![➔ Anyone interested or affected by a project or
business.
External Stakeholders:
● Customers
● Suppliers
● Employees, including managers and their families
● Local communities
● Government and government agencies
● Special interest groups (pressure groups)
● Lenders
Internal Stakeholders
● Owners (shareholders in a limited company)
● managers
● other employees
Stakeholder Vs Shareholder
[Table 5.1]
Stakeholder](https://image.slidesharecdn.com/stakeholdersinbusiness-240624171919-e26765d0/85/Stakeholders-in-business-pptx-IGCSE-business-studies-2-320.jpg)
![● Shareholder concept - to increase value for the
shareholders
● Stakeholder concept -
○ many people are affected by company’s actions
○ So stakeholders should also be considered
[Table 5.2]
Business accountability to stakeholders and how
stakeholder aims impact business decision
Aim: To increase CSR
Responsibility to:
● Customers
● Suppliers
● Employees
● local community
● government
Importance and
influence of
stakeholders on
business
activities](https://image.slidesharecdn.com/stakeholdersinbusiness-240624171919-e26765d0/85/Stakeholders-in-business-pptx-IGCSE-business-studies-3-320.jpg)
Stakeholders in business.pptx IGCSE business studies
- 2. ➔ Anyone interested or affected by a project or business. External Stakeholders: ● Customers ● Suppliers ● Employees, including managers and their families ● Local communities ● Government and government agencies ● Special interest groups (pressure groups) ● Lenders Internal Stakeholders ● Owners (shareholders in a limited company) ● managers ● other employees Stakeholder Vs Shareholder [Table 5.1] Stakeholder
- 3. ● Shareholder concept - to increase value for the shareholders ● Stakeholder concept - ○ many people are affected by company’s actions ○ So stakeholders should also be considered [Table 5.2] Business accountability to stakeholders and how stakeholder aims impact business decision Aim: To increase CSR Responsibility to: ● Customers ● Suppliers ● Employees ● local community ● government Importance and influence of stakeholders on business activities
- 4. Responsibilities to customers: ● Customer satisfaction is crucial ● Product quality and design ● Reasonable prices ● Follow laws ● Fair treatment ● Benefits of responsibility ○ Customer loyalty ○ Repeat purchases ○ Good publicity ○ Valuable feedback Responsibilities to suppliers ● Importance of supplier quality ● Reliability matters ● Clear communication ● Mutual satisfaction ● Long-term contracts ● Benefits ○ Supplier loyalty ○ Better credit terms ○ Meeting deadlines Business accountability to stakeholders and how stakeholder aims impact business decision
- 5. Responsibilities to employees ● Meeting legal obligations ● Additional responsibilities ○ Training opportunities ○ Job security ○ Fair pay ○ Good working conditions ○ Involvement in decision-making ● Benefits ● Employee loyalty ● Low turnover ● Recruiting good workers ● Efficiency improvements ● Motivation boost ● Effective communication Business accountability to stakeholders and how stakeholder aims impact business decision
- 6. Responsibilities to local community ● Importance of meeting community responsibilities ● Examples of community-focused decisions ○ Offering secure employment ○ Using local suppliers ○ Reducing environmental impact ● Benefits ○ Approval for business expansion ○ Contracts with community-involved businesses ○ Acceptance of negative effects ○ Financial support for community Business accountability to stakeholders and how stakeholder aims impact business decision
- 7. Responsibilities to government ● Meeting legal responsibilities ● Paying taxes on time ● Accurate completion of forms ● Seeking export markets ● Benefits ○ Good relations with government ○ Valuable government contracts ○ Approval for subsidies ○ Award of licences Business accountability to stakeholders and how stakeholder aims impact business decision
- 8. Conflicts of stakeholder aims: ● Shareholder concept prioritizes shareholder interests over others. ● Stakeholder approach seeks to balance interests for long-term shareholder benefit. Dealing with conflicts: ● Compromise often necessary to address conflicting stakeholder demands. ● Examples include gradual factory closures and adjusting plans for community protection. Establishing priorities: ● Senior management decides which stakeholders are most crucial in each situation. ● Considerations include extra costs, potential revenue loss, and overall impact on the business. Conflicts arising from different stakeholder aims
- 9. ● Changing corporate objectives: ○ Directors or senior managers may need to alter company goals due to the evolving business environment. ○ Impact on stakeholders can be significant. ● Examples: ○ Volkswagen's transition: ○ Initially aimed to lead in diesel engines but faced 'Dieselgate' scandal. ○ Shifted focus to electric cars, requiring heavy investment and closure of diesel factories. ○ The Body Shop's adjustment: ○ Emphasized social and environmental change but faced tough trading conditions. ○ Shifted focus to cost-cutting by closing some shops for survival and profitability, contradicting original objectives. ● Stakeholder impacts: ○ Employees: Job losses due to changes in objectives. ○ Customers: Reduced choice or availability of products/services. ○ Owners: Potential safeguarding of returns in the future. ○ Lenders: Reassurance of action to prevent losses or improve reputation, ensuring loan repayment. Impact on stakeholders of changing business objectives
- 10. Other Examples: McDonald's Health Initiative: Previous Objective: McDonald's primarily focused on offering fast food items with minimal emphasis on health. Change in Objective: Responding to increasing health concerns and changing consumer preferences, McDonald's introduced healthier menu options like salads, wraps, and fruit options. Impact on Stakeholders: ● Customers: Improved health outcomes. ● Community: Positive impact on local economies Impact on stakeholders of changing business objectives