3.4 Shareholders vs stakeholders

Question 1

Stakeholder

Answer 1

Individuals or groups that are affected by or affect the actions of a business.

Question 2

Internal stakeholders

Answer 2

Individuals or groups inside the business.

Question 3

Examples of Internal stakeholders

Answer 3

Employees
Managers and directors
Business Owners

Question 4

External stakeholders

Answer 4

Individuals or groups outside of a business.

Question 5

Examples of External stakeholders

Answer 5

Customers
Shareholders
Suppliers

Question 6

Owner objective

Answer 6

Wants profit and for business to succeed.

Question 7

Employees objective

Answer 7

Job security and to be compensated fairly.

Question 8

Management objective

Answer 8

Meet company’s goals and objectives and maximise profits while minimising costs.

Question 9

Customers objective

Answer 9

Recieve high quality products or services at fair prices.

Question 10

Shareholders objective

Answer 10

Maximise a high return on investment.

Question 11

Suppliers objective

Answer 11

For businesses to pay what they owe and establish long term arrangements.

Question 12

Stakeholder approach

Answer 12

Focuses on interdependencies between stakeholders and ensure benefits and drawbacks of operation are shared equally.

Question 13

Stakeholder approach problem

Answer 13

Decrease profits as competing stakeholders needs will increase costs.

Question 14

Shareholder approach

Answer 14

Focused on meeting the needs of shareholders.

Question 15

How can a business meet the needs of a shareholder

Answer 15

Maximising profits to increase dividends and improve share price.

Question 16

How can it harm employees if a business faces financial difficulties?

Answer 16

Employees may face job losses or pay cuts.

Question 17

How can it impact shareholders if a business is profitable?

Answer 17

Shareholders may benefit from increased dividends.

Question 18

what can customers be affected by?

Answer 18

Product availability

Question 19

How can customers influence pricing?

Answer 19

Through purchasing decisions and feedback.

Question 20

How can employees impact business activity?

Answer 20

Through their productivity

Question 21

How do shareholders impact businesses?

Answer 21

Through investment decisions

Question 22

Conflict between shareholders and employees

Answer 22

Employees want higher wages which reduces profits.
Shareholders aim to maximise profit to get highest return.

Question 23

Conflict between shareholders and customers

Answer 23

Customers aim for fairer prices.
Shareholders demand profits so businesses increase profits.

Question 24

Conflict between shareholders and management

Answer 24

Management may retain profit instead of giving it to shareholders.

Question 25

Conflict between shareholders and government

Answer 25

Government wants businesses to create good quality jobs. Shareholders dont care about job creation and focus on profits.