GCSE BUSINESS STUDIES

Stakeholders and

Environmental Issues

Learning Objectives All students will be able to define the term

stakeholder Most students will be able to explain at least

four different stakeholders in a typical business

Some students will be able to describe different stakeholders interests, influence and expectations in a business.

Business Stakeholders

Stakeholder groups:

Management

Employees

Government

Suppliers

Environment

Local Community

Customers

Shareholders

The Business

Business Stakeholders Responsibilities to stakeholder groups: Shareholders – Generate profits and pay dividends Customers – provide good quality products at

reasonable prices. Safety, honesty, decency and truthfulness

Employees – health and safety at work, security, fair pay

Suppliers – pay on time, pay fair rates for the work done, provide element of security

Business Stakeholders Local Community – provide employment, safe working

environment, minimise pollution and negative externalities – provide external benefits?

Government – abide by the law, pay taxes, abide by regulations

Management – their aims versus those of the organisation as a whole

Environment – limit pollution, congestion, environmental degradation, development etc

Business Stakeholders Tensions: Profits versus higher wages Expansion versus development Production versus pollution Supplier benefits versus consumer

prices/lower costs Survival of the business versus needs of

stakeholders

How Business can effect the Environment Urban blight – excessive development, inappropriate

development, use of greenbelt land Waste – land-fill? re-cycling? burning? Energy use – renewable energy, non-renewable resources Global Warming – fact or fiction? Pollution:

Noise Air Land Sea Water

Externalities Impact on a third party of a business decision

Those affected not involved in the decision Negative externalities – negative effects of

business activity – pollution, urban development, etc

e.g. Out of town shopping centres – impact on city centres

Externalities Positive Externalities:

Benefits to third parties of business activity E.g. new infrastructure as a result of development, side

effects of research and development, technology (the Internet?), convenience, improved standards of living

Out of Town shopping centres – greater ease of access, everything in one place, pleasant environment to shop in etc

Externalities Out of Town shopping centres:

Highlights complexity of the interaction of positive and negative externalities

Government policies – encourage business activity that leads to positive externalities and discourage those that lead to negative externalities.