OCR GCSE Business (1-9)

Business 1 (01)

1.5 Stakeholders in business

From the OCR specification

• The roles and objectives of internal and external stakeholder groups– Owners, employees, customers, suppliers,

government and the local community

• The effect business activity has on stakeholders

• The effect stakeholders have on business

Worksheet

Lesson objectives• To be able to describe the roles and objectives

of internal and external stakeholders of a business

• To be able to discuss the effect business activity has on stakeholders

• To be able to identify the effect stakeholders have on business

Starter• Who is interested in how your exams / life

goes?

• For example; school, your form tutor..

What is a stakeholder?

• 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.

Things a business stakeholder is not about….

TO BE ABLE TO DESCRIBE THE ROLES AND OBJECTIVES OF INTERNAL AND EXTERNAL STAKEHOLDERS OF A BUSINESS

Owners

• Role; to start and run a business to make a profit

• Objectives; to get a good return on any money they have invested in the business

• To make a profit

• To survive

Employees

• Role; to work in a business in return for wages

• Objectives; To have job satisfaction, to have job security so they can pay their bills, to get promoted

Customers

• Role; to buy goods or services from the business

• Objectives; to get a good choice of goods or services, to get value for money, to get quality products at low prices, to have the opportunity to buy innovative products

Suppliers

• Role; to provide the business with goods or services that they might need

• Objectives; they want to charge high prices to make a profit, they want customer loyalty with repeat orders, they also want payment on time, they may also want larger orders

Government

• Role; The role of Government is to provide low employment, low inflation and economic growth for the country

• Objectives; They will want the business to pay tax on their profits, they will also want the business to provide employment

The local community

• Role; For those who live near a business who may be affected by its operations

• Objectives; They want the business to provide jobs, they want the business to operate in an ethical way, they may also want them to buy from local suppliers and to not pollute the local atmosphere

TO BE ABLE TO DISCUSS THE EFFECT BUSINESS ACTIVITY HAS ON STAKEHOLDERS

Effect business activity has on stakeholders

• Any business activity may have an impact on its stakeholders

• Cost cutting initiatives, for example, may result in changing suppliers and gaining customers

• Marketing campaigns may have an impact on staff they may have more work to do as sales increase, the government will also enjoy more tax from profits on the increased revenue

TO BE ABLE TO IDENTIFY THE EFFECT STAKEHOLDERS HAVE ON BUSINESS

Employees can influence the success of an organisation by

Suppliers can decide whether to

Government can influence a firm by

Customers can influence a business by

Local community can influence a business by

Employees can influence the success of an organisation by their productivity and efficiency in the tasks they do everyday. They can also resort to industrial action (strike) if they disagree with working conditions, pay or company policies

Suppliers can decide whether to raise prices for orders which can obviously affect a firm's profits. Also a supplier's reliability could affect production.

Government can influence a firm by introducing new laws that can affect operations such as the National Minimum Wage, or they can raise Corporation Tax which would eat into a firm's profits

Customers can influence a business by deciding to continue to purchase goods and services from the organisation. They can choose to take their custom elsewhere.

Local community can influence a business by protesting against the building of premises

Stakeholder influence

• The owners of a business decide on the main activity, strategy and direction, but some of the stakeholders can also have an influence

• They can affect the decision making in a business

• For example; customers demanding Fairtrade goods

Sample questions

Sample question 1

[1]

Answer question 1

(a) Correct answer: Employees are

internal stakeholders of a business.

(b) Motorists are the garage’s customers;

they are external stakeholders.

(c) Local residents are external

stakeholders.

(d) The government is an external

stakeholder.

Sample question 2

[1]

Answer question 2

(a) This is not the role of a supplier.

(b) The jeans are the finished product; those who buy the finished product are called customers not suppliers.

(c) Correct answer: The role of a supplier is to supply raw materials and deliver them on time.

(d) The jeans producer needs to pay the machinist’s wages.

Sample question 3

Answer question 3

(a)Customers generally prefer longer trading hours, shorter trading hours inconvenience customers.

(b)Correct answer: Local benefits should benefit from less noise pollution/litter/traffic congestion.

(c)Suppliers are likely to be unaffected or negatively affected by this decision (due to the potential reduction in custom).

(d)The government is likely to unaffected or negatively affected by this decision (due to the potential reduction in tax on profits).

Sample question 4

Which of the following is an internal stakeholder of a business that trades as a partnership? A A customer B A shareholder C A supplier D An employee Your answer

[1]

Answer question 4

Correct answer is:

Option D an employee

Sample question 5

Which of the following are the customers of a business most likely to be interested in? A Employee wages B Job security C Product range D Share dividends Your answer

[1]

Answer question 5

Correct answer is:

Option C Product range

Name the stakeholder from the clue:1. Wants to make sure the business pays the

minimum wage2. Wants a good choice of products at the right

price3. Don’t want a noisy factory built at the end of

their street4. Wants to gain a new cleaning contract from the

business5. Wants the opportunity to get promoted to

supervisor

1 Government

2 Customers

3 Local community

4 Suppliers

5 Employees

Glossary

• Stakeholder; anyone who has an interest in the business and how it is run

• Internal stakeholder; employees and owners who are inside the business

• External stakeholder; suppliers, customers government and the local community who are all outside of the business

Resources written by Sarah Hilton for revisionstation.co.uk