pay and conditions, OH&S, job security
Consumer Groups – product safety, packaging, pricing, advertising
Lobby Groups – environment, civil liberties, youth unemployment…

Question 13

What are customers?

Answer 13

People who purchase goods and services
Vested Interest – price, quality, social responsibility, preferences

Question 14

What are suppliers?

Answer 14

Organisations that provide resources to make goods or provide service
Vested Interest – prompt payment, social responsibility

Question 15

What are members of the community?

Answer 15

Citizens of the local areas in which the business operates
Vested interest – operating hours, environment, support for community groups

Question 16

What is corporate social responsibility (CSR)?

Answer 16

Obligations of a business, over and above its legal responsibilities, to the wellbeing of:
- Employees
- Customers
- Shareholders
- Community
- Environment

Question 17

What is stakeholder engagement?

Answer 17

Refers to businesses sharing information with and seeking input from stakeholders, and involving them in decision-making.
Businesses anticipate that:
- by discovering the social and environmental issues that are important to their stakeholders, the business is more likely to act in a socially responsible manner.
- a positive image will be maintained if all stakeholders have their expectations satisfied.