unit 1 stakeholders and their effects on the business

Question 1

what are stakeholders

Answer 1

A stakeholder is anyone with an interest in a business. Stakeholders are individuals, groups or organisations that are affected by the activity of the business

Question 2

Owners / Shareholders

Answer 2

Owners who are interested in how much profit the business makes.

Question 3

Managers

Answer 3

Managers who are concerned about their salary.

Question 4

Workers / employees

Answer 4

Workers who want to earn high wages and keep their jobs.

Question 5

Customers

Answer 5

Customers who want the business to produce quality products at reasonable prices.

Question 6

Suppliers

Answer 6

Suppliers who want the business to continue to buy their products.

Question 7

Lenders / bank

Answer 7

Lenders who want to be repaid on time and in full.

Question 8

The community

Answer 8

The community which has a stake in the business as employers of local people. Business activity also affects the local environment. For example, noisy night-time deliveries or a smelly factory would be unpopular with local residents.

Question 9

Internal stakeholders

Answer 9

Internal stakeholders are groups within a business - eg owners and workers.

Question 10

External stakeholders

Answer 10

External stakeholders are groups outside a business - eg the community.

Question 11

Government

Answer 11

Government who want firms to do well in order to be able to raise and collect taxes from them.

Question 12

Owners and shareholders as stakeholders

Answer 12

Owners/stakeholders have a big say in how the aims of the business are decided, but other groups also have an influence over decision making. For example, the directors who manage the day-to-day affairs of a company may decide to make make higher sales a top priority rather than profits.

Question 13

Managers as stakeholders

Answer 13

Managers influence a business everyday by the decisions they make. This could include what products and services to offer and who to hire or fire. Managers implement company policy and formulate strategy which affects the running and profit-making ability of a business.

Question 14

Employees as stakeholders

Answer 14

Employees can influence the success of an organisation by their productivity and efficiency in the job, duties and tasks they do everyday. They can also resort to industrial action if they disagree with working conditions, pay or company policies. This could take the form of work to rule, bans on overtime, sit-ins or in extreme cases withdrawal of labour (a strike).

Question 15

Suppliers as stakeholders

Answer 15

Suppliers can decide whether to raise prices for orders which can obviously affect a firm’s profits. Also a supplier’s reliability could affect production. If orders do not arrive on time finished goods may not be ready for shipping to customers. Suppliers can also change credit terms which may have cash flow issues for a company and they could decide whether or not to allow discounts for bulk orders or loyal customers.

Question 16

Government as stakeholders

Answer 16

Government can influence a firm by introducing new laws that can affect operations such as the National Minimum Wage, or they can raise Corporation Tax which would eat into a firm’s profits.

Question 17

Customers as stakeholders

Answer 17

Customers can influence a business by deciding to continue to purchase goods and services from the organisation. They can choose to take their custom elsewhere.

Question 18

Banks as stakeholders

Answer 18

Banks influence a firm by permitting or denying loans or overdrafts to companies. They can also charge different interest rates on borrowings.

Question 19

Local Community as stakeholders

Answer 19

Local Community can influence a business by petitioning against building or planning permissions for new developments.