Unit 1.5: Stakeholders Reading Focus Learning outcomes On completion of this unit you should be able to: Explain the interest of stakeholders and the likelihood of conflict between them. Evaluate the impact of differing stakeholder objectives have on the behaviour and decisions of the firm. Reading Focus Jones, Hall, Raffo, Business Studies 3rd Edition, Unit 3 Stimpson Peter, Business Studies, Unit 1, 57-60

Who are involved in business activity? Various groups of people have an interest in business. Such groups are referred to as stakeholders. They include: Owners or shareholders Managers Employees Customers Government Suppliers The community Competitors

A Summary of Business Owners Directors Managers Employees Individuals Institutional Investors Other Companies Entrepreneur Business Owners Shareholders A Summary of Business Owners

The role of the entrepreneur as a stakeholder Innovation Organisation Risk taking MINI CASE STUDY Case: Question 1 Source: Jones, Hall, Raffo, Business , 3rd Edition, Unit 3, page 19

Institutional Investors Other Companies Types of Shareholders Directors Managers Employees Individuals Institutional Investors Other Companies Question: Discuss the role of each group of stakeholder identified above.

Other Stakeholders Customers Suppliers Government Community Question: Discuss the nature of relationship between the various stakeholder groups listed above and a business.

Stakeholders and their objectives Main Objective Directors To direct the strategies and major decision making of the business. To retain control. To increase their own power and status from business growth. Shareholders To receive dividends from after- tax profits. To share in the success/profitability of the business through an appreciating share price. Workforce To receive a fair wage. To ensure good working conditions. To secure their jobs through the survival and expansion of the business.

Stakeholders and their objectives Main Objective Customers To obtain good value for money from the goods and services purchased. To receive high levels of customer service. To receive after sale service and supply of spares from businesses which survives into the future. Suppliers To continue to sell profitably to the business. To be paid promptly and fully for the goods supplied. Bank Lenders To be paid back in full when repayments are due. To receive interest on loans when due.

Stakeholders and their objectives Main Objective Community To benefit from employment the business creates. To be free from environmental disadvantages the firm might create. Government To receive tax revenues from profitable firms. To direct the operations of the business for the benefit of the community/nation. To control business operations and performance to ensure it remains within national laws. To assist businesses in accordance with national and local policies. Competitors To compete by all lawful means. To differentiate its products from those of other businesses. To compare and contrast performances with other businesses.

To be submitted at the beginning of the next meeting 0bjectves and Conflict Essay Given the objectives of different classes of stakeholders discuss the extent to which conflict may arise between them. To be submitted at the beginning of the next meeting

MINI CASE STUDIES Cases: Questions 2, 3 and 4 Source: Jones, Hall, Raffo, Business Studies 3rd Edition, Unit 3, Pages 21, 23, 24 MAXI CASE STUDY Case: The Highland Bus Company Source: Jones, Hall, Raffo, Business Studies 3rd Edition, pages 25-26

MAXI CASE STUDIES Case: Microsoft ordered to split in two. Source: Stimpson Peter, Business Studies, Unit 1, page 60 Case: Microsoft defiant as shock waves hit shares Source: Stimpson Peter, Unit 1, page 61

BIBLIOGRAPHY Barratt Michael, Mottershead Andy, AS and A Level Business Studies, Pearson Education Ltd, 2000. Jewell Bruce, AS and A Level Business Studies, 4th Edition, Pearson Education Ltd, 2000. Jones, Hall, Raffo, Business Studies 3rd Edition, Causeway Press Ltd,2004. Stimpson Peter, AS and A Level Business Studies, Cambridge University Press, 2002. www.bized.ac.uk