Summary: (2.3) Stakeholders And Their Relative Importance

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• 1 (2.3) Stakeholders and Their Relative Importance

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• What is a potential conflict between stakeholders regarding cost reduction?

  • Business Decision: Cut jobs to reduce costs
  • Supporters: Shareholders, Banks
  • Opposers: Employees, Local community

• What is the main argument of the stakeholder concept?

  • Businesses should consider responsibilities to stakeholders, not just shareholders.
  • Stakeholders can be employees, communities, or any vested parties.
  • Focus on creating value for all stakeholders.

• How can adding shifts lead to stakeholder conflict?

  • Business Decision: Add extra shifts to increase factory capacity
  • Supporters: Management, Customers & Suppliers
  • Opposers: Local community

• What is stakeholder power and how does it vary among stakeholders?

  • Stakeholder power signifies the influence stakeholders have.
  • Some stakeholders possess more power than others.
  • Importance in managing stakeholder influence and power effectively.

• How does a stakeholder differ from a shareholder?

  • Stakeholder:
    • Has interest in business; does not own.
    • May work for or transact with business.
  • Shareholder:
    • Owns part of the business.
    • Benefits from business value increases.

• What conflict arises from new machinery for manual work?

  • Business Decision: Introduce new machinery to replace manual work
  • Supporters: Customers, Shareholders
  • Opposers: Employees

• How should businesses respond to stakeholders with a high level of interest and power?

  • Engage with key players directly.
  • High interest and power indicate they are top priorities.
  • Must involve them in decision-making processes.

• What does the stakeholder concept emphasize?

  • Business purpose is to create value for stakeholders.
  • Align interests of customers, suppliers, employees, communities, and shareholders.
  • Ensure sustainability over time.

• How does raising selling prices impact stakeholders?

  • Business Decision: Increase selling prices significantly to improve profit margins
  • Supporters: Shareholders, Management
  • Opposers: Customers

• What do suppliers expect from businesses?

  • Continued, profitable trade
  • Financial stability
  • Timely payments