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Stakeholder
LC Business
| Question | Answer |
|---|---|
| Q1: Who are stakeholders | A: People/groups affected by or affecting a business |
| Q2: What are the two main types of stakeholders | A: Internal and external |
| Q4: Name internal stakeholders | A: Entrepreneurs, owners, employers, employees, managers, directors, shareholders |
| Q5: Name external stakeholders | A: Banks, state agencies, suppliers, consumers, local community, government, trade unions, trade associations, interest groups |
| Q6: Employees’ objectives | A: Job security, fair pay, good conditions |
| Q7: Employees’ impact | A: Productivity, innovation, culture, brand ambassadors |
| Q8: Suppliers’ objectives | A: Fair contracts, timely payments, loyalty |
| Q9: Suppliers’ impact | A: Quality, cost, delivery, business continuity |
| Q10: Consumers’ objectives | A: Quality, safety, fair price, timely delivery, honest ads |
| Q11: Consumers’ impact | A: Revenue, feedback, brand reputation |
| Q12: Local community’s objectives | A: Jobs, ethics, sustainability, economic support |
| Q13: Local community’s impact | A: Customers, workforce, reputation, sustainability |
| Q14: Government’s objectives | A: Jobs, taxes, compliance, stability |
| Q15: Government’s impact | A: Laws, infrastructure, economy |
| Q17: Types of stakeholder relationships | A: Competitive, Co-operative, Dynamic, Dependent |
| Q18: Effect of 10% pay rise | A: Employees: morale ↑; Shareholders: profits ↓; Managers: mixed; Consumers: price ↑ or quality ↓; Suppliers: pressure on prices; Local economy: spending ↑; Government: tax ↑ but profit tax ↓ |
| Q19: How to avoid stakeholder conflict | A: Communication, engagement, compromise, ethics, mapping |
| Q20: How to resolve stakeholder conflict | A: Non-legislative (negotiation) or legislative (laws/courts) |
| Owners | The individuals or entities that have legal ownership of an organisation /business |
| Entrepreneurs | People who use their initiative to spot a gap in the market and take a personal and financial risk by setting up a business in the hopes of making a profit. |
| External Stakeholders | Do not work within a business but are affected by its activities, ie banks, service providers, consumers, local community |
| Stakeholder | an individual or group that has a vested interest in an organisation and can either affect or be affected by that organisation |
| Internal Stakeholders | Individuals and Parties within the organisation, ie employees, employers, board of directors |
| Employers | Hire employees to complete work in return for a wage or salary |
| Employees | Work in a business in return for a wage or salary |
| Managers | People responsible for controlling and running an organisation, system or group of staff |
| Board of directors | the governing body of a company comprised of the most senior manager |
| Investors | Provide capital (finance) for a business, can be internal or external, eg banks, shareholders or government agencies |
| Shareholders | Invest money in a business in return for a dividend (percentage of profit ) |
| Consumers | People who buy goods and services for personal use, rather than for business purposes |
| Local community | The people who live in the area where a business is situated |
| Government | Made up of the elective representatives and administrative bodies responsible for governing |
| Trade Associations | Represent businesses involved in similar types of activities |
| Interest/ pressure groups | Organisations that represent people with a common interest |
| Lobbying | The practice of influencing government decisions by communicating with decision makers or gaining media attention for a certain viewpoint. |
| Objectives of trade associations and interest groups | Influencing decisions/policies in favour of its members |
| Impacts of trade associations and pressure groups | Engage in lobbying, negotiations, legal action or boycotting |
| Objectives of investors | To obtain accurate information in order to make decisions, SH want adequate ROI and a fair dividend |
| Impacts of investors | Provide capital for expansion, start ups, operations, Can influence strategic decisions, Can help attract additional investors |
| What are the elements of a contract? | Agreement, consideration , Capacity to contract, Consent to contract, Intention to contract, legality of form, legality of purpose |
| Agreement (element) | When to or more parties agree to the terms of a contract, it has two parts , Offer and Acceptance |
| Offer | A voluntary promise with conditions made from one party (the offeror) to another (the offeree) |
| Counter- offer | When someone responds to an initial offer with different terms |
| Acceptance | When the offeree agrees to all the terms of the offer without any changes or conditions |
| Consideration | Both parties must give something of value to each other |
| Capacity to contract | Both parties have the legal right to enter into a contract. Eg minors, people of 'unsound mind', people who are bankrupt |
| Consent to contract | The parties entering into the contract must do so of their own free will, eg pressure, misleading terms |
| Intention to contract | Both parties must be aware that they are entering into a legally binding agreement that is enforceable by the courts |
| Legality of form | Some contracts must be drawn up in a certain manner to be considered legally binding, eg hire purchase agreements, and insurance policies |
| Legality of purpose | In order for a contract to be valid it must be for a legal purpose and in full compliance with all laws |
| Methods of terminating a contract | Performance, Agreement, Frustration, Breach |
| Performance | When both parties carry out their duties as required by the contract |
| Agreement (termination ) | When the parties mutually consent to end the contract regardless of whether or not its purpose has been achieved |
| Frustration | When an unforeseen event, (death, global pandemic) prevents a contract from being completed |
| Breach | When one of the parties breaks a condition of the contract |
| Condition of a contract | An essential element of a contract |
| A warranty | A non-essential element of a contract, if there is a breach in warranty the responsible party may need to pay financial compensation but the contract remains in place |
| Remedies for breach of contract | Rescission, Specific Performance, Financial compensation - |
| Rescission | To rescind a contract means that it is cancelled or revoked |
| Specific performance | When a judge orders the contract be completed as originally planned |
| Financial compensation | The monetary compensation received by the aggrieved party for the harm suffered as a result of the breach |
| Stakeholder mapping | Involves identifying important stakeholders, understanding their power and interest and considering different viewpoints |
| Power-interest grids | A method of stakeholder mapping that considers the stakeholders motivations and their ability to exert influence |
| Power | A stakeholders ability to influence business decisions |
| Interest | How much a stakeholder cares about a particular decision |
| High power, low interest | Satisfy, Consult and engage with this group |
| Low power, low interest | Monitor, but don't bore with excessive communication |
| Low Power, High Interest | Inform, keep informed to ensure no major issues arise |
| High Power, High Interest | Prioritise, involve in key projects and decisions, and work to maintain a cooperative relationship with |
| Importance of prioritising stakeholder interests | Improves strategic (long-term ) planning, Ensures that Stakeholders with the most interest are involved in the decisions of a business, Identifies possible areas of conflict before they arise |
| Limitations of power-interest grids | Overly simplistic, subjective open to interpretation |
| Start up stage: Entrepreneur needs | - Capital - Business Plan - Market Research |
| Start up stage: Entrepreneur wants | - Support and advice - Growth Potential |
| Start up stage: Employee needs | - Clear Roles -Adequate remuneration |
| Start up stage: Employee wants | -Career Growth |
| Start up stage: Investor needs | - Potential for ROI -Strong business plan |
| Start up stage: Investor wants | -High returns |
| Start up stage: Consumer needs | - Innovation - Quality product/ service |
| Start up stage: Consumer wants | - Low prices |
| Growth Stage: Entrepreneur needs | -Skilled workforce -Finance |
| Growth Stage: Entrepreneur wants | - Profitability -Market expansion - Support and advice |
| Growth Stage: Employee needs | - Skill development -Job security |
| Growth Stage: Employee wants | -Bonuses -Promotions -Salary/wages increase |
| Growth Stage: Investor needs | - Continued ROI -Information |
| Growth Stage: Investor wants | -Increased dividends |
| Growth Stage: Consumer needs | - Consistent quality - Customer support |
| Growth Stage: Consumers wants | -New features |
| Mature Stage: Entrepreneur needs | - Operational efficiency -Cost control |
| Mature Stage: Entrepreneur wants | -Market dominance -Sustained Revenue |
| Mature Stage: Employee needs | -Fair compensation |
| Mature Stage: Employee wants | -Job satisfaction -Promotions |
| Mature Stage: Investor needs | -Stable returns -Transparency |
| Mature Stage: Investor wants | -High dividends |
| Mature Stage: Consumer needs | -Reliable service |
| Mature Stage: Consumer wants | -Loyalty rewards |
| Renewal/ Exit Stage: Entrepreneur needs | - Succession planning -Exit strategy |
| Renewal/ Exit Stage: Entrepreneur wants | - Legacy preservation |
| Renewal/ Exit Stage: Employee needs | -Clarity on future |
| Renewal/ Exit Stage: Employee wants | -Retention packages -New opportunities |
| Renewal/ Exit Stage: Investor needs | -Clarity on returns -Exit options |
| Renewal/ Exit Stage: Investor wants | -Optimal Exit Valuation -Smooth transition |
| Renewal/ Exit Stage: Consumer needs | -Service continuity -Communication |
| Renewal/ Exit Stage: Consumer wants | -Reassurance |
Created by:
rfitz09
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