stakeholders

Describe what is meant by the term ‘stakeholder’.

• A person with an interest or concern in a business

• A type of financial instrument

• A legal term for a company's owner

• A government official

Explain the main difference between a shareholder and a stakeholder.

• A shareholder owns shares in a company, while a stakeholder has an interest in the company's performance.

• A shareholder is always a stakeholder, but a stakeholder is not always a shareholder.

• Shareholders are primarily concerned with financial returns, while stakeholders may have various interests.

• All of the above.

Identify TWO internal stakeholders.

• Employees and Managers

• Customers and Suppliers

• Government and Regulators

• Community and Media

The government, as a stakeholder, thinks that a high priority for a business should be:

• Maximizing profits

• Ensuring environmental sustainability

• Increasing market share

• Enhancing employee benefits

Explain the potential conflict for employees if a business is run primarily to pay shareholder dividends.

• Employees may feel undervalued as profits are prioritized for dividends over wages.

• Employees will receive higher wages as profits increase.

• Employees will have more job security as the company focuses on growth.

• Employees will have more opportunities for advancement as the company expands.

Explain how an organisation’s survival could depend on the support of suppliers as stakeholders.

• An organisation's survival depends on suppliers because they provide essential resources and services.

• Suppliers have no impact on an organisation's survival.

• An organisation can survive without any support from suppliers.

• Suppliers are only important for large organisations.

Employees have a common interest with the board of directors in seeing the business succeed because:

• they want to ensure job security and potential bonuses.

• they are required by law to do so.

• they have personal relationships with the board members.

• they have no other employment options.

The potential conflicting interest between the board of directors deciding to reduce the price of all their products and the expectations of shareholders is:

• Increased market share vs. reduced profit margins

• Higher dividends vs. lower product quality

• Improved brand image vs. increased production costs

• Enhanced customer loyalty vs. decreased shareholder value

Describe in what circumstances the employees might have strong stakeholder power over the business.

• When employees are unionized and can negotiate terms collectively.

• When employees have no influence over business decisions.

• When employees are isolated and lack communication channels.

• When employees are unaware of the business goals.

Identify what percentage of shareholders need to vote to remove the chief executive officer of a company.

• 50%

• 51%

• 66%

• 75%