3.4.3 Shareholders vs stakeholders

Question 1

Define a stakeholder?

Answer 1

person/group who can affect or be affected by the organisations actions or objectives

Question 2

What are the 3 internal stakeholders?

Answer 2

Business owners
Managers
Employees

Question 3

What are the 7 external stakeholders?

Answer 3

Shareholders
customers
suppliers
government 
community 
environment 
creditors

Question 4

What is the objective of shareholders?

Answer 4

maximise share value

Question 5

What is the objective of employees?

Answer 5

higher wages

Question 6

What is the objective of managers?

Answer 6

higher profit

Question 7

What is the objective of customers?

Answer 7

fair price and quality product

Question 8

What is the objective of suppliers?

Answer 8

long-term contract

Question 9

What is the objective of government?

Answer 9

pay taxes

Question 10

What is the objective of environment?

Answer 10

be ethical

Question 11

What is the objective of local community?

Answer 11

rise in employment

Question 12

What is the stakeholder influences-stakeholder approach?

Answer 12

business takes interest of other stakeholders and considers their view when running from and making decisions

Question 13

What is the stakeholder influences-shareholder approach?

Answer 13

business makes as much money as possible without breaking the law - main objective is to maximise dividends for shareholders

Question 14

What is the potential conflict between employees and shareholders?

Answer 14

employees want higher wages yet shareholders want higher dividends

Question 15

What is the potential conflict between customer and shareholders?

Answer 15

customers want low price yet shareholders want prices to be increased

Question 16

What is the potential conflict between directors and shareholders?

Answer 16

directors want benefits and rewards, yet shareholders want to try and maximise their dividends