Exam code: 7132
Syllabus Edition
First teaching 2023
Last exams 2027
The managers of a business propose to retain all of its profit to finance automation of its production. This is most likely to cause conflict with:
employees and lenders.
employees and shareholders.
lenders and suppliers.
shareholders and suppliers.
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Figure 1 below shows a stakeholder map.
Figure 1: Stakeholder map
For this particular business, which stakeholder group is most likely to influence this business’ management decision-making?
Suppliers
Customers
Shareholders
Employees
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Simply Bake plc
Palm oil is a cheap oil ingredient used in the manufacture of many everyday items. Production of palm oil often involves farmers clearing rainforests. The destruction of this habitat has led to the loss of many animal species, including half of the world’s orangutans.
Powerful campaign groups with many members, such as Greenpeace and the World Wildlife Foundation, have highlighted the issue. As a result, consumers are increasingly aware of the environmental impact of using palm oil.
Simply Bake plc is a supplier of cakes to supermarkets, who then retail them as their ‘own brand’ products. For many years, palm oil has been an important ingredient in Simply Bake plc’s products, allowing it to meet the demand for cheap food.
In 2018, a small campaign group, Action against Palm Oil (APO), criticised Simply Bake plc. APO had carried out a survey using a sample of 100 of its 400 members to represent the views of UK consumers. The survey found that 67% of respondents wanted the government to ban the use of palm oil.
High-profile media campaigns have increasingly drawn attention to the issue of palm oil production. By 2019, supermarkets had noticed increasing numbers of enquiries from their customers about palm oil and environmental damage.
Finding alternative ingredients is difficult and expensive, but in 2020 Simply Bake plc announced that it will have changed all its recipes to remove palm oil by 2025.
Explain how stakeholder mapping would help Simply Bake plc decide how it responds to criticism from APO.
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Fenwick Quarry plans to extend its site, which would increase the number of lorry movements through a nearby village.
Explain why the local community is a stakeholder in Fenwick Quarry.
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Ravenglass Joinery is a family-owned business. The owner works in the workshop alongside eight employees.
Explain one way in which the objectives of the owner and the employees at Ravenglass Joinery might differ.
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Marrowby Dairies supplies milk to a large supermarket chain under a long-term contract at a set price. Its profit margin on the contract is small.
Explain how this contract is likely to affect Marrowby Dairies as a supplier.
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Harlow Leisure is planning a large new resort. Two stakeholder groups have emerged: the local council, which controls planning permission, and residents of a neighbouring village, who have objected in the local press but hold no formal power over the decision.
Analyse how stakeholder mapping would help Harlow Leisure to manage these two groups.
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Read the case study in the Insert.
To what extent would the reactions of SSN Ltd’s stakeholders to the possible takeover be likely to lead to conflict between those stakeholders?
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Evaluate the extent to which the use of stakeholder mapping can help the managers of a public limited company to manage change more effectively.
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SunPath Energy plc is a renewable energy company planning to build a large solar farm on agricultural land on the edge of a rural village. Several groups will be affected by this decision, including local residents, environmental campaign groups, the local council, landowners, shareholders and employees.
Analyse how SunPath Energy plc might use stakeholder mapping to manage the different groups affected by its decision to build a new solar farm.
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