stakeholders

Question 1

Explain the role of shareholders in a business and how a shareholder might benefit from holding shares.

Answer 1

• Shareholders are part-owners in the business.
• The shares they own is called equity.
• The more shares they own, the bigger their share of the business.

Question 2

managers interest?

Answer 2

Managers have an interest in a business doing well so that they get promoted, win bonuses and have job security.

Question 3

managers influence?

Answer 3

• Planning the objectives
• Making decisions – operational, tactical and strategic.

Question 4

employee interest?

Answer 4

Employees have an interest in a business doing well so that they have job security, higher pay, improved working conditions.

Question 5

employee influence?

Answer 5

• By increasing or decreasing productivity.
• By providing good or bad customer service.
• By going on strike or taking other industrial action.

Question 6

customer interest?

Answer 6

Customers have an interest in a business doing well so that they benefit from quality goods and services, low prices and value for money.

Question 7

customer influence?

Answer 7

• By increasing or decreasing the amount of goods or services they buy from the company
• Customers will show loyalty to a business they like.

Question 8

bank interest?

Answer 8

Banks want the business to do well so that loans are paid in full and on time.

Question 9

bank influence?

Answer 9

Banks can influence how a business operates by giving or denying loans, changing interest rates on loans, changing repayment terms.

Question 10

government interest

Answer 10

Governments have an interest in a business doing well so that they receive corporation tax on the profits made by organisations.

Question 11

government influence

Answer 11

Governments can influence how a business operates by raising or lowering rates of corporation tax. Government can change laws affecting businesses, such as legal minimum wage.

Question 12

supplier interest

Answer 12

Suppliers have an interest in a business doing well so that they receive regular orders from their customers, and so they receive prompt payment.

Question 13

supplier influence?

Answer 13

Suppliers can influence how a business operates by:

• raising or lowering the price of goods
• changing credit terms
• changing delivery times
• altering the quality of their goods/materials

Question 14

local community interest

Answer 14

• They bring jobs to the area and regular income through employment
• They can help to ensure a good environment to live in

Question 15

local community influence?

Answer 15

Local communities can influence how a business operates by protesting and petitioning if unhappy at an organisation’s conduct.

Question 16

example of conflicts

Answer 16

1. Shareholders/managers seek high profits which conflicts with employee demand for higher wages.
2. Managers may want to pay for goods later to improve cash flow whereas the suppliers will want payment as soon as possible to protect their own cash flow.
3. Managers want the highest profit possible on sales whereas customers want low prices for high quality goods.
4. Shareholders want high dividends whereas customers want low prices.