Objectives: ● shareholders (owners), employees, customers, managers,…

The idea

Different stakeholders pursue specific objectives when interacting with a business. Shareholders (owners) seek profit and dividend growth, while managers aim for promotion, bonuses, and business expansion. Employees desire fair wages, good working conditions, and job security. Customers want high-quality products at competitive prices. Suppliers rely on prompt payment and regular, profitable orders. The local community expects minimal disruption, low pollution, and local employment opportunities. Pressure groups campaign for ethical or environmental responsibility, and the government requires legal compliance, tax revenue, and job creation. Analysing these distinct goals helps explain stakeholder conflicts.

What earns the marks

• Identify that shareholders and owners primarily focus on financial returns, such as dividends and rising share prices.
• Explain that employees and managers seek job security, career progression, and improved financial rewards.
• Describe how customers prioritise value for money, product quality, and reliable customer service.
• Outline that external groups like the government and local community focus on legal compliance, tax revenues, and minimising negative externalities like pollution.
• State that suppliers require reliable contracts and timely payments to maintain their own cash flow.
• Explain that pressure groups aim to influence business behaviour towards ethical and sustainable practices.

Common mistakes and how to put them right

• Stating that the government's main objective is to run the business.

  Put it right by explaining the government wants tax revenue and legal compliance.

• Assuming suppliers only care about the price of goods sold.

  Put it right by highlighting their need for prompt payment and long-term contracts.

• Failing to distinguish between managers and owners.

  Put it right by noting managers often seek operational control and bonuses, whereas owners seek overall profit and dividends.

Exam tips

• Memorise at least one specific objective for each of the eight named stakeholder groups to use in application questions.
• When evaluating a business expansion, contrast the positive objectives of shareholders (profit) with the negative concerns of the local community (noise or traffic).
• Use pressure groups as an example of external influence when discussing how a business might be forced to change its environmental policies.