The Role And Importance Of Stakeholders

Question 1

What is a stakeholder?

Answer 1

A stakeholder is someone who is affected by/ has interest in an organisation

Question 2

Who are some examples of stakeholders?

Answer 2

-shareholders
-owners
-employees
-customers
-suppliers
-local communities
-government
-banks
-media

Question 3

What is a primary stakeholder?

Answer 3

-primary stakeholders are people who are affected by a particular business activity. E.g to increase production. They include employees, creditors or anyone else who has a functional or financial interest in the business

Question 4

What is a creditor?

Answer 4

-a creditor is someone you owe money to

Question 5

What is a secondary stakeholders?

Answer 5

-secondary stakeholders do not have direct functional or financial relationship with the business, although they are affected by/ can influence its actions.e.g media, local community

Question 6

What is a corporate social responsibility (CSR)?

Answer 6

• a corporate social responsibility is the duties a firm has towards its stakeholders

Question 7

What are ways a firm can be socially responsible towards a shareholder?

Answer 7

-good dividends
-increase profit to increase share price
-discount if they are a customer

Question 8

What are ways a firm can be socially responsible towards employees?

Answer 8

-profit sharing
-bonus
-payed above minimum wage
-job security
-fringe benefits
-above industry average holidays

Question 9

What are ways a firm can be socially responsible towards customers?

Answer 9

-good customer service
-good returns policy
-value for money
-fast delivery

Question 10

What are ways a firm can be
Socially responsible towards suppliers?

Answer 10

-on time payment
-bulk purchases
-pay a fair price
-signing long term contacts

Question 11

What are ways a firm can be socially responsible towards the local community?

Answer 11

-low pollution- both environmental and noise
-reduce congestion
-sponsor local community events
-facilities

Question 12

What is stakeholder mapping?

Answer 12

-it is difficult to meet the needs of different stakeholders
-stakeholder mapping helps managers decide whether to consult/ involve a group in a decision or simply inform them of it

Question 13

What does a stakeholder map consists of?

Answer 13

• axis are power and interest in business and either low or high

Question 14

What do you do with a stakeholder that is high power low interest?

Answer 14

-keep satisfied
-participation

Question 15

What do you do with a stakeholder that is low power low interest?

Answer 15

-minimal effort
-pull communication or push communication

Question 16

What do you do with a stakeholder that is low power high interest?

Answer 16

-keep informed
-consultation

Question 17

What do you do with a stakeholder that is high power high interest?

Answer 17

-key player
-manage closely
-partnership

Question 18

What is stakeholder engagement?

Answer 18

Stakeholder engagement is communicating with and involving stakeholders in decisions

Question 20

What is a partnership in stakeholder management?

Answer 20

Partnership: involves the stakeholders group closely in the decision. Decisions may be taken jointly and the actions will be implemented jointly. Responsibility will be shared and there will be a lot of 2 way communication. E.g a major construction project may involve its main supplier jointly in planning and construction to use their expertise
-used for high power high interest stakeholders

Question 21

What is participation?

Answer 21

Participation: it is a lesser form or partnership. Stakeholders are still involved in decisions. They may have responsibility for part of the activity and may implement part of it. e.g a major customer involved in the design stage of a new product
-it is used for high power low interest stakeholders

Question 22

What is consultation in stakeholder management?

Answer 22

Consultation: finding out the hides of the relevant stakeholder group. Stakeholders have limited power and influence decisions. A firm building new homes in an area might consult residence on some issues( only the less controversial issues)
-this is used for stakeholders with low power, high interest

Question 23

What is ‘push’ communication?

Answer 23

‘Push’ communication: one way communication from the business to the relevant stakeholder group eg email, podcast, letters. Eg a restaurant informing residents of its intention to have later opening hours
-this is used for low power stakeholders with more interest

Question 24

What is ‘pull’ communication?

Answer 24

-‘pull’ communication: communication with stakeholder groups but only if they choose to engage with the business and access communication
-used with low power low interest stakeholders

Question 25

What are some firms doing to be socially responsible and what is Facebook accused of?

Answer 25

-some big firms have suspended advertising on some social media platforms in response to hate speech. Including Starbucks, Coca Cola and Unilever to help high interest high power customers -Facebook in particular is accused of not doing enough to stop hate speech and disinformation

Question 26

How does Amazon use stakeholder mapping?

Answer 26

-The Amazon prime service ,which ensures quicker delivery led to Amazon sales increasing by 25% to £8.8 billion in 2017. -customers= high power high interest are managed closely -workers have poor working conditions and low pay- labelled as human robots- Amazon employs over 500,000 people worldwide -raised wages to $15 an hour in USA - employees= low power and medium interest- keep informed - competitors/ community=low power low interest- minimum effort -shareholders=low power high interest- keep informed -amazon shares cost $2 in 1997 -in September 2018 share prices raised a peak of £2000a share -dividend payments are slim as they reinvest more -government= medium power and growing interest- keep satisfied

Question 27

What is sports directs shareholder conflict?

Answer 27

Management and employees and over 90% of employees at sports direct are on 0 hour contracts so have insecure jobs but they are cheap for management