1.4 Comprehension Questions
Unit 1.4 Stakeholders – Comprehension Questions
Read the text for this unit on InThinking Business Management and answer the questions that follow.
Please note there are no answers provided on this website for the comprehension questions. The intention is for students to use these to guide their revision. They can refer to the relevant section of the website for the content coverage of the syllabus.
The interests of internal stakeholders (AO2)
- In the context of business management, what are ‘stakeholders’?
- How do internal stakeholders differ from external stakeholders?
- Who are the ‘employees’ of an organization?
- What are the main aims of employees?
- Who are the managers of an organization?
- What do directors of a company do?
- Who are shareholders?
- What is the other name for stockholders?
- As stakeholders of a company, what are the main interests of stockholders?
- What is the difference between shareholders and stakeholders?
The interests of external stakeholders (AO2)
- What are external stakeholders?
- How do external stakeholders differ from internal stakeholders?
- Give three examples of external stakeholder groups.
- As stakeholders, what are the main interests of customers?
- Why are close rivals (competitors) of an organization considered to be a stakeholder group?
- As stakeholders, what are the main interests of the suppliers of a particular organization?
- What are financiers and why are they considered to be a stakeholder group?
- Why might the local community be interested in the operations of a business?
- Why are pressure groups an external stakeholder group?
- Give three examples of real-world pressure groups.
Possible areas of mutual benefit and conflict between stakeholders’ interests (AO3)
- What is meant by stakeholder conflict?
- How might the interests of an employer conflict with those of their employee?
- How might the interests of customers conflict with those of the shareholders of a company?
- Why might it be extremely challenging to satisfy the diversified interests of all stakeholder groups?
- What is conciliation?
- What is arbitration?
- What is industrial democracy?
- What are share ownership schemes?
- What is meant by profit related pay?
- What is meant by public relations (PR)?
Revision Flashcards
Have a go at these 10 revision flashcard tasks to review your understanding of this topic.
Review Quiz
For further practise, students should have a go at these 25 questions to test their understanding of the learning outcomes for this unit.
Which stakeholder group consists of individuals and/or organizations with an investment interest in a particular business?
Shareholders invest capital in the company that they co-own with other shareholders.
Fill in the missing parts in the following text:
- The group of senior managers who run a company on behalf of the owners of the company.
Fill in the missing parts in the following text:
- These stakeholders are part of the organization, e.g. employees, managers and shareholders.
Which stakeholder group is mainly concerned with how an organization’s operations impacts on their lifestyle, such as employment and the natural environment?
The local community will be most interested in the impact of a business on employment opportunities and the natural environment.
Which of the following is not an internal stakeholder group for an organization?
Customers are an external stakeholder group.
Which group’s main interest is how the organization’s operations impacts on the cause they support?
Pressure groups are keen to know the impact that businesses have on the causes they support.
Which group’s main interest is the pay and working conditions of their worker members of an organization?
Trade unions (labour unions) negotiate with employer representatives, with the aim to uphold the pay and working conditions of their members.
Fill in the missing parts in the following text:
- The individuals, organizations or groups with a vested interest in the actions and outcomes of a specific organization. They are directly affected by the performance of the business.
Fill in the missing parts in the following text:
- Individuals who come together or organizations that are set up for a common concern. They aim to influence government and public opinion in order to create the desired social change.
Which stakeholder group’s main interest is the organization’s level of productivity and profits?
Managers are keen to monitor and improve the productivity and profits of the business.
What are the owners of limited liability companies called?
Shareholders are the owners of limited liability companies.
Fill in the missing parts in the following text:
- Stakeholder groups that are not directly involved in the running of an organization but have a direct interest in its operations.
Which stakeholder group is most likely to be interested in changing government policies?
Pressure groups are likely to lobby governments to change policies to support their cause, such as environmental protection.
Fill in the missing parts in the following text:
- Financial institutions (such as banks) and individual investors who provide source of finance for businesses. They are interested in the organization’s ability to generate profits and to repay debts.
Which management tool helps an organization to manage the interests of as many stakeholder groups as possible?
Stakeholder analysis enables managers to assess the varying degrees of interest and influence of its different stakeholder groups.
Which tool allows an organization to analyse the level of power and interest of its various stakeholder groups?
Stakeholder mapping (or stakeholder analysis) enables managers to assess the varying degrees of interest and influence of its different stakeholder groups.
Which stakeholders would be most interested in a company’s profit as it affects their dividends and the share value of the company?
Stockholders are the shareholders of a company, so are interested in the potential dividend payments.
Which internal stakeholder group is employed by a business?
Managers are hired by the organization, so are internal stakeholders.
Fill in the missing parts in the following text:
- The people or organizations that have shares in a company. Their interest is financial, i.e. regular dividends and a higher share price.
Fill in the missing parts in the following text:
- Method of stakeholder conflict resolution with all stakeholder groups in conflict agreeing to accept the decision or judgment of the independent arbitrator.
Fill in the missing parts in the following text:
- This refers to mutually exclusive stakeholder interests.
Which stakeholder group is interested in how much of their good or service can be provided to other businesses and when they will be paid by these business customers?
Suppliers provide their goods and/or services to other businesses.
What arises because a business is unable to simultaneously meet the competing needs of all its stakeholders?
Conflict arises when the competing needs of different stakeholders cannot be met at the same time.
Fill in the missing parts in the following text:
- The general public and local businesses that have a direct interest in the activities of the organization. They are interested in the firm’s ability to create jobs and to operate in a socially responsible way.
Drag the text boxes to fill in the missing parts in the following text:
stakeholder organization internal external suppliers shareholders
A is an individual, group or that affects a business and/or is affected by it. They can be classified as (such as managers, employees and ) or (such as customers, , competitors and the government).
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