Business and Stakeholders Objectives

Identify which of the following is not an internal stakeholder.

• customers

• employees

• managers

• owners

Identify which of the following stakeholders are most likely to want a business to offer low prices.

• customers

• shareholders

• managers

• suppliers

Jasmine started her own business two months ago. Which of the following is likely to currently be Jasmine’s main business objective?

• business growth

• survival

• gaining market share

• increasing profits

True or false: The only objective of a public sector business is to maximise profits.

• True

• False

Answer explanation

Public sector businesses may want to operate at a profit in order to not lose any money, but this will not be their only, or primary, objective. Public sector businesses are run by the government primarily to benefit the citizens of a country (for example, a public transportation network or publicly owned schools). This is the opposite of private sector businesses, where the main aim will be to make a profit.

Identify a reason why employees may want a business to grow.

• t secures their jobs as there is more work.

• Employees will get a share of the profit.

• They will not want a business to grow – they would rather it stay the same size.

• Growth will reduce costs.

Identify which of the following business structures is not concerned with making a profit.

• Social enterprises

• Partnerships

• Sole trader

• all of the options

Answer explanation

All of these business structures are concerned with making a profit. It is easy to forget that, although social enterprises exist because they want to help people, the way they do this is by making a profit, which can be reinvested back into the services they provide. All business structures are concerned with making a profit, but what they do with that profit depends on the business’s aims.

True or false: Suppliers are known as external stakeholders.

• True

• False

Answer explanation

Suppliers are known as external stakeholders. An external stakeholder is a group that has an interest in a business but operates outside the business. A supplier will want to ensure that it gets paid on time. It may also want the business it supplies to to grow, in the hope that it will get more custom. Internal stakeholders are groups that have an interest in the business but are inside the business, such as employees.

True or false: Providing an affordable service may be an objective for a social enterprise.

• True

• False

Answer explanation

Providing an affordable service may be an objective for a social enterprise. Social enterprises are created to help people in need, or for another ‘good cause’, so they set social objectives. Providing an affordable service would be an objective for a social enterprise as it means that the service is accessible to everyone. A social enterprise hopes that the service it provides, although affordable, will still generate some profit, which it can then put back into the business.

Many businesses are dependent on __________ for survival, growth and to keep owners or shareholders happy.

In social enterprises, making profit is generally not the driver behind the business model and they are usually ________ in the business.