1.5 Stakeholders in Business Flashcards

All 21 cards in this deck

Name four stakeholder groups of a business.

Any four of: owners (shareholders), employees, customers, suppliers, the local community, the government.

Give one reason the government would want a small business to be successful.

Any one of: it collects more tax from the business's profits; more people are employed.

What does the local community want as a stakeholder of a business?

Local jobs, and as little environmental impact as possible, such as traffic, noise and pollution.

Give one possible conflict between owners and employees.

Any one of: employees press for higher pay, which raises costs and lowers the owners' profit; owners cut jobs or change working practices to reduce costs, threatening employees' job security.

Give one way shareholders can have an impact on a business.

Any one of: push objectives towards profit so they receive high dividends; vote on major business decisions; provide further investment for expansion.

How can customers influence a business's objectives?

They can buy elsewhere if prices rise or quality falls, so the business must keep prices low and quality high to keep sales.

Which stakeholder group usually has the most influence over a business's objectives, and why?

Its owners (the shareholders in a company), because they control the decisions the business makes.

Give one way a business can deal with a conflict between two stakeholder groups.

Any one of: give priority to the group whose support the business most depends on; reach a compromise so that each group gets part of what it wants.

What is a business stakeholder?

Any individual or group with an interest in, or affected by, the activities of a business.

What is the main objective of shareholders (owners) as stakeholders?

A good return on their investment — profit, dividends and a rising value of the business.

What do employees want as stakeholders of a business?

Job security, fair pay, good working conditions and chances for promotion/training.

Give two things customers want as stakeholders of a business.

Any two of: value for money (a fair price), good-quality products, a choice of products, good customer service.

What do suppliers want as stakeholders of a business?

Regular orders and to be paid in full and on time.

What is the difference between an internal and an external stakeholder?

Internal stakeholders are inside the business (owners, employees); external stakeholders are outside it (customers, suppliers, government, local community).

Give one likely impact on a business of a customer boycott.

Any one of: a worse reputation; lower sales; reduced profit.

How does switching to more ethical (but more expensive) suppliers affect shareholders?

Higher costs lead to lower profits, so less is available to pay as dividends and the share value may fall.

Give one impact on a business of failing to meet shareholders' profit objective.

Any one of: there is less money for expansion, so growth is delayed; investors may sell their shares or stop investing.

Give two ways the government can affect business activity.

Any two of: changing taxes; giving grants to businesses; changing laws, such as minimum pay rates; spending on projects such as roads and railways.

How can employees affect a business's decisions?

By objecting to changes, e.g. going on strike over pay, staffing levels or working patterns, which can stop the business operating and force it to change its plans.

How can the local community affect a business's plans?

By opposing them, e.g. objecting to the council, which can force the business to change its plans or drop them.

Give one way a growing business benefits its stakeholders.

Any one of: more jobs for local people; more orders for suppliers; more tax for the government; more choice for customers; higher profit for the owners.