Unit 1 - 1.4 Stakeholders

Question 1

Stakeholder

Answer 1

Any individual, group or organisation with a direct interest in and/or is affected by the activities and performance of a business
* can be external or internal

Question 2

Internal stakeholders (3)

Answer 2

Members of the organisation (directly affected)
* managers and directors
* employees
* shareholders

Question 3

Employees as internal stakeholders (def. + interest)

Answer 3

Work directly for the organisation
* Interests:
* pay and financial benefits
* working conditions
* job security
* opportunities for career progression

Question 4

Managers and directors as internal stakeholders (def. + interests)

Answer 4

Managers: people who oversee daily operations
Directors: who direct business operations on behalf of shareholders
* Interests:
* profit maximisation
* job security and financial benefits
* long-term financial health

Question 5

Shareholders as internal stakeholders (def. + interests)

Answer 5

Powerful stakeholder group due to voting rights
* Interests:
* maximise dividends
* achieve capital gain in the value of shares

Question 6

External stakeholders (6)

Answer 6

Who do not form part of a business but have direct interest in it and are affected by its activities and performance (can vary between organisations)
* customers
* suppliers
* pressure groups
* competitors
* government
* financiers

Question 7

Customers as external stakeholders (def. + interest)

Answer 7

Customer care is instrumental to the survival of a business
* Generally interested in:
* quality of goods and services
* price/value for money

Question 8

Suppliers as external stakeholders (def. + interest)

Answer 8

Provide stocks of raw materials needed for production
* Interest:
* clients who pay on time
* regular contacts with clients
* good working relationships with clients

Question 9

Financiers as external stakeholders (def. + interest)

Answer 9

Financial institutions and individual investors who provide sources of finance for a firm whilst earning money through interest on borrowings
* Interest:
* ability of a firm to repay debts from generating sufficient profits
* establishing long-term relationships with firms

Question 10

Pressure groups as external stakeholders (def.)

Answer 10

Consist of individuals with a common interest who seek to place demands on organisations to influence change in behaviour

Question 11

Competitors as external stakeholders (def. + interest)

Answer 11

Rival businesses of an organisation
* Interest:
* innovation that arises from rivalry
* responding to competitive threats
* performance benchmarking

Question 12

Benchmarking

Answer 12

Comparison by a standard (usually by functional group)

Question 13

Government as an external stakeholder (def. + interest)

Answer 13

Creation and enforcement of laws and regulations
* Interest:
* public benefit
* profit gained from taxes

Question 14

Stakeholder conflict

Answer 14

The inability of an organisation to meet all of its stakeholder objectives simultaneously
* due to differences in the varying needs of all its stakeholder groups

Question 15

Three issues to be considered when resolving stakeholder conflict

Answer 15

• type of organisation
• organisational aims and objectives
• source and dregree of power (influence) of each stakeholder

Question 16

Uber - stakeholders Case study

Answer 16

Offer ride-hailing, food delivery and other transportation services by engaging drivers as independent contractors
* Stakeholders: drivers, users, shareholders, rival transportation groups, governments

Question 17

Uber and Lyft - stakeholder conflict case study

Answer 17

Refusal to make independent contractors into employees