IB Chapter 1.4

Who are considered as internal stakeholders of a business?

• Employees, Managers, Shareholders

• Suppliers, Customers, Banks, Special Interest groups

• Managers, Shareholders, Customers

• Government, Special interest groups, Competitors

What is a benefit of accepting responsibilities towards customers?

• Supplier loyalty, meet deadlines, special orders

• Interventional, safety, customer loyalty, repeat customers

• Consumer protection, accurate advertising

• Low turnover of staff, work incentive, easier to attract quality employees

What is a potential disadvantage of profit sharing scheme (bonuses)?

• The right to buy shares all owners of the stock benefit from success, align interests of employees with shareholders

• Both share benefits, share profits, encourage workers to work, long term profitability

• Reduce conflict between workers and shareholders

• Reduce retained profits for expansion or research and development, reduce profits for shareholders

What is the method of conflict resolution that involves an independent arbitrator hearing and deciding on a fair solution?

• Worker participation

• Profit Sharing Scheme (bonuses)

• Share ownership schemes

• Arbitration

What is the impact of expansion of the business on the local community?

• More jobs, increased spending in local bus

• Increased orders

• Fewer untrained staff, lay off untrained staff

• Reliability problems, supply delays

What is the benefit of introducing new IT into production methods?

• More efficient & flexible productions methods increase variety & quality

• Fewer untrained staff, lay off untrained staff

• Reliability problems, supply delays

• Train and promotion opportunities

What is the potential disadvantage of worker participation in decision-making?

• The right to buy shares all owners of the stock benefit from success, align interests of employees with shareholders

• Workers have real contribution, participation can motivate

• Share profits, encourage workers to work, long term profitability

• Some think wastes time, talking shops, managers feel undermined

What is the impact of takeover of a competing firm on the local community?

• More secure, promotion opportunities

• Duplicated offices or factories might close, loss of jobs

• Incomes might increase

• Benefit from economies of scale, lower prices

What is the potential disadvantage of share ownership schemes for employees?

• Both share benefits, share profits, encourage workers to work, long term profitability

• Administration costs, negative impact if price falls, dilution of ownership, limited motivation because time qualifying

• The right to buy shares all owners of the stock benefit from success, align interests of employees with shareholders

• Reduce conflict between workers and shareholders

What is the benefit of accepting responsibilities towards suppliers?

• Shareholders reluctant to sell shares which will increase share value, future interest in investment

• Supplier loyalty- meet deadlines, special orders, credit terms, struggling bus payment flexible

• Employee loyalty, low labor turnover, motivated staff, easier to recruit good employees

• Consumer protection, accurate advertising