1.4 Comprehension Questions

Unit 1.4 Stakeholders – Comprehension Questions

Read the text for this unit of the IB Business Management syllabus and answer the questions that follow.

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)?

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 is most likely to have an interest in the financial performance and survival of a business?

Shareholders (the owners of a company) are interested in the survival and profitability of the business.

Which stakeholder group owns part of a company and is interested in its financial performance?

Shareholders are the (part)owners of a company.

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 group of senior managers who run a company on behalf of the owners of the company.

 

Read the following sentences and answer TRUE or FALSE:

Conciliation is a service that strives to align the incompatible interests of different stakeholder groups.

 

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.

 

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

 

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.

 

Fill in the missing parts in the following text:

  - The people hired to be responsible for overseeing certain functions, operations or departments within an organization.

 

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.

 

Read the following sentences and answer TRUE or FALSE:

Suppliers, the local community, pressure groups and the government are external stakeholder groups.

 

Fill in the missing parts in the following text:

  - These are the firm’s rivals, which operate in the same industry and contest for the same customers.

 

Read the following sentences and answer TRUE or FALSE:

The Board of Directors of a company control the running of the business.

 

Read the following sentences and answer TRUE or FALSE:

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

 

Read the following sentences and answer TRUE or FALSE:

 
Deforestation is an example of a pressure group campaign.

Pressure groups would be against deforestation.

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.

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.

 

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

Customers are an external stakeholder group.

Read the following sentences and answer TRUE or FALSE:

Different stakeholders are likely to have different interests in an organization.

 

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.

 

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.

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.

Read the following sentences and answer TRUE or FALSE:

All stakeholder groups are directly affected by the performance of the business.

 

Total Score:

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