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    Mariam Siddiqui
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    The document discusses how changing business objectives can impact stakeholders and provides examples of how Nokia and The Body Shop's stakeholders were affected by changes. It also examines the concept of shareholders versus stakeholders and explores some of the responsibilities businesses have to different stakeholder groups like customers, employees, suppliers and the local community. Conflicts can arise when meeting the objectives of one stakeholder group negatively impacts another.

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    Stake holders in business

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    The document discusses how changing business objectives can impact stakeholders and provides examples of how Nokia and The Body Shop's stakeholders were affected by changes. It also examines the concept of shareholders versus stakeholders and explores some of the responsibilities businesses have to different stakeholder groups like customers, employees, suppliers and the local community. Conflicts can arise when meeting the objectives of one stakeholder group negatively impacts another.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
    31 views29 pages

    Stake Holders in Business

    Uploaded by

    Mariam Siddiqui
    The document discusses how changing business objectives can impact stakeholders and provides examples of how Nokia and The Body Shop's stakeholders were affected by changes. It also examines the concept of shareholders versus stakeholders and explores some of the responsibilities businesses have to different stakeholder groups like customers, employees, suppliers and the local community. Conflicts can arise when meeting the objectives of one stakeholder group negatively impacts another.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 29

    Stakeholders in a business

    Chapter 5
    Impact on stakeholders of changing
    business objectives
    • Directors or senior managers might be forced to change corporate
    objectives.
    • When this happens, the impact on stakeholders can be significant.
    • Nokia sold to Microsoft and the body shop shifted to cost cutting and
    closed some of its stores
    TATA NANO – WHICH STAKEHOLDERS
    BENEFIT FROM IT?
    • List the groups of people who benefit
    from Nano car production.

    • List the groups of people who might


    be badly affected by the use of large
    numbers of small, cheap cars.

    • Do you think Tata should attempt to


    reduce the potential conflicts between
    the interests of these groups?
    Distinguish between the shareholder concept
    and the stakeholder concept
    a) Shareholder Concept:
    • An individual (also known as stockholder) that legally owns a
    share/stock in a public corporation. They are also owners of a limited
    company. They buy shares which represent part of a company.

    b) Stakeholder Concept
    • The view that businesses and their managers have responsibilities to a
    wide range of groups, not just shareholders.
    Explain why a business might experience lower
    profits by meeting stakeholder objectives

    Mostly because it's what the stakeholder wants and is not always what
    the consumer wants. Generally stakeholders want stability without
    much risk.
    Explain why a business might experience higher
    profits by meeting stakeholder objectives.
    • Increasing their shareholder value as well as meeting their social
    standards over a period of time, will qualify them to raise their
    profits. If the company's reputation improves, they will be able to
    increase their sales & profits as well, which also can add opportunities
    that are long and broad.
    Explain the difference between a business acting
    legally and acting socially responsibly
    • A business that is acting legally is following the rules set corporate
    policies or the government.
    • Acting socially responsible is the when a business considers the
    interests of society in their activities and decisions. These actions are
    often ethical decisions made to better the community and its
    stakeholders
    What do you understand by the term ‘conflicts
    between stakeholder interests’?
    • When stakeholders are wanting different results that satisfy them
    from the business
    • Different stakeholders have different objectives. The interests of
    different stakeholder groups can conflict. For example:
    • Owners generally seek high profits and so may be reluctant to see the
    business pay high wages to staff.
    • A business decision to move production overseas may reduce staff
    costs. It will therefore benefit owners but work against the interests
    of existing staff who will lose their jobs. Customers also suffer if they
    receive a poorer service
    Outline the responsibilities a business in the oil
    industry might have to two stakeholder groups.
    a) Customers:
    • The business should keep reasonable prices on their products as
    customers will not buy from them as much if the price is too high.
    b) Local Community:
    • Have to maintain a clean atmosphere due to the fact that oil spills
    have a severe impact on the environment if anything occur
    • Employee: Have a safe working environment, since oil is extremely
    flammable. In addition, earn enough money for a sufficient income
    Outline the responsibilities a business in a tertiary
    industry might have to two stakeholder groups.
    • For example, a hair salon business is in the tertiary sector and their
    stakeholders such as customers are very important.
    • Their responsibilities towards customers are to provide them a good
    service and ensure they are happy.
    • Another stakeholder such as suppliers. The company must sell the
    products made by suppliers at a decent price so the suppliers make a
    profit that they are satisfied with.

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