Stakeholders in business.pptx IGCSE business studies

IGCSE business studies

1. Stakeholders in business

2. Anyone interested or affected by a project or business. External Stakeholders: Customers Suppliers Employees, including managers and their families Local communities Government and government agencies Special interest groups (pressure groups) Lenders Internal Stakeholders Owners (shareholders in a limited company) managers other employees Stakeholder Vs Shareholder [Table 5.1] Stakeholder

3. Shareholder concept - to increase value for the shareholders Stakeholder concept - many people are affected by company ’s actions So stakeholders should also be considered [Table 5.2] Business accountability to stakeholders and how stakeholder aims impact business decision Aim: To increase CSR Responsibility to: Customers Suppliers Employees local community government Importance and influence of stakeholders on business activities

4. Responsibilities to customers: Customer satisfaction is crucial Product quality and design Reasonable prices Follow laws Fair treatment Benefits of responsibility Customer loyalty Repeat purchases Good publicity Valuable feedback Responsibilities to suppliers Importance of supplier quality Reliability matters Clear communication Mutual satisfaction Long-term contracts Benefits Supplier loyalty Better credit terms Meeting deadlines Business accountability to stakeholders and how stakeholder aims impact business decision

5. Responsibilities to employees Meeting legal obligations Additional responsibilities Training opportunities Job security Fair pay Good working conditions Involvement in decision-making Benefits Employee loyalty Low turnover Recruiting good workers Efficiency improvements Motivation boost Effective communication Business accountability to stakeholders and how stakeholder aims impact business decision

6. Responsibilities to local community Importance of meeting community responsibilities Examples of community-focused decisions Offering secure employment Using local suppliers Reducing environmental impact Benefits Approval for business expansion Contracts with community-involved businesses Acceptance of negative effects Financial support for community Business accountability to stakeholders and how stakeholder aims impact business decision

7. Responsibilities to government Meeting legal responsibilities Paying taxes on time Accurate completion of forms Seeking export markets Benefits Good relations with government Valuable government contracts Approval for subsidies Award of licences Business accountability to stakeholders and how stakeholder aims impact business decision

8. Conflicts of stakeholder aims: Shareholder concept prioritizes shareholder interests over others. Stakeholder approach seeks to balance interests for long-term shareholder benefit. Dealing with conflicts: Compromise often necessary to address conflicting stakeholder demands. Examples include gradual factory closures and adjusting plans for community protection. Establishing priorities: Senior management decides which stakeholders are most crucial in each situation. Considerations include extra costs, potential revenue loss, and overall impact on the business. Conflicts arising from different stakeholder aims

9. Changing corporate objectives: Directors or senior managers may need to alter company goals due to the evolving business environment. Impact on stakeholders can be significant. Examples: Volkswagen's transition: Initially aimed to lead in diesel engines but faced 'Dieselgate' scandal. Shifted focus to electric cars, requiring heavy investment and closure of diesel factories. The Body Shop's adjustment: Emphasized social and environmental change but faced tough trading conditions. Shifted focus to cost-cutting by closing some shops for survival and profitability, contradicting original objectives. Stakeholder impacts: Employees : Job losses due to changes in objectives. Customers : Reduced choice or availability of products/services. Owners : Potential safeguarding of returns in the future. Lenders : Reassurance of action to prevent losses or improve reputation, ensuring loan repayment. Impact on stakeholders of changing business objectives

10. Other Examples: McDonald's Health Initiative: Previous Objective: McDonald's primarily focused on offering fast food items with minimal emphasis on health. Change in Objective: Responding to increasing health concerns and changing consumer preferences, McDonald's introduced healthier menu options like salads, wraps, and fruit options. Impact on Stakeholders: Customers : Improved health outcomes. Community : Positive impact on local economies Impact on stakeholders of changing business objectives