UNIT 1. Chapter 5: Stakeholders in a business

Question 1

Def. Stakeholders

Answer 1

People of groups of people who can be affected by, and therefore have interest in any action in the organisation.

Question 2

Def. Stakeholder concept

Answer 2

It is the view that businesses and their managers have responsibilities to a wise range of groups, not just shareholders.

Question 3

Who are the stakeholders? (7)

Answer 3

• Customers
• Suppliers
• Employees
• Local community
• Government
• Focus Groups
• Shareholders

Question 4

What are the customer’s roles, rights and responsibilities? (2 2 2)

Answer 4

Roles:
• Purchase goods and services
• Provide revenue from sales

Rights:
• To receive goods and services that meet laws regarding health, safety and performance
• To be offered replacements, repairs, or compensation if the service/good fails (depends on the good or service).

Responsibilities:
• Not to steal
• Not to make false claims of for e.g poor service

Question 5

What are the suppliers’ roles, rights and responsibilities? (1 2 1)

Answer 5

Roles:
• Supply goods or services

Rights:
• To be paid on time
• To be treated fairly by the business e.g not put lower pricing

Responsibilities:
• To supply in the time and condition as laid down by the business

Question 6

What are the employees’ roles, rights and responsibilities? (1 3 3)

Answer 6

Roles:
• Provide manual and other labour services to the business

Rights:
• To be treated above the minimum limits as established by the law
• To be treated and paid by the employment contract
• To be allowed to join trade union (in most countries)

Responsibilities:
• To be honest
• To meet the conditions and requirements of the employment contract
• To cooperate

Question 7

What are the local community’s roles, rights and responsibilities? (1 2 1)

Answer 7

Roles:
• To provide local services and infrastructure

Rights:
• To be consulted about major changes that affect it e.g changing methods of production
• Not to have health affected by the business’s activities

Responsibilities:
• To cooperate when reasonable

Question 8

What are the government’s roles, rights and responsibilities? (3 1 3)

Answer 8

Roles:
• Passes laws that restrain some business activities
• Provides law and order to allow legal business activities
• Achieve economic stability to encourage business activity.

Rights:
• Businesses have to meet all the legal constraints and pay taxes

Responsibilities:
• To treat all businesses equally
• To prevent unfair competition
• To establish good trading links for international trade

Question 9

Benefits of accepting responsibilities to:
• Customers
• Suppliers
• Employees
• Local Community
• Government

Answer 9

• Customers: Consumer loyalty, Repeat purchases, Good publicity
• Suppliers: Supplier loyalty- will meet deadlines and give reasonable pricing
• Employees: Employee loyalty, low labour turnover, employee contribution, improved motivation
• Local community: Local councils will give permission to some activities.
• Government: Receiving planning permission, Receiving valuable government contracts.