1 5 1 Business stakeholders From Edexcel Who

1. 5. 1. Business stakeholders

From Edexcel Who business stakeholders are and their different objectives: • Shareholders (owners), employees, customers, managers, suppliers, local community, pressure groups, the government Stakeholders and businesses: • How stakeholders are affected by business activity • How stakeholders impact business activity • Possible conflicts between stakeholder groups

Lesson objectives • To be able to identify who stakeholders are and their objectives • To be able to discuss stakeholders in business

Starter Who is important to you in your life: Family Pets Friends at home Friends At School Club staff School staff

The. Who impact business of competition stakeholders on business are and their decision different making objectives

• A stakeholder is defined as anyone who has an interest in a business. This is not about ownership, it is about being interested in how the business is run. • An example is bank who have leant money to the owner to start-up – they do not own the business but they are interested in it.

Internal stakeholders • These are stakeholders inside the business: • Owners • Employees • Managers • Get ready to make some notes on these…

Owners are interested in - if the business will make a profit t i f o r P • The owner is the person (or persons) who started the business with their own money • In an older business this may mean a relative of the original owner Watch the video – who is the owner of JCB

Employees y t ir • Employees work inside the business • They are interested in the business – they want to know if they have job security so they can pay their own bills • They are also interested in – if there are job promotion prospects b o J u c e s

Managers n o s u • Mangers work inside a business • They are interested in a business because they may get a financial bonus if they reach targets they have been set g a n a M b r e

External stakeholders • These are stakeholders outside the business: – – – Suppliers Local community Government Shareholders Customers Pressure groups • Get ready to make some notes on these…

Suppliers are interested in the business because they want to know if they will get paid for the goods and services they have provided m y a P t n e Suppliers are also interested in knowing if they will get more business from the company

Local community • The local community are interested in the business because it may pollute the environment, it may cause noise with lorries loading • The community may not want the business to open as it may harm local business trade P l o t lu n io Watch the video see if you can identify why the locals are against Tesco opening

Government • The government are interested in the business because they want to know that they will pay their taxes • The government also wants to know that they will adhere to any laws that might apply e. g. Health and safety at work Act • They may also want the business to provide jobs a T s e x

Shareholders s d n • Shareholders are interested in a business because they want to know if a profit will be made and if they will be paid a dividend v i D e id • In a private limited company the shareholders may be friends and family of the owners • In a public limited company the shareholders can be anyone

Customers • Customers are interested in the business because they want to know they can get quality products and services at low prices • Customers want products and services that satisfy their needs • Customers want to know their favourite products will continue to be sold v A a l i a i b y il t

Pressure groups • A pressure group is interested in a business because they want to know that they have acted ethically • A pressure group can challenge and even change the behaviour of a business by: l a ic h t E – writing letters to MPs – contacting the press – organising marches – running campaigns Long list of UK pressure groups HERE

The impact Stakeholders of competition and businesses on business decision making

How stakeholders are affected by business activity • Business starts a new marketing campaign – more work for the employees, new targets for the managers • Business starts to sell more goods abroad – more tax for the government and new export laws to adhere to • Can you create scenarios for the other stakeholders?

How stakeholders impact business activity Answers on next slide

Possible conflicts between stakeholder groups • Shareholders and owners want profit Employees want higher wages – where is the conflict? Managers want big bonuses – where is the conflict? Customers low prices and high quality – where is the conflict? Local communities want lower pollution levels – where is the conflict? Suppliers want to charge high prices for goods and services they provide the business with – where is the conflict?

Possible conflicts between stakeholder groups • Employees want higher wages but owners and shareholders don’t want to pay higher wages, as this will raise costs and therefore impact profit

Possible conflicts between stakeholder groups • Mangers want big bonuses but owners and shareholders don’t want to pay them as this will impact costs and lower profits

Possible conflicts between stakeholder groups • Customers want low prices and high quality, but owners and shareholders want high profit so want to charge high prices and quality costs so may also have an impact on profit

Possible conflicts between stakeholder groups • Local communities want lower pollution levels, but owners and shareholders want high profits and reducing pollution will raises costs and so may lower profit

Possible conflicts between stakeholder groups • Suppliers want to get good prices for their goods and services, owners and shareholders want high profits and want to keep their costs low

Plenary Which stakeholders have power? (can be more than one answer) a) An individual employee in a large business b) A bank which has lent a lot of money to a small business to start-up c) A supplier of a major product to the business e. g. Microsoft d) A small supplier of bread to a large supermarket e) An important customer of a small business

Plenary answer B) A bank which has lent a lot of money to a small business to start-up Why? C) A supplier of a major product to the business e. g. Microsoft Why?

Sample question 1

Answer question 1