UNIT 1: Ch 1 - People in business

Stakeholder

someone who is impacted by the actions of the business. have an interest or concern in industry

investor:

provides money to start/expand a business in return for a % of the profits.

owner of the body shop sold half of shares to investor for £5,000 to open her second shop

Entrepreneur

A person who spots a gap in the market, comes up with an idea & takes a financial or non financial risk to set up a profitable business.

lily obrien was set up when the owner worked abroad and saw a demand for a premium chocolate brand. This inspired her to create a product that filled that gap.

Supplier:

Supplies the business with raw materials or finished goods for resale.

Employer:

Hires staff, ensures workplace is safe, & pays employees a fair and agreed wage.

Manager:

person who runs and manages business and makes sure it achieves its goals. they use skills such as leading and communicating to manage employees.

Employee:

works for employer. carries out essential tasks to make business success

Service provider:

A business that provides services for other businesses to run successfully, eg banks & transport firms.

A co-operative relationship

Stakeholders work together towards a common goal, the goal is of mutual benefit, a win-win scenario.

List an example of a Cooperative relationship that may arise between an entrepreneur & investor

Entrepreneur comes up with a new product & an investor will invest. The investor now owns shares & will now get a % of the profits.

(Win-Win scenario)

List an example of a Cooperative relationship that may arise between an employer and an employee:

An employer and an employee may sign a productivity agreement: wages increase if work targets are met.

(win-win scenario)

List an example of a Cooperative relationship that may arise between a producer and a consumer:

The producer could conduct market research to find out the consumer's likes/dislikes. Therefore consumers receive products that satisfy their needs & helps to increase Profits for the producer.

Competitive Relationship

Stakeholders working towards different goals, one party benefits at the expense of the other, a win-lose scenario.

List an example of a competitive relationship that may arise between an employer and an employee:

Employer cuts wages by 5% due to increasing costs.

(Win-lose scenario)

List an example of a competitive relationship that way arise between an Consumer & producer:

Producer makes poor quality goods...Consumer when goes onto buy from competitor = Loss of profits.

(Win-lose)

Dynamic relationship

The relationship between stakeholders in business is constantly changing.

dependent relationship

The success of one stakeholder depends on the other.

Eg, government and entrepreneur: Government provides grants to start a business. The government needs entrepreneurs to provide employment & pay taxes.

commercial business:

Provides goods and services with the intent to make a profit.

Examples: Supervalu, H&M, and bershka

Non commercial business:

Provides a service that puts people before profit.

Examples: St vincent de paul & trocaire

How are consumers impacted in a business?

quality and cost.

How are employees impacted in a business?

- Wages

- Work conditions

- Job security

Interest group:

Is an organisation that represents the common, viewpoints, goals, & objectives of a particular group of stakeholders. They have more power & skills when they work together & more likely to achieve goals.

EG: ISME & IBEC.

Interest group (ISME)

= Irish small & medium enterprise association

• Represents the viewpoints of small/medium sized businesses. It lobbies on issues that affect its members, Eg; impact of government increasing minimum wage.

Interest group (IBEC)

= Irish business & employers confederation.

• Aims to influence decision makers...Eg government & EU on issues that affect its members. Eg taxation.

Lobbying:

Involves trying to persuade decision makers to support laws that give advantage to your organisation.

Boycotting:

Consumers refuse to buy goods or services from a firm to show their dissatisfaction with the business. EG: Exploited workers.

Loan capital:

money borrowed by entrepreneur a from financial institution, eg banks, with interest charged on them.

Grant:

Money given to a business by state agencies such as Local enterprise office. Grants do not have to be repaid.

Equity captial:

Money invested in the business by individuals or other businesses. These investors become part owners & are entitled shares (Dividends)