1.

Stakeholder concept:​ a theory that looks at the relationship between businesses and
others in the internal and external environment. It also looks at how these connections
influence how a business conducts its activities.

internal stakeholders & their interests/responsibilities:

1. Employees
Interests
- Employment security
- Wage levels and benefits
- Good conditions of employment
- Some participation in decision making within the business
Responsibilities:
- Training
- Job security
- Pay more than minimum wage

2. ​Managers
Interests
- Employment security
- Salary and benefits that compare to similar posts of responsibility
- Responsibilities offered
- Status of their post
- Opportunity for profit sharing
Responsibilities
- Job security
- Competitive salaries & other benefits
- Opportunities for responsibility
- Opportunities for career advancement

3. Shareholders
Interests
- Annual dividends
- Share price rising over time
- Security of investment
- Ability to sell shares when required
Responsibilities
- Annual accounts presented to shareholders
- Strategies taken to increase shareholders value over time.

External stakeholders & their interests/responsibilities:

1. customers
Interests
- Value for money
- Product and quality & safety
- Guarantees
- Service levels
- Long term rewards & loyalty
Responsibilities
- Not to break the law on consumer protection & accurate advertising
- Not taking advantage of vulnerable customers
- Not using high pressure selling tactics
- Giving customer assurances about quality, delivery dates & service levels

2. Suppliers
Interests
- Speed of payment
- Level and regularity of orders
- Fairness of treatment
Responsibilities
- Establish a two way relationship with customers that will benefit the business and
the supplier
- Pay fair prices
- Pay invoices on a regular basis

3. Government
Interests
- Creation of jobs and incomes that boost the economy
- Taxes paid
- Impact on wider society
Responsibilities
- Pay profit tax
- Keep accurate accounting records so true profit can be shown
- Provide information to the government as requested
 - Keep within all legal limits

4. Special interest groups

Interests
- Pressure groups: campaigning to achieve a change in business decisions.
- Local community: encouraging businesses to act in the community’s interests
and to avoid harmful production methods.
Responsibilities
- Pressure groups: recognize concerns over business activities and businesses
may respond by making wiser decisions.
- Local community: avoid pollution and other damaging operations.

Method of conflict Resolution

Method of conflict Advantages Disadvantages

Arbitration: ​to resolve - Will hear the argument from - Neither stakeholder group
industrial disputes both sides and decide on will likely receive exactly
between workers and what they consider to be a fair what they wanted.
managers. solution.

Worker - Improves employees work - Some managers may

participation:​ ​a efficiency & work habits. think that it is a waste of
method that helps build time & resources.
communication, -
decision making and
resolve conflict b/w
managers &
employees.

Profit sharing - Allows employees to work - It will cost more for the
scheme: ​a method more productively & receive company since they will
b/w shareholders & better results from the have to pay higher wages
employees in sharing company. and receive less profit.
the annual profits and
benefiting from the
success of the
company. This is a
successful method
since both stakeholders
& employees can
benefit out of it.
 Share ownership - It motivates employees to - Conflicts may arise as
scheme: ​this method work harder and stay loyal to shareholders may not
is b/w managers, the company. agree with this concept
employees & and they might not want
shareholders. This to share their shares with
method gives shares to the employees.
the employees & allows
them to buy shares.

1.5

STEEPLE analysis: ​a framework for analysing the external environmental factors that
affect the business strategies and objectives. It is an acronym that stands for social,
technological, economic, environmental, political, legal and ethical external factors that
impact a business.

Internet: the worldwide web of communication links between computers. ​When two
computers are connected over the ​Internet​, they can send and receive all kinds of
information such as text, graphics, voice, video, and computer programs.

Economic growth: t​he increase in the inflation-adjusted market value of the goods and
services produced by an ​economy​ over time. It is conventionally measured as the
percent rate of increase in real gross domestic product, or real GDP.

Recession: it is a ​period of general economic decline. A recession generally does not

last longer than one year and is much milder than a depression.

Exchange rate: ​the ​rate​ at which one currency will be exchanged for another. It is also
regarded as the value of one country's currency in relation to another currency.

Information technology: the use of electronic technology to gather, store, prc

Computer aided design:

Computer aided manufacturing:

Fiscal policy:
Inflation:

Cost push inflation:

Demand pull inflation:

STEEPLE Analysis

Social: social factors include population size, and structure, lifestyle, age groups and
education levels.

Technological: factors include the state of technological advancement and introduction

of new technologies.

Economic: factors include GDP growth rate, inflation rates, interest rates and exchange
rates.

Political: factors such as the type of government that exists and its ideology as shown
by its attitude to the free markets, imposition of tariff, business incentives offered and
the stability of the government.

Legal: any law influencing business activity such as health and safety at work,
competition law, consumer protection law, employee protection law.

Ethical: the general code of ethics followed by most people in the country.

STEEPLE Analysis: a framework for analysing the external environmental factors

affecting the businesses objectives and strategies. It is an acronym for social,
technological, economic, environmental, political, legal and ethical factors that impact
the business.

Exchange rate: the value of one currency in terms of another currency. The value of one
currency to another may increase or decrease depending on the e