1.1.3 Stakeholders and their objectives


    Stakeholders  –     Someone who has an interest or concern or is affected by the operations m                              and objectives of a business


    Possible stakeholders include:



    • Employees – want high wages and good working condition
    • Shareholders – want high profits so they get high dividends
    • Consumers – want high quality goods with low prices
    • Managers – want high salaries and bonuses and other personal benefits
    • The Government – want to earn corporation tax from the business’s profits
    • Suppliers – want businesses to stay successful so they still have customers




    • Different stakeholders have different objectives depending on how the business will affect them, this leads to conflicting objectives.
    • For example, managers may want a big bonus, but this would decrease the money that goes into shareholder dividends.
    • This can become a problem as when a firm sells shares they relinquish some of their control in order to gain this investment.
    • This can lead to shareholder activism – when shareholders exercise their power as part owners to manipulate the company into fulfilling their motives.




    CSR   – refers to the companies taking responsibility for their impact on the local m                     area and beyond society, even including the environment

    • CSR can be shown by making decisions that benefits all stakeholders or takes them all into account (rather than just shareholders).
    • Treating customers, employees, local community and suppliers well.
    • Examples of this would be avoiding polluting activities and contributing positively to lives in the local community.
    • Companies may only do the bare minimum that the law entails and still claim CSR as it is not regulated in any way.



    • Goes beyond CSR
    • A moral code of ethics that a business follows e.eg. not investing in countries which have human rights issues.
    • Being moral despite the finance (cost) e.g. The Body Shop does not use ingredients tested on animals.



    • Following a code of practice which reflects moral values.
    • Considers all the groups affected by the business’ practices.
    • This is the most ethical way to practice business and again goes beyond CSR


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