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Business Unit 2 Strand A

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Introduction

Strand A - Stakeholders What is a stakeholder? A stakeholder is "any person or organisation which has an interest in a business" GCSE Applied Business For OCR An individual or group with an interest in the success of an organization in delivering intended results and maintaining the viability of the organization's products and services. Stakeholders influence programs, products, and services www.ichnet.org/glossary.htm A person, group, or business unit that has a share or an interest in a particular activity or set of activities. www.georgetown.edu/uis/ia/dw/GLOSSARY0816.html A stakeholder is a person or business with an interest in another business. They could have an interest in this business because it directly affects them, through how it operates. Stakeholders can be customers, employees, owners, shareholders, the local community, the government, pressure groups, suppliers and financers. Examples of shareholders are: Students are shareholders in their school Doctors and patients are shareholders in their hospital A stakeholder is any person or business that has an interest in another business. Stakeholders can be: * Customers * Employees * Owners * Shareholders * The local community * The government * Pressure groups * Suppliers * Financers Stakeholders and influence As stated in GCSE Applied Business For OCR, "All stakeholders have some influence on the business, but this can vary hugely". Powerful stakeholders can majorly influence what happens in a business. Stakeholders with little power don't have a lot of influence on what happens in a business, and their views can virtually be ignored by the business. Stakeholders and conflict The different groups of stakeholders each want different things and so may be in conflict. E.g. Suppliers want high prices for products and customers want low prices. Businesses are likely to listen to the more powerful stakeholders, as they can help the business more. Stakeholders can be good or bad for a business, depending on their interests. For example the local community can be a bad stakeholder for a business, because they may complain about things like air pollution, the company may then ...read more.

Middle

Owners and shareholders as stakeholders Owners and shareholders have similar interests in the business, as they have both invested money. If the business is successful they will make money, if the business is unsuccessful, they will lose money. Shareholders try to make money in two ways. One way is, if the business does well then the value of the shares increases. The shareholders can then sell the shares, and make a profit, or they can keep the shares and hope that they increase further. However, there is a danger that the shares will decrease in value, if this happens then the shareholders could lose money. The other way is that the shareholders expect to be paid a dividend, by the company, twice a year. This is in reward for investing in the company. The dividend may vary, depending on how well the company is doing, and what is happening within the company. For example, there may be no dividend, or a small dividend, if the company wanted to use the money to expand. In instances like this, the interests of the shareholders and the directors are likely to conflict. Shareholders are interested in raising the value of the shares. They want the company to do well, so that this will happen. The amount of influence an individual shareholder has on a companies decision depends on two things: * How much money the shareholder has invested. Some shareholders have only a few shares and so do not have much influence on a company, however some shareholders have many shares and so have a lot on influence on a company. * 'The number and views of other shareholders' GCSE Applied Business For OCR. If a shareholder has a disagreement on a decision made by the company, then there may be a vote at the shareholders meeting. Even if not all of the shareholders agree, the shareholders with the most shares can still outvote the others! ...read more.

Conclusion

The suppliers want the business to do well so that they keep buying from the suppliers. If the business did not do well, then it might be because the products were not of a good quality. If this was the reason, then the business would stop using that supplier and so the supplier would lose money. Suppliers are more likely to be more powerful, and able to keep their customers (the businesses) buying from them, if: * "There are few other companies supplying the same item or no substitutes for it" GCSE Applied Business For OCR. This means that if the supplier is a major supplier, and the only one that the business can buy the product from, then they are likely to be able to keep their customers. * They have many customers (businesses buying from it), and the companies wanting to; stop using the supplier, lower prices, ect only place a few small orders. Financers as stakeholders People or organisations that put their money into a business are called financers, because they finance the business. Financers provide grants or loans, and how much influence they have on the business depends on how they finance the business. Grants do not have to be repaid as they are monetary aids, given to the business, financers who give grants do not have as much influence on the business. Loans however, do have to be repaid and so financers of loans can have a lot of influence on a business, until the loan is paid off. Sometimes financers offer a trade or money for shares or influence in a company, this interest in the company makes them shareholders. Financiers can be: * The government - The government finances business in the public sectors, including schools and hospitals. These businesses provide services for the community and are financed to do this. The businesses have to produce special accounts, to show that they are using the finance provided wisely and are not misusing the finances. * Local authorities and The EU * Banks * Venture Capital Companies * Business Angels ...read more.

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