4.

2 Communication with stakeholder of a business

Chapter(7(Stakeholders.(

1. What is meant by the term stakeholder?

A stakeholder is anyone with an interest in a business.
Stakeholders are individuals, groups or organizations, these
are affected by the activities of the business.
A stakeholder is any person, organization, social group or a
society at large that has a stake in the business.
Stake holders can - affect a business, be affected and by the
business and be both.

2. Explain the difference between external and internal

stakeholders.
Internal stakeholders are those that are directly affected by
the businesses performance.
Internal stakeholders such as owners, stakeholders,
shareholders, creditors, managers, customers, employees,
business partners and suppliers are directly involved with the
operations of the business.
They are also known as primary stakeholders
External stakeholders are individuals, groups or organizations
that are not directly affected by the business performance.
External stakeholders include government entities, the
general public, politicians and analysts, stock brokers and
potential investors.

3. State the interest influencing powers and

responsibilities of each of the following stakeholders:

Shareholders
Banks and other lenders
Directors and managers
Employees
Suppliers
Customers/Consumers
Government
 Stakeholde Interest/ Power and Responsibilit
r Expectation influence y of business
s
Profit, share- Election of Returns
Shareholder price directors through
Business dividends
growth,
dividends
Banks and Maintain Can enforce Pay back
other lenders credit loan payment installments on
payments structures and time
can withdraw
banking
facilities
Directors and Salary and Decision Rewards and
managers job making power recognition
satisfaction
Employees Salary ,wages Staff turnover, Rewards and
industrial recognition
actions,
service
quality
Suppliers Long term Price in Pay them
contracts, quality and accurately and
purchase in product maintain equal
growth, availability. distribution.
prompt
payment.
Customer Quality, Value Repeat Satisfy their
for money, purchasing, needs through
customer word of effective
service mouth service
recommendat delivery.
ion.
Community Jobs, Influence in Community
employment opinions and social
activities
Government Tax, Rules and
Employment regulations,
taxations,
subsidies

4. What are pressure groups?

 A pressure group is an organized group of people
which persuades business and the government
to act in ways that are in line with their particular
views. pressure groups can have a big influence over a
business by creating negative activity by publishing
about the business activity.

A pressure group is an organised group that does not

hold candiddates for election but seeks to
influence and change goverment policy or legislation.

Eg:
British Medical Association (BMA)
The LOW Society
The National Union of Teachers (NUT)
The Confederation of British industry (CBI)
The Trade Union Congress (TUC)

5. What is meant by the social responsibility of a

business?
Social Responsibility is the duty and obligation of a
business to other stakeholders.

6. What are ethics?

Ethics reffers to the morals rights and wrongs of any
decision a business makes,
it is a value judgment that may differ in importance
and meaning between different individuals.

Eg:
Reduce Pollution by using non-Fossil Fuels.
Disposal of waste safely and in an environmentally
friendly manner.
Sponsoring Local Charity Events.
Trading Fairly with developing countries.