3.2.3 Understanding the role and importance of stakeholders

• The interests of different stakeholder groups in a business are always aligned.

  False
• How does poor stakeholder management affect a business's reputation?

  Damages trust and image
• What are stakeholders in the context of a business?

  Individuals or groups with interest
• Categorize the following stakeholder groups as either internal or external:

  1️⃣ Internal: Employees

  2️⃣ Internal: Managers

  3️⃣ Internal: Shareholders

  4️⃣ External: Customers

  5️⃣ External: Suppliers

  6️⃣ External: Local Community

  7️⃣ External: Government
• What is the primary interest of shareholders in a business?

  Maximizing profits
• What are two possible states of stakeholder interests in a business?

  Aligned or conflicting
• Internal stakeholders are affected by the business but are not directly involved within it.

  False
• Businesses must manage conflicting stakeholder interests to maintain support.


  True
• What is the typical interest of the local community in a business?

  Minimizing negative impacts
• What are three typical interests of employees in a business?

  Job security, wages, conditions
• Aligned stakeholder interests support strategic goals
• Match the stakeholder group with their potential positive and negative impacts:

  Shareholders ↔️ Capital investment, short-term profit pressure

  Employees ↔️ Skills and productivity, disruptive strikes

  Customers ↔️ Revenue and brand loyalty, negative publicity

  Local Community ↔️ Social license to operate, legal challenges
• Businesses use stakeholder management strategies to balance stakeholder interests.


  True
• Stakeholder engagement involves regularly communicating with stakeholders to understand their concerns
• Stakeholders are individuals or groups that have an interest or stake in the activities and performance of a business.interest
• There are two main types of stakeholders: internal and external.external
• What is the main interest of employees in a business?

  Job security
• Shareholders aim to maximize profits and share price
• What are two possible types of stakeholder impact on a business?

  Positive or negative
• Stakeholder impact on a business is solely negative.

  False
• Shareholders may pressure for short-term profits over long-term sustainability
• Steps of effective stakeholder engagement:

  1️⃣ Identify and prioritize key stakeholders

  2️⃣ Communicate regularly to understand their needs and concerns

  3️⃣ Collaborate to find mutually beneficial solutions where possible

  4️⃣ Negotiate to reach compromises when interests conflict
• What must businesses balance to maximize positive stakeholder impacts?

  Competing stakeholder interests
• What is the purpose of stakeholder mapping in stakeholder management?

  Prioritizing stakeholders
• What is the goal of stakeholder collaboration in stakeholder management?

  Finding mutually beneficial solutions