Stakeholders (AQA A Level Business): Flashcards
Exam code: 7132
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Define stakeholder mapping.
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Cards in this collection (25)
Define stakeholder mapping.
Stakeholder mapping is a strategic process used to identify and analyse individuals or groups with an interest in a project or business, based on their level of interest and degree of power.
Why does a business use stakeholder mapping?
It helps the business identify appropriate strategies for managing its relationships with different stakeholders.
How should stakeholders with low interest and little power be managed?
Stakeholders with low interest and little power need only minimal effort from the business.
True or False?
Stakeholders with low interest and little power can always be safely ignored.
False.
The growth of social media means the concerns of this group can be amplified more successfully than ever before.
Stakeholders with high interest but little power should be kept ______ to give them a sense of belonging and encourage their support.
Stakeholders with high interest but little power should be kept informed to give them a sense of belonging and encourage their support.
How should stakeholders with low interest but high power be managed?
They must be kept satisfied, so they feel included and their power is acknowledged. An example is the media.
Which stakeholders are classed as key players?
Key players have both high interest and a high degree of power, such as shareholders and employees. They must be fully informed and satisfied.
Key stakeholders may receive detailed reports and direct meetings, while low-interest groups may only need a general ____ update.
Key stakeholders may receive detailed reports and direct meetings, while low-interest groups may only need a general annual update.
How does stakeholder mapping influence resource allocation?
Senior management time and budget are directed in proportion to each group's position on the map, rather than spread equally.
How can stakeholder mapping affect the timing of strategic decisions?
Some decisions require formal consultation with key stakeholders before they can proceed, such as a shareholder vote on a takeover.
True or False?
Stakeholder mapping can help a business anticipate how each group will react before a decision is announced.
True.
Mapping lets a business anticipate how each group will react, so it can plan communication and timing in advance to reduce the risk of backlash.
Define stakeholders.
Stakeholders are individuals or groups with an interest in, or affected by, the activities and performance of a business.
Why should a business weigh up the actions its stakeholders might take?
Weighing up possible actions and their consequences helps a business judge whether a decision is genuinely in its long-term interest.
How can shareholders use the AGM to influence business decisions?
Shareholders can vote against management proposals or table their own resolutions at the Annual General Meeting.
How can investors act when they disapprove of a decision?
Investors can sell their shares, pushing down the share price, or refuse to provide further funding.
Strikes, working to rule and refusing to work overtime are all forms of ________ action.
Strikes, working to rule and refusing to work overtime are all forms of industrial action.
Define boycott.
A boycott is a deliberate refusal by consumers or groups to purchase from a business, used as a form of protest to pressure it into changing its behaviour.
How can stakeholders use lobbying to influence a business?
Stakeholders can pressure politicians or regulators to intervene through new legislation, fines or formal investigations.
How can lenders and suppliers restrict a business's finance?
They can refuse further credit, call in existing loans or, in the case of credit rating agencies, downgrade the business's credit rating.
True or False?
A lower credit rating increases a business's cost of finance.
True.
Lenders charge higher interest rates to compensate for the increased perceived risk, which reduces future profit.
Which costs can rise as a result of stakeholder action?
Compensation payments, legal fees and improved pay settlements agreed to end industrial action all raise costs without increasing output.
Why is reputational damage a long-lasting impact of stakeholder action?
Negative publicity can take years to repair. It may affect customer trust and staff recruitment long after the original incident.
How can stakeholder action divert management time?
Dealing with legal action, media enquiries and complaints pulls senior managers away from long-term strategic priorities into short-term crisis management.
Strong stakeholder pressure can lead to new legislation affecting an entire ____, not just the business originally involved.
Strong stakeholder pressure can lead to new legislation affecting an entire sector, not just the business originally involved.
True or False?
Only employees who are directly affected by a business's poor treatment of stakeholders lose morale.
False.
Employees who witness a business treating other stakeholders poorly may become less engaged or more likely to leave, even if they were not directly affected.
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