Book 4 Managing Stakeholder Interests Stakeholders with financial

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Book 4: Managing Stakeholder Interests Stakeholders with financial interests Internal External Managers Employees Owners/managers

Book 4: Managing Stakeholder Interests Stakeholders with financial interests Internal External Managers Employees Owners/managers Owners Lenders of money Suppliers of goods and services Customers and clients Government agencies General public Arab Open University// B-631// Fall 2003 1

Book 4: Managing Stakeholder Interests 3. 3: An inputs-outputs model Inputs Transformation activities Output

Book 4: Managing Stakeholder Interests 3. 3: An inputs-outputs model Inputs Transformation activities Output Outcome Arab Open University// B-631// Fall 2003 2

Book 4: Managing Stakeholder Interests 3. 3: Cont’d. Inputs (assets) are divided into 2

Book 4: Managing Stakeholder Interests 3. 3: Cont’d. Inputs (assets) are divided into 2 groups: 1. Tangible assets: are resources you can see and touch incl. day-to-day assets & fixed (long-lived) assets 2. Intangible assets: are the ones you cannot see or touch, such as people’s skills or know-how Arab Open University// B-631// Fall 2003 3

Book 4: Managing Stakeholder Interests 3. 4: Internal stakeholder accounting Communication between individual managers

Book 4: Managing Stakeholder Interests 3. 4: Internal stakeholder accounting Communication between individual managers & senior management about the inputs-outputs process is essential. It is usually achieved via the internal budgetary process, necessarily involving the use of information statements Arab Open University// B-631// Fall 2003 4

Book 4: Managing Stakeholder Interests 3. 5: External stakeholder accounting • External stakeholders turn

Book 4: Managing Stakeholder Interests 3. 5: External stakeholder accounting • External stakeholders turn to financial statements such as balance sheets, cash flow statement & profit statements to seek info Relevant to them. • The sources of finance for inputs are called liabilities, and what the business spends the money on is called its assets. Arab Open University// B-631// Fall 2003 5

Book 4: Managing Stakeholder Interests • 3. 5: Cont’d. In this session, we explore

Book 4: Managing Stakeholder Interests • 3. 5: Cont’d. In this session, we explore 2 types of financial statements: A- Balance sheet: it lists nothing more than where the funding for inputs came from (sources of finance) & the resources that the funding has been spent on (assets). Arab Open University// B-631// Fall 2003 6

Book 4: Managing Stakeholder Interests • 3. 5: Cont’d. B- Profit Statement: shows all

Book 4: Managing Stakeholder Interests • 3. 5: Cont’d. B- Profit Statement: shows all profits made and their origin against all expenses made on this profit (as dividends, taxes) and the balance between them (reinvestments). Arab Open University// B-631// Fall 2003 7