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Learning Aim: To understand business decisions and stakeholders. A* A B C Evaluate how stakeholders could influence a businesses decisions Assess the conflicts that may occur between the stakeholders Discuss why a stakeholder has an interest in a business Identify who stakeholders are Climbing the ladder to success. A stakeholder is an individual or a group which has an interest in and is affected by the activities of a business; stakeholders have an interest in how the business operates and whether or not it is successful. Who are the stakeholders? Business owners Other external groups (e.g. pressure groups) Shareholders Managers & employees Competitors The media Customers Banks and other Suppliers finance providers Government Local community What stakeholders are interested in? Stakeholder Shareholders / Owners Managers & Employees Customers Suppliers Banks & other finance providers Government Local community Mainly interested in… Return on investment + profits and dividends Success and growth of the business Proper running of the business Rewards, including basic pay and other financial incentives Job security & working conditions (e.g. holidays) Promotion opportunities + job satisfaction & status – motivation, roles and responsibilities Value for money Product quality & customer service Continued, profitable trade with the business Financial stability – can the business pay its bills? Can the business repay amounts loaned or invested? Profitability and cash flows of the business Growth in profits and value of the business The correct collection and payment of taxes (e.g. VAT, Income Tax) Helping the business to grow – creating jobs Compliance with business legislation Success of the business – particularly creating and retaining jobs Compliance with local laws and regulations (e.g. noise, pollution) Who are the stakeholders of Beauchamps? A*: Evaluate how these stakeholders can affect the schools decision making A: Assess any conflicts that may occur B: Discuss why they may have an interest in the school C: Identify the stakeholders of Beauchamps Climbing the ladder to success Essex County Council Nonteaching Staff Local Community Students Governors Stakeholders of Beauchamps Competitors Teachers Parents Potential conflicts between stakeholders Business Decision Supported By? Opposed By? Cut jobs to reduce costs Shareholders Banks Management Customers & suppliers Customers Shareholders Employees Local community Local community Add extra shifts to increase factory capacity Introduce new machinery to replace manual work Increase selling prices by 10% Shareholders to improve profit margins Management Employees Customers Scenario Stakeholders supporting Government has decided to make cuts in funding to education Government The governors have mad e a decision Government to reduce teacher pay in order to spend the money elsewhere in the school. (For example educational visits to bring the curriculum to life) The school have made a decision to cut lunch breaks from one hour to half an hour to save teaching hours and pay Teachers strike for additional pay. Stakeholders Opposing Potential conflicts between the stakeholders at Beauchamps A*:Evaluate how these stakeholders could influence the schools decisions A: Assess any conflicts that could occur between these stakeholders B: Discuss why these stakeholder have an in the school C: Identify potential conflicts between the stakeholders of Beauchamps Climbing the ladder to success Look at the following statements referring to stakeholders and write down which groups of stakeholders it affects. Statement 1: A decision by those who run the business to introduce a system for monitoring the amount of pollution that it creates. Statement 2: A decision is taken to switch the sourcing of raw materials and components from the UK to a firm in Malaysia which reduces costs and boost profits. Statement 3: A decision is made to cut cost by restructuring the business which results in redundancies. Statement 4: The introduction of a system which puts the staff at the heart of the decision making process in an effort to improve productivity and quality, allowing the business to reduce prices. A*: Evaluate how important stakeholders opinions are to a business A: Analyse whether these impacts are positive or negative B: Examine how they affect this group of stakeholders C: Identify which group of stakeholders it affects Climbing the ladder to success