Business SAC 1

• Stakeholders in a business include owners, managers, employees, customers, suppliers, and the general community that impact the business
• Shareholders: are individuals who own part of a business through purchasing stocks, hey receive dividends in return
• Managers: are responsible for planning, organizing, leading, and controlling the business to achieve objectives
• Employees: are individuals who provide their labor in return for remuneration from the business
• Customers: are individuals who purchase goods or services from a business in exchange for money
• Stakeholder roles:

  • Providing capitol to the business
  • Voting on a board of directors
  • Adoption of annual report
  • Influencing major decisions through voting
• Stakeholder interests:

  • The companies profitability
  • Receiving dividends
  • Receiving capital gain
• Manager roles:

  • Planning, leading, and controlling the business and employees
• Manager interests:

  • Be fairly remunerated
  • Aquire status and power from their role
• Employee roles:

  • Provide labour in return for salary or wages
  • Provide the business's service
• Employee interests:

  • Receiving fair wages
  • Adequate working conditions
  • Safe workplace
• Customer roles:

  • Purchasing goods and services in exchange for money or something valuable
• Customer interests:

  • Product affordability
  • Product quality
  • Product availability
• Suppliers: those who provide the raw materials and components that will be used in the manufacture of a good or service
• Supplier roles:

  • Provide the inputs on time
  • Provide inputs on level of quality
• Supplier interests:

  • Prompt payment from the business
  • Fair dealings with the business
  • Acceptable lead times from the ordering of materials so inputs can be delivered on time.
• Community: A group of interacting people sharing the environment surrounding an organisation
• Stakeholder conflicts: disputes and disagreements between individuals or groups, arising when stakeholders' interests do not align
• Examples of stakeholder conflicts:

  • Employees desiring higher wages vs. shareholders seeking higher dividends
  • Management vs. customers
  • Trade unions formed to improve wages vs. industry
  • Suppliers ensuring safe working conditions vs. businesses aiming to reduce costs
• Trade unions: organizations formed by employees in an industry to improve wages and working conditions
• Corporate Social Responsibility (CSR): a business's legal responsibility to the wellbeing of employees, customers, shareholders, and the community by acting ethically and socially responsible
• Community roles:

  • Provide a pool of potential employees for the business
  • Make up a large amount of their customer base.
  • Supply the organisation with inputs
• Community interests:

  • The businesses level of pollution or contribution to the landfill
  • The employment opportunities the business can provide
• Social enterprises: businesses that produce goods and services for the market but operate with the objective of fulfilling a social or environmental need
• Private limited company: an incorporated company with 1-50 shareholders, and it is formed through incorporation offering asier capital attraction
• Public listed companies: incorporated businesses with an unlimited number of shareholders, where shares are often purchased on the stock exchange
• Partnerships: two to twenty people who share responsibility in owning and running the business, with unlimited liability and shared workload
• Sole traders: businesses run by one person with unlimited liability, complete control, and all financial and decision-making responsibility
• Private limited company +:

  • Limited liability
  • Easier to attract capitol
  • Business doesn't close if owner dies
  • Lower company tax rate
• Private limited company -:

  • Expensive to set up
  • Complicated closure of business
  • Personal liability of directors is employees commit offences
• Public listed company +:

  • Easier to attract capitol
  • Limited liability
  • Easy transfer of ownership
  • Business doesn't close if owner dies
  • Board of directors
• Public listed company -:

  • High set up costs
  • Required to publish annual report
  • Exposed to high risks
• Social enterprise +:

  • Can open up new markets
  • Meeting socail needs can have positive effects on profits and market share
• Social enterprise -:

  • Difficult to obtain capitol
  • High operating costs
  • Difficult to focus on social and financial goals
• Government business enterprise +:

  • Delivers community services
  • Operates with independence of government
• Government business enterprise -:

  • Less effective management
  • Less accountability resulting in less staff productivity
• Sole trader +:

  • Cheap and simple to set up
  • Owner has complete control
  • No disputes
  • Owner keeps profits
• Sole trader -:

  • Difficult to attract capitol
  • Unlimited liability
  • Business ends when owner dies
  • Owner is responsible for losses
• Partnership +:

  • Low start up costs
  • Shared responsibility and workload
  • Business can continue if owner dies
• Partnership -:

  • Unlimited liability
  • Possibility of disputes
  • Divided authority