Ch 5 Stakeholders

Question 1

What are stakeholders?

Answer 1

People or groups of people that are affected by and therefore have an interest in any action by an organisation

Question 2

Who are the stakeholders?

Answer 2

• Customers
• Suppliers
• Employees
• Local community
• Government
• Managers/Owners

Question 3

What is the role of customers?

Answer 3

Purchase goods and services => provide revenues for the business

Question 4

What are the rights of customers?

Answer 4

• To receive goods and services that meet laws regarding health and safety, design and performance
• To be offered replacements, repairs and compensation in the event of failure of the product or service

Question 5

What are the responsibilities of customers?

Answer 5

• To be honest and pay for goods bought or services received
• Not to steal
• Not to make false claims about poor service or product

Question 6

What is the role of the supplier?

Answer 6

Supply goods and services to allow the business to offer its products to its own customers

Question 7

What are the rights of the supplier?

Answer 7

• To be paid on time (either laid down by law or service agreement)
• To be treated fairly (not to have lower prices forced on it)

Question 8

What are the responsibilities of the supplier?

Answer 8

To supply goods and services in the time and condition as laid down by the purchase contract

Question 9

What is the role of employees?

Answer 9

Provide manual and other labour services to the business to allow goods and services to be provided to customers

Question 10

What are the rights of the employees?

Answer 10

• To be treated within the minimum limits as established by the national law
• To be treated and paid in the ways described in the employment contract
• To be allowed to join the trade union

Question 11

What are the responsibilities of employees?

Answer 11

• To be honest
• To meet the conditions and requirements of the employment contract
• To cooperate with managers
• To observe ethical code of conduct

Question 12

What is the role of the local community?

Answer 12

Provides local services and infrastructure to the business to allow it to operate, produce, sell within legal limits

Question 13

What are the rights of the local community?

Answer 13

• To be consulted about major changes that affect it

- Not to have the community badly affected by the business’ activities

Question 14

What are the responsibilities of the local community?

Answer 14

• To cooperate with the business, on where to built on, expansions and other plans
• To meet reasonable requests from business for local services. e.g. public transport

Question 15

What is the role of the government?

Answer 15

• Passes laws that restrain aspects of business activity

- Provides law and order to allow legal business activity to take place

Question 16

What are the rights of the government?

Answer 16

Businesses have the duty to meet all legal constraints such as producing legal goods and pay taxes on time

Question 17

What are the responsibilities of the government?

Answer 17

• To treat businesses equally under the law
• To prevent unfair competition that could damage business survival chances
• To establish good trading links with other countries to allow international trade

Question 18

What are the possible business decision that might affect the stakeholders?

Answer 18

• Large expansion of the business. e.g. building new office or factory
• Take over of a competing firm
• Significant application of IT into production methods

Question 19

What are the possible impacts on employees of large expansion of business?

Answer 19

• More jobs and career opportunities

- Disruption during building and more complex lines of communication after expansion

Question 20

What are the possible impacts on the local community of large expansion of business?

Answer 20

• More jobs for locals
• Wipe out local businesses
• Disruption caused by increased traffic and loss of greenfield sites, pollution

Question 21

What are the possible impacts on the customers of large expansion of business?

Answer 21

• Better service might be provided due to an increase in size and staff
• Larger business could be less personal and therefore offer inferior customer service

Question 22

What are the possible impacts on the employees of horizontal integration (take over a competing firm)?

Answer 22

• Larger business may be more secure and offer career promotion and opportunities
• Rationalisation may occur to avoid waste and cut costs => jobs might be lost

Question 23

What are the possible impacts on the local community of horizontal integration (take over a competing firm)?

Answer 23

• Expansion leads to increase in employment
• Rationalisation of duplicated offices or factories might lead to some closures of job losses
• Wipe out local businesses

Question 24

What are the possible impacts on the customers of horizontal integration (take over a competing firm)?

Answer 24

Larger business mean that they might benefit from economies of scale => costs of products are cheaper
- Reduced competition => less customer choice => higher prices

Question 25

What are the possible impacts on the employees of changing the production methods using technology?

Answer 25

- Training and promotion opportunities might be offered | - Automation => redundancy

Question 26

What are the possible impacts on the customers of changing the production methods using technology?

Answer 26

- Standardisation of products, no human errors => improve quality and may offer more product variety

Question 27

Benefits of accepting responsibilities to customers

Answer 27

- Customer loyalty - Repeated purchases - Word of mouth

Question 28

Benefits of accepting responsibilities to suppliers

Answer 28

- Supplier loyalty - Requests for special orders - Reasonable credit terms more likely to be offered

Question 29

Benefits of accepting responsibilities to local community

Answer 29

- More likely to give planning permission | - More likely to accept negative effects

Question 30

Benefits of accepting responsibilities to government

Answer 30

- Receiving planning permission - Receive valuable government contracts - Requests for subsidies