• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Most firms are affected by a number of factors such as customers, employers, suppliers, creditors and local community which are known as stakeholder groups.

Extracts from this document...

Introduction

Some people believe that shareholders run the business and it works by itself. However, this is not true. Most firms are affected by a number of factors such as customers, employers, suppliers, creditors and local community which are known as stakeholder groups. Shareholders are interested in the way a company operates and performs. Shareholders are the people who own the company and share the profit. Managers and directors ought to work on behalf of shareholders. The main motivating factor of any company proprietor is simply to make money. Therefore the conflict could exist between the desire to make money and the provision of a service to the customers and other stakeholders. The issue is that whether manager's responsibility should be to shareholders alone or should they also regard the stakeholders' wants. Firstly, there is the shareholder concept. Shareholders employ managers and directors to run the company. As the owners of the company, shareholders usually have purposes to maximise their dividends and increase the value of their shares, which requires short term profits. If the company is wrong, shareholders can tackle with it by the AGM (annual general meeting). Company have to protect shareholders' investment, and it will effect to shareholders which keep their money in the business. Shareholders have massive of stock out of whole stock in the company. ...read more.

Middle

Starbucks' strong commitment to the working environment is regularly supervised by an environment committee. With better working practices, performance will be improved as the efficiency increases. They believe that the welfare of employees and the quality of the products are closely linked. Secondly, there are suppliers. Suppliers usually want to build up the long-run relationship with the firms. Firms should treat suppliers with respect and when they have a project or important business plan, suppliers should be involved in the decision making. According to one of the Marks & Spencer's traditions, they have meetings with suppliers regularly and they carry out the number of surveys to enquire the supplier and franchisee satisfaction. In addition, they also attend major UK agricultural exhibitions to listen to farmers' comments on their businesses. They try to develop a strong partnership with the suppliers. Firms and suppliers should always trust each other: suppliers have to deliver material on time and also companies have to pay on time. Therefore, firms can be supplied with what the business needs, and when it needs it. When the business organisation increases in size it will buy more goods from suppliers and borrow more which would be a benefit for the suppliers. Thirdly, there are the customers. Customers, who are the people who spend money on goods, are the reason how firms can exist. ...read more.

Conclusion

Sometimes local community support the companies if firms want to expand or make other change. If firms build more stores, they will be required to build more car parking facilities, which will generate more traffic jam. Eventually this could create more pollution. If local community realised in advance which would be a bad effect in local area, they would report it to local people and to the company. Similarly, there is an example of sweatshop in Jakarta, the plant, owned by a Korean company, Dae Joo Corporation, made backpacks for Adidas, Jansport and other famous brands. However this factory shut down because of factory was accused by anti-sweatshop campaigners The Company forced overtime work and a dangerous working environment. Last year they invested by Workers Rights Consortium (WRC), which is monitors as a community. This community look after employees' right. On the other hand, firms can also gain from better relations with the community like more favourable media coverage. In conclusion, firms cannot completely ignore the environment they are in. If a firm only concentrates on their profit, they cannot even achieve the smallest things. Companies which only concentrate on profits are unlikely to have a good relationship with stakeholders which would lead to the company's failure. They should cooperate with suppliers, employees, communities and customers. If they treat each others with trust and respect, satisfaction and benefits would be given to both, the company and also the stakeholders. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. Oxfam stakeholder

    Oxfam also runs several Trail walker events in Hong Kong, Australia, New Zealand, the United Kingdom and Japan.Oxfam has near to 15,000 shops worldwide Page Oxfam The purpose of setting aims and objectives is to maintain a baseline for success by setting new ideas.

  2. The Business Environment Coursework. Describe the type of business, purpose and ownership of ...

    For example when the laws changed regarding smoking, Tesco's had to ensure the rules were enforced in their stores and offices and they had to provide smoking areas for staff. If Tesco can keep up to date with changes in politics and laws they will be able to plan and prepare for any changes that may affect them.

  1. There are many stakeholders in J-Sainsbury's. These are the local community; the local communities ...

    The employees would work at a poor standard, and if employees are very unhappy with their job they would also starts fight in the fight place, and not work as a team, which is very bad for a big company like J-Sainsbury's because this could give a bad image to the whole organisation.

  2. Profit maximisation

    This is known as the assumption of independence. We assume that firms believe that their decisions do affect their rivals, and that their rival's decisions will affect them. There is freedom of entry of new firms into the industry. In these two respects therefore monopolistic competition is like perfect competition.

  1. A stakeholder in an organization is (by definition) any group or individual who can ...

    The results could be based on the different functions. A stakeholder can be anyone who finances the project, someone who has knowledge and skills to produce a certain product, someone who is expert in the related field, an organization whose rules developers must obey or an external organization that can influence project towards the success, such as an environmental group or a competitor.

  2. Business report on J Sainsbury's.

    A limited company on the other hand is a separate legal entity. That is, the company exists in law separately from the owners. The company itself is sued rather than the shareholders, so their personal assets are not at risk.

  1. Comparison of stakeholders interest and influence. Apple vs. Mercedes Benz

    (1) This provides Apple Inc. with what they need and sell off the products to their customers to make profit. Although, if supplier demands have not been met by the company, it is possible for them to change companies and supply elsewhere appropriate which can cause many concerns and delays for the former company (Apple).

  2. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    Brand (F&F, organic, Value, Mobile, and Bank) Packaging (caring for environment, http://www.tescoplc.com/corporate-responsibility/our-community-promises/caring-for-the-environment/waste-packaging-and-recycling/ ) Task 4: Promotion In this task I will explain the range of promotional methods that Tesco uses to promote its products. I will discuss what advertising methods Tesco?s issues, what sales promotion?s Tesco?s uses, how they use merchandising and how they use public relations.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work