Stakeholders Flashcards
All 10 cards in this deck
What is a stakeholder?
Any person, group of people or other organisation that has an interest in the activities of a business.
True or false? Only people inside a business, such as owners and employees, can be stakeholders.
False. External groups such as customers, suppliers, the local community, competitors, lenders and the government are stakeholders too.
State one main objective of a business's owners/shareholders.
High dividend payments (also profit, a higher share price, or survival).
State one main objective of a business's employees.
Maximising their pay (also job security or promotion).
State one main objective of the local community as a stakeholder.
Minimising the environmental impact of the business (also jobs for local people).
What are the steps to explain a conflict between shareholders' profit objective and another stakeholder group?
e.g. a business wants to increase its profit
- Name a different stakeholder group: suppliers.
- State their objective: a fair price and payment on time.
- Link the two: shareholders will try to pay suppliers as little as possible for goods, so suppliers earn less.
State one benefit and one drawback for the local community when a business expands.
Benefit: more employment opportunities. Drawback: increased traffic congestion or noise.
State one way customers can influence a business and its objectives.
Through their purchasing decisions — choosing to buy or not buy, giving feedback and recommending the business to others.
True or false? Employees have no way of influencing a business's activities.
False. Employees have limited influence on decisions but can refuse to work (strike) or reduce the quality of their work.
What are the steps to evaluate which stakeholder group is most affected by a business decision?
e.g. a supermarket closes one of its stores
- Name the stakeholders affected: employees, customers, local community, suppliers.
- Compare how large and how long-lasting each impact is: employees lose their jobs; customers can shop elsewhere.
- Give a justified judgement: employees are most affected as they lose their income.