1.4 Stakeholders

Question 1

Stakeholder

Answer 1

a person or organization that affects or is affected by a business. Stakeholders are often classified as internal versus external, market versus non-market, or primary versus secondary

Question 2

Internal stakeholder

Answer 2

a stakeholder who is internal to (inside) the business, such as an employee, a manager, or shareholders

Question 3

External stakeholder

Answer 3

a stakeholder who is external to (outside) the business or organization, such as suppliers, customers, government media, or the community. They are not involved directly in the running of an organization.

Question 4

Market stakeholders

Answer 4

those that the organization has a commercial relationship with (that is, “money changes hands”). Market stakeholders include groups such as costumers, suppliers and lenders.

Question 5

Non-market stakeholders

Answer 5

stakeholders with which money does not change hands, like the media or the community

Question 6

Primary stakeholders

Answer 6

those directly affected by or affecting the organization

Question 7

Secondary stakeholders

Answer 7

they have an indirect relationship with the organization. E.g media, government or NGOs

Question 8

examples of internal stakeholders

Answer 8

owners
shareholders
employees
managers

Question 9

examples of external stakeholders

Answer 9

suppliers
costumers
banks
government
local community
pressure groups
media

Question 10

what these internal stakeholders want:
shareholders
employees
managers

Answer 10

shareholders –> receive high dividends and high value of shares
employees –> job security, good levels of pay and working conditions, opportunities for promotion and pay rises
managers –> Want organization to do well and grow to ensure: considered for promotion, ensure their job security and be considered of bonuses for good performance

Question 11

What do these external stakeholders want:
suppliers
costumers
banks
government
local community
pressure groups
media

Answer 11

suppliers –> want regular orders and for businesses costumers to pay on time
costumers –> low prices, high quality, good after sales service
banks –> Want firm to be able to pay its loan and interest repayments on time
government –> Make sure organization follows law, they pay the correct taxes, they provide employment for population
local community –> Wants business to provide jobs for local people and ensure environment is not harmed by noise or pollution
pressure groups –> Put pressure on business to minimize the impact of their activities on the environment or a common concern
media –> Focuses on the firm’s impact in terms of new stories

Question 12

Conflict between stakeholders: employees and owners

Answer 12

Conflict: Owners/ Management cutting jobs in order to reduce production cost (survival/ profit maximisation)
Conflict: Workers are asking for better working conditions but the owners are not addressing or investing on this issue (not included in the budget plan) as they prefer to invest elsewhere

Question 13

Conflict between stakeholders: Owners and government

Answer 13

The aims or views can be conflicted as the governments imposes rules and regulations to ensure safely and ethical behavior, while the owners may find it costly. Taxation is another area of conflict, for the owner it’s main objective is to minimize tax liability to retain more earnings, and for the government it’s objective is to collect enough revenue to fund public services. Also environmental regulations can be very expensive for owners since they have to buy new technology.

Question 14

Conflict between stakeholders: Owners and local community

Answer 14

The community feared the project would contaminate water sources and destroy ecosystems.