2.3 The Role and Importance of Stakeholders (AQA A Level Business): Flashcards
Exam code: 7132
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Define a stakeholder.
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Cards in this collection (40)
Define a stakeholder.
A stakeholder is an individual or group that affects or is affected by the actions of a business.
What is the difference between internal and external stakeholders?
Internal stakeholders are inside the business (employees, managers, owners); external stakeholders are outside it (customers, suppliers, government).
Name the three internal stakeholder groups.
Employees, managers/directors, and business owners.
What is the main objective of employees as stakeholders?
To earn a fair wage, have job security, and work in a safe environment.
What is the main objective of managers as stakeholders?
To meet the company's goals, maximise profits and minimise costs while operating efficiently.
What do business owners want as stakeholders?
An income, a share of the profit, and for the business to succeed.
Name three external stakeholder groups.
Customers, shareholders, suppliers/creditors, the local community, the government, or pressure groups (any three).
What do customers want as stakeholders?
High-quality products at a fair price, with good customer service.
What is the main objective of shareholders?
To maximise their return on investment (profit).
A business must consider the needs and interests of its stakeholders to ensure long-term .
A business must consider the needs and interests of its stakeholders to ensure long-term success.
True or False?
Shareholders are an internal stakeholder group.
False.
Shareholders are external stakeholders; owners, managers and employees are internal.
True or False?
The government wants businesses to operate within the law and contribute to the economy.
True.
The government aims to promote the public good, wanting firms to operate within the law and support the economy.
Define stakeholder mapping.
Stakeholder mapping identifies and analyses stakeholders by their level of interest and degree of power, to choose the right management strategy.
What two dimensions does stakeholder mapping use?
Level of interest and degree of power.
How should a business treat stakeholders with low power and low interest?
Minimal effort — their needs can usually be given the least attention.
How should a business treat stakeholders with high interest but low power?
Keep them informed (e.g. a newsletter) to give a sense of belonging — e.g. the local community.
How should a business treat stakeholders with high power but low interest?
Keep them satisfied and acknowledge their power — e.g. the media.
How should a business treat stakeholders with high power and high interest?
Treat them as key players — fully inform and satisfy them — e.g. shareholders and employees.
Stakeholders with high power and high interest are known as key .
Stakeholders with high power and high interest are known as key players.
Group C stakeholders have low interest but high power, so the business must keep them .
Group C stakeholders have low interest but high power, so the business must keep them satisfied.
Why can even low-power, low-interest stakeholders sometimes matter?
The growth of social media means their concerns can be amplified more successfully than before.
Give an example of a 'keep informed' stakeholder for a major construction project.
Local residents worried about traffic or house prices — kept informed via newsletters and drop-in sessions.
True or False?
The media is usually treated as a 'keep satisfied' stakeholder.
True.
The media has high power but low interest, so businesses keep it 'onside' via press events.
True or False?
Stakeholder mapping helps a business prioritise its stakeholder strategies.
True.
By plotting power against interest, it helps a business prioritise how to manage each group.
What is the purpose of stakeholder mapping?
To help a business identify appropriate strategies for managing relationships with different stakeholders.
What is stakeholder conflict?
When stakeholder groups have conflicting interests, creating tensions a business must balance.
Give an example of conflicting stakeholder interests.
Shareholders may want profit maximisation, while employees want fair pay and customers want low prices.
A firm may invest in costly environmental technology to satisfy the local community, but this can reduce and upset shareholders.
A firm may invest in costly environmental technology to satisfy the local community, but this can reduce profitability and upset shareholders.
Name two internal factors that influence stakeholder relationships.
Leadership style, aims and objectives, business size, and business ownership (any two).
Name two external factors that influence stakeholder relationships.
Stakeholder group power, market conditions, government policy, social change, and technological change (any two).
How does business size influence stakeholder relationships?
Small firms talk to stakeholders one-to-one; large firms need formal systems that can feel less personal.
Define stakeholder engagement.
Stakeholder engagement is the planned, ongoing process of informing, listening to and working with those affected by a business's decisions.
Name two approaches to stakeholder engagement.
Partnership, participation, consultation, push communication, and pull communication (any two).
What is the 'partnership' approach to stakeholder engagement?
The business and stakeholders share decision-making and responsibility, building strong long-term trust.
What is the difference between push and pull communication?
Push: the company sends out information (one-way); Pull: information is made available for stakeholders to access when they choose.
Stakeholder engagement aims to improve with stakeholder groups.
Stakeholder engagement aims to improve relationships with stakeholder groups.
True or False?
Stakeholder conflict is simply a difference of opinion.
False.
Conflict is about clashing aims — e.g. a takeover pleasing shareholders but worrying employees — not just opinions.
True or False?
A consultative leadership style tends to strengthen stakeholder relationships.
True.
A consultative style invites dialogue; an autocratic style can shut voices out.
How can government policy influence stakeholder relationships?
New laws, taxes or subsidies can add pressure or open opportunities — e.g. the Plastic Packaging Tax pleasing eco-activists but worrying suppliers.
Give one drawback of the 'push communication' approach.
It can cause information overload or be missed if people ignore the messages.
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