Pearson Edexcel · GCSE · Business
Course version: 1BS0 · Version from Sept 2017
Stakeholders and businesses: ● how stakeholders are affected by business…
Full specification wording
Business stakeholders: Stakeholders and businesses: ● how stakeholders are affected by business activity ● how stakeholders impact business activity ● possible conflicts between stakeholder groups.
Stakeholders are groups with a vested interest in a business.
Checked against the Pearson Edexcel 1BS0 specification (opens in a new tab) on .
- Point 3 of 3
- 4 key terms
Study notes
From the checked teaching notes for this specification point.
The idea
Stakeholders are groups with a vested interest in a business. Business activities affect them directly; for example, expanding a factory creates jobs for the local community but increases noise pollution. Conversely, stakeholders impact business activity; customers can boycott products, forcing a change in practices, while suppliers can delay deliveries, halting production. Because groups have different priorities, conflicts frequently arise. Owners usually seek higher profits by keeping costs low, which directly conflicts with employees demanding higher wages or suppliers wanting higher prices for materials. Understanding these two-way dynamics is crucial for managing relationships and ensuring long-term business success.
What earns the marks
- Identify specific ways a business decision, such as relocation or expansion, affects named stakeholders like employees or the local community.
- Explain how a stakeholder group can alter business behaviour, such as customers demanding environmentally friendly packaging.
- Analyse a conflict of interest between two specific groups, such as shareholders wanting higher dividends versus employees wanting pay rises.
- Evaluate the relative power of different stakeholders in a given business scenario and how this influences corporate decision-making.
Common mistakes and how to put them right
Confusing stakeholders with shareholders.
Put it right: Shareholders are just one type of stakeholder who own part of the business, whereas stakeholders include anyone affected by it.
Providing generic conflicts without context.
Put it right: Link the conflict to the specific business scenario and the exact groups provided in the case study.
Assuming stakeholders only experience negative impacts.
Put it right: Discuss positive impacts, such as local communities benefiting from infrastructure improvements funded by the business.
Exam tips
- When asked about stakeholder conflict, explicitly name the two groups involved and state exactly what they disagree on.
- Use the case study to determine which stakeholder group has the most influence over the specific business in the question.
- Always consider the financial implications of resolving a stakeholder conflict, such as the cost of increasing wages to appease employees.
Try the lesson
The start of the Business stakeholders: Stakeholders and businesses: ● how stakeholders are affected by business activity ● how stakeholders impact business activity ● possible conflicts between stakeholder groups. lesson, made from checked teaching notes for this specification point.
Have a go first
A local manufacturing business decides to expand its factory by building on a nearby greenfield site. Which stakeholder group is most likely to be negatively affected by the increased noise and traffic during the construction phase?
Listen
Stakeholders are groups with a vested interest in a business. Business activities affect them directly; for example, expanding a factory creates jobs for the local community but increases noise pollution. Conversely, stakeholders impact business activity; customers can boycott products, forcing a change in practices, while suppliers can delay deliveries, halting production. Because groups have different priorities, conflicts frequently arise. Owners usually seek higher profits by keeping costs low, which directly conflicts with employees demanding higher wages or suppliers wanting higher prices for materials. Understanding these two-way dynamics is crucial for managing relationships and ensuring long-term business success. A strong answer earns marks for these points. Identify specific ways a business decision, such as relocation or expansion, affects named stakeholders like employees or the local community. Explain how a stakeholder group can alter business behaviour, such as customers demanding environmentally friendly packaging. Analyse a conflict of interest between two specific groups, such as shareholders wanting higher dividends versus employees wanting pay rises. Evaluate the relative power of different stakeholders in a given business scenario and how this influences corporate decision-making. A common slip: Confusing stakeholders with shareholders. Instead, shareholders are just one type of stakeholder who own part of the business, whereas stakeholders include anyone affected by it. Exam tip: When asked about stakeholder conflict, explicitly name the two groups involved and state exactly what they disagree on.
Key words
Say what each word means before you turn the card.
Stakeholders
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Shareholders
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Conflict of interest
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Corporate decision-making
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See every definition
- Stakeholders
- Groups with a vested interest in a business, which are affected by business activity and can impact business activity.
- Shareholders
- One type of stakeholder who own part of the business.
- Conflict of interest
- A disagreement between two specific groups, such as shareholders wanting higher dividends versus employees wanting pay rises.
- Corporate decision-making
- The process influenced by the relative power of different stakeholders in a given business scenario.
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