3.2.3 Role and importance of Stakeholders

• What are stakeholders in a business context?

  Individuals, groups, or organizations with an interest in a business's operations and decisions
• What are the two types of stakeholders?

  Internal stakeholders and external stakeholders
• What is an example of an internal stakeholder?

  Employees
• What is an example of an external stakeholder?

  Customers
• Why might stakeholder objectives conflict?

  Because each stakeholder group has different objectives and priorities
• What do shareholders prioritize?

  Profit maximization, dividends, and share prices
• What do employees prioritize?

  Job security, working conditions, and pay
• What do customers demand?

  Quality products and value for money
• What do suppliers seek?

  Timely payments and maintaining long-term contracts
• What does the government look for from businesses?

  Compliance with regulations, tax revenues, and employment creation
• What does the local community focus on?

  Employment opportunities, environmental impact, and corporate social responsibility
• What is Mendelow’s Matrix used for?

  • Analyzing and prioritizing stakeholders
  • Based on:
  • Power: Ability to influence the business
  • Interest: Level of concern or involvement in business activities
• What are the four categories in Mendelow’s Matrix?

  High Power, High Interest; High Power, Low Interest; Low Power, High Interest; Low Power, Low Interest
• Who are considered key stakeholders in the "Manage Closely" category?

  Major shareholders or regulatory bodies
• What type of stakeholders are in the "Keep Satisfied" category?

  Stakeholders with influence but less direct interest, like government bodies
• What type of stakeholders are in the "Keep Informed" category?

  Stakeholders such as local communities or smaller customers who are concerned but lack power
• What type of stakeholders are in the "Monitor" category?

  Minimal engagement is needed, such as distant members of the public
• What are some examples of conflicts that can arise from stakeholder interests?

  • Profit-driven decisions upsetting environmental groups
  • Expanding operations clashing with local community interests
• Why is balancing stakeholder interests crucial in decision-making?

  Failing to balance can lead to conflicts
• What can happen if businesses ignore major stakeholders?

  It can lead to reputational and operational risks
• What is Corporate Social Responsibility (CSR)?

  • A business's responsibility to contribute positively to society
  • Consider the impact of its actions on stakeholders
• How can prioritizing CSR benefit companies?

  It can improve relationships with stakeholders and foster loyalty
• What are some examples of CSR actions?

  • Reducing environmental impact
  • Ensuring fair labor practices
  • Supporting community programs
• How do stakeholders influence strategic planning?

  • They shape long-term strategy and company goals
  • Engagement can involve consultations, surveys, and partnerships
• What is the definition of a stakeholder?

  Any individual or group affected by or having an interest in a business
• What is stakeholder mapping?

  A tool to assess stakeholders’ power and interest
• What does CSR stand for?

  Corporate Social Responsibility
• What is the definition of ethics in a business context?

  Principles guiding behavior, especially regarding what is right or fair toward stakeholders