Stakeholders in a Business (Cambridge (CIE) A Level Business): Flashcards
Exam code: 9609
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Define stakeholder.
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Cards in this collection (26)
Define stakeholder.
A stakeholder is any person, group or organisation that has an interest in or is affected by the activities and decisions of a business.
True or False?
It can be difficult for a business to please all of its stakeholders at the same time.
True.
Different stakeholders may have different priorities, so meeting one group's needs can make it harder to satisfy another.
Define internal stakeholder.
An internal stakeholder is someone who is directly involved inside the organisation and is affected by its day-to-day operations and decisions.
What rights do shareholders have as owners of a company?
Shareholders have the right to dividends, to vote at AGMs and to access key financial information.
True or False?
Managers and directors are external stakeholders because they report to the owners.
False.
Managers and directors are internal stakeholders. They lead teams and run daily operations inside the business.
What rights do employees have as stakeholders?
Employees have the right to fair pay, safe working conditions, job security and non-discrimination.
Define external stakeholder.
An external stakeholder is a person or group outside the business who is affected by or has an interest in its activities and performance.
_______ lend money or provide trade credit to a business.
Creditors lend money or provide trade credit to a business.
What is the role of the government as a stakeholder?
The government regulates business activity, collects tax and sets laws.
What rights does the local community have as a stakeholder?
The local community has the right to a clean environment, jobs and reduced noise and traffic.
How do pressure groups act as stakeholders?
Pressure groups campaign to influence business behaviour, especially on social issues. They have the right to protest, raise awareness and organise campaigns.
True or False?
Customers have rights as stakeholders but no responsibilities.
False.
Customers also have responsibilities, such as using products correctly, paying on time and giving feedback.
Competitors have a responsibility to compete ethically, avoiding misleading advertising and _____ innovations.
Competitors have a responsibility to compete ethically, avoiding misleading advertising and copying innovations.
Define accountability.
Accountability means a business being responsible for its actions and decisions and being willing to explain them to the stakeholders affected.
How can stakeholders harm a business that ignores them?
Employees can strike or resign, customers can stop buying its products, and pressure groups can launch campaigns that create bad publicity.
True or False?
Being accountable to stakeholders can help a business attract investors and skilled workers.
True.
Being open and honest builds trust. The resulting good reputation attracts investors, skilled workers and loyal customers.
How can a business show it is accountable to its owners?
It can publish financial reports and forecasts, hold AGMs for questions and voting, and pay dividends when profits allow.
Why might investing in environmental technology cause stakeholder conflict?
The investment may meet the local community's demands, but its cost may reduce profitability and upset shareholders.
True or False?
All stakeholder groups have equal power to influence a business.
False.
Stakeholders have different levels of power and influence. Pressure groups with strong public support may influence a business more than individual shareholders.
How might a change of objective to cost-cutting affect employees?
Employees may face job losses or lower wages.
Why might some shareholders dislike a new sustainability objective?
Becoming more sustainable may cause profits to drop in the short term, which reduces returns to shareholders.
If a business shifts its objective towards ethical ______, suppliers that meet fair trade or quality standards may benefit.
If a business shifts its objective towards ethical sourcing, suppliers that meet fair trade or quality standards may benefit.
How might the local community be affected if a business's objective becomes global expansion?
The business might relocate, which would reduce local investment or jobs.
Internal stakeholders are ______ involved in the business, so decisions often affect their job roles, income or strategy.
Internal stakeholders are directly involved in the business, so decisions often affect their job roles, income or strategy.
How are customers likely to react when a business raises its prices?
Customers are likely to be unhappy with the higher costs. They may complain or switch to competitors.
How might suppliers react when a business relocates production abroad?
Suppliers may lose contracts, so they could raise prices or seek new buyers.
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