Booklet 4 : Stakeholder Groups

Question 1

Define a stakeholders, and explain the difference between a internal and external stakeholder (4)

Answer 1

A stakeholder is anyone who has an interest in the business which could be a group, organisation or person. (2)

An internal stakeholder exists within the business (e.g owners, shareholders, directors and employees) whereas an external stakeholder exists outside the business (e.g customers, lenders, suppliers and creditors) (2)

Question 2

What is a supplier interested in the business (2)

Answer 2

A supplier wants a business to ensure regular payments, regular orders (long-term contracts) and fair prices (2)

Question 3

What is a creditor interested in a business (2)

Answer 3

A creditor wants full and regular payments on agreed dates and a profitable business to ensure money owed can be paid back (2)

Question 4

What is a lender interested in a business (2)

Answer 4

A lender wants a valuable asset base, excellent credit rating and repayments on time (2)

Question 5

What does a pressure group want from a business (2)

Answer 5

Pressure groups want to be listened to, ensure fair treatment of employees and challenge the behaviour of a business (2)

Question 6

What does a local community want from a business (2)

Answer 6

Local communities want secure jobs in the local area to contribute towards the economy, avoidance of noise and air pollution and facilities for locals (2)

Question 7

What does the government want from a business (2)

Answer 7

Governments want business to create employment so they can charge tax and uphold corporate laws by paying at least minimum wage (2)

Question 8

What does a shareholder want from a business (2)

Answer 8

A shareholder wants investment return from dividends, share prices increasing and business profit increasing (2)

Question 9

Outline four advantages of social media for business and stakeholder groups (4)

Answer 9

1. Increased customer awareness - provides information about new and existing products
2. It can help market research- surveys can be posted online in order to find out what consumers want
3. Customers can contact the business - customers can contact the business about any concerns or recommendations
4. Reduced advertising costs - it is easier to advertise on social media than other methods

Question 10

Outline four disadvantages of social media for business and stakeholder groups (4)

Answer 10

1. Cost - usually a business needs IT Support in order to regularly keep pages updated and respond to customers
2. Stakeholders can leave negative feedback - this affects the corporate image of the business
3. Doesn’t reach all customers - not all potential customers will use social media e.g elderly people
4. There is many different forms of social media - it is hard to update all social media platforms