1.4--stakeholders

stakeholders definiton

individuals or groups who have direct interest in the business or involved in its operations because they are directly affected by the performance of the business

internal stakeholders defintion

people or groups who work for the business or own the business . people or groups who can be affected by , and therefore have an interest in ,any action by an organisation

shareholders/owners definition

they are risk takers of the business. they invest capital into the business to set up and expand it . they are liable to share of the profits made by the business

owners/shareholders objectives

1. entitled to rate of return on capital so profit maximisation as main objective

2. business growth, increase value of shares

owners/shareholders influence business by

1. investing more funds into the business to fund growth

2. close down business (Owner)

employees/workers definition

people that are employed by the business and are directly involved in its activities

objectives of employees

1. contract of employment that states all the rights and responsibilities to and of the employee

2. regular payment

3. job satisfaction + motivation

4. job security (able to work without the fear of getting dismissed/made redundant)

5. fair treatment , no discrimination

employees influence business by

1. affect quality or number of goods and services provided

2. may leave business —business will have insufficient workers

managers defintion

also employees but control the work of others, they oversee making key business decisions

manager objectives

1. job security (link to maslow hierarchy)

2. higher salaries

3. business growth —bigger business=control bigger and well known business —>status+power increase , increase chance for promotion (motivation )

manager influence business by

• make important decisions that can affect sales/level of output

• how to organise , control and command other employees

external stakeholders

people or groups from outside the business who are affected by the business decisions and daily operations

customers definition

purchase and consume goods and services that the business provides

customer objectives

1. price that reflect quality

2. reliable and safe products

3. well designed and of a perceived quality (no false advertising)

customer influence business by

1. stop buying products —> reduce market share , drop revenue /production , unemployment , recruiting cost

2. write bad reviews that affect reputation of business

suppliers defintion

they provide raw materials /components/finished goods to the business

suppliers objectives

• regular/increased orders from business (reliability)

• receive payment for goods on time

• receive fair prices for goods provided

supplier influence business by

1. deciding whether / when to supply goods (affects just in time inventory )

2. can increase/decrease price (bulk buy=lower prices)

3. decide whether/how long will give business to pay

lenders/banks definition

provide financial help for business organisations

banks objectives

• expect business to repay the amount that has been lent +interest —> business liquidity

bank influence on business by

1. decide whether to offer loans (no loans=no business growth)

2. can request existing finance to be repaid

government definition

protect workers and customers from business activities and safeguard their interest

government objectives

1. business to grow and survive as can help increase total output of country , improve employment ,increase government revenue through tax payment

2. firms must follow rules and regulations

government influence on business

• introduce or remove legal controls

• provide financial support for business —subsidies given in high unemployment/underdeveloped areas

• can change tax rates

local community definition

all stakeholders, especially third parties that are affected by the business activities

local community objective

1. offer jobs and employ local employees

2. production process cannot harm environment

3. products must be social responsible , must not pose any harmful effects from consumption

local community affect business by

1. arrange protest or other actions through pressure groups

2. lobbying—>the act of attempting to influence government decisions, policies, or legislation by individuals, organizations, or interest groups.

special interest groups

1. banks → business liquidity

2. pressure group —> want to change business policy towards pollution or animal testing

competitors defintion + objective

other firms producing similar goods and services

• objective : fairness of competitive practices