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)
  1. In the context of business management, what are ‘stakeholders’?
  2. How do internal stakeholders differ from external stakeholders?
  3. Who are the ‘employees’ of an organization?
  4. What are the main aims of employees?
  5. Who are the managers of an organization?
  6. What do directors of a company do?
  7. Who are shareholders?
  8. What is the other name for stockholders?
  9. As stakeholders of a company, what are the main interests of stockholders?
  10. What is the difference between shareholders and stakeholders?
The interests of external stakeholders (AO2)
  1. What are external stakeholders?
  2. How do external stakeholders differ from internal stakeholders?
  3. Give three examples of external stakeholder groups.
  4. As stakeholders, what are the main interests of customers?
  5. Why are close rivals (competitors) of an organization considered to be a stakeholder group?
  6. As stakeholders, what are the main interests of the suppliers of a particular organization?
  7. What are financiers and why are they considered to be a stakeholder group?
  8. Why might the local community be interested in the operations of a business?
  9. Why are pressure groups an external stakeholder group?
  10. Give three examples of real-world pressure groups.
Possible areas of mutual benefit and conflict between stakeholders’ interests (AO3)
  1. What is meant by stakeholder conflict?
  2. How might the interests of an employer conflict with those of their employee?
  3. How might the interests of customers conflict with those of the shareholders of a company?
  4. Why might it be extremely challenging to satisfy the diversified interests of all stakeholder groups?
  5. What is conciliation?
  6. What is arbitration?
  7. What is industrial democracy?
  8. What are share ownership schemes?
  9. What is meant by profit related pay?
  10. 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 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.

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.

 

Read the following sentences and answer TRUE or FALSE:

Pressure groups use publicity stunts to raise awareness of their cause or interest.

 

Fill in the missing parts in the following text:

  - This refers to mutually exclusive stakeholder interests.

 

Fill in the missing parts in the following text:

  - These stakeholders are part of the organization, e.g. employees, managers and shareholders.

 

Read the following sentences and answer TRUE or FALSE:

Stakeholders own shares in the company so are interested in the profits or losses of the organization.

 

Read the following sentences and answer TRUE or FALSE:

Stakeholder conflict arises because an organization cannot meet the needs of all its stakeholders all at once.

 

Read the following sentences and answer TRUE or FALSE:

Each shareholder has equal voting rights in the decisions made by the company.

Shareholder have one vote per share they own, so do not have equal voting rights in the decisions made by the company.

Which of the following groups is not an external stakeholder for an organization?

Directors are internal stakeholders, not external stakeholders.

Fill in the missing parts in the following text:

  - These are the firm’s clients, individuals and other businesses, who purchase the organization’s goods and/or services. Their interests include competitive prices, fit-for-purpose products and overall value for money.

 

Which of the following is most likely to be internal stakeholders of a private limited company?

Shareholders of a private limited company are the owners, so are classified as internal stakeholders

Read the following sentence and answer TRUE or FALSE:

Directors are hired to be responsible for overseeing certain operational functions in an organization.

Managers are hired for this function.

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.

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 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:

  - Stakeholder groups that are not directly involved in the running of an organization but have a direct interest in its operations.

 

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.

 

Read the following sentences and answer TRUE or FALSE:

Share ownership schemes can be used to help resolve potential conflict between shareholders and employees.

 

Fill in the missing parts in the following text:

  - Method of stakeholder conflict resolution which aims to align the incompatible interests of different stakeholder groups by helping different parties to better understand each other’s interests.

 

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 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.

Read the following sentence and answer TRUE or FALSE:

The government is keen to see that all businesses operate in a legal and socially responsible way.

 

Read the following sentences and answer TRUE or FALSE:

Stakeholder mapping is a management tool used to deal with stakeholder conflict.

 

Which of the following is not an internal stakeholder group for an organization?

Customers are an external stakeholder group.

Read the following sentence and answer TRUE or FALSE:

Individuals belong to a single stakeholder group so have different interests in the organization.

They can belong to multiple stakeholder groups.

Total Score:

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