Pearson Edexcel · A-Level · Economics B
Course version: 9EB0 · Version from Sept 2015
B) Stakeholder objectives
Full specification wording
Stakeholders (economic agents) and their objectives: b) Stakeholder objectives
Stakeholders are individuals or groups with a vested interest in a business's activities.
Checked against the Pearson Edexcel 9EB0 specification (opens in a new tab) on .
- Point 2 of 4
- 4 key terms
Study notes
From the checked teaching notes for this specification point.
The idea
Stakeholders are individuals or groups with a vested interest in a business's activities. Different stakeholders have distinct objectives. Shareholders typically seek profit maximisation, high dividends, and capital growth. Employees aim for higher wages, job security, and better working conditions. Customers desire high-quality products, low prices, and excellent service. Suppliers want regular orders and prompt payment. The local community expects job creation and minimal environmental impact, while the government seeks tax revenue and legal compliance. Understanding these diverse objectives is crucial for analysing business decisions, as a firm must balance these interests to maintain long-term sustainability and positive relations.
What earns the marks
- Shareholders' primary financial objectives include profit maximisation, capital growth, and a high dividend yield.
- Employees seek objectives such as wage increases, job security, and improved working conditions.
- Customer objectives focus on value for money, product quality, and reliable customer service.
- Suppliers require timely payments, fair contract terms, and consistent order volumes to maintain cash flow.
- The government and local community expect tax generation, employment opportunities, and environmental protection.
Common mistakes and how to put them right
Confusing shareholders with stakeholders.
Put it right: Shareholders are just one type of stakeholder who own part of the business, whereas stakeholders include anyone affected by the business.
Assuming all stakeholders want the business to maximise profits.
Put it right: Recognise that while shareholders want profit maximisation, customers want lower prices and employees want higher wages, which can reduce profits.
Treating the government solely as a regulator.
Put it right: Acknowledge that the government is also a stakeholder seeking tax revenues and employment generation from the business.
Exam tips
- When evaluating a business decision, explicitly state which stakeholder group benefits and which group might be disadvantaged.
- Use specific examples of stakeholder objectives, such as a supplier's need for 30-day payment terms, to strengthen your analysis.
- Remember that stakeholder objectives can change over time depending on the economic climate and business performance.
Try the lesson
The start of the Stakeholders (economic agents) and their objectives: b) Stakeholder objectives lesson, made from checked teaching notes for this specification point.
Have a go first
Which of the following is most likely to be the primary economic objective of the shareholders of a large public limited company?
Listen
Stakeholders are individuals or groups with a vested interest in a business's activities. Different stakeholders have distinct objectives. Shareholders typically seek profit maximisation, high dividends, and capital growth. Employees aim for higher wages, job security, and better working conditions. Customers desire high-quality products, low prices, and excellent service. Suppliers want regular orders and prompt payment. The local community expects job creation and minimal environmental impact, while the government seeks tax revenue and legal compliance. Understanding these diverse objectives is crucial for analysing business decisions, as a firm must balance these interests to maintain long-term sustainability and positive relations. A strong answer earns marks for these points. Shareholders' primary financial objectives include profit maximisation, capital growth, and a high dividend yield. Employees seek objectives such as wage increases, job security, and improved working conditions. Customer objectives focus on value for money, product quality, and reliable customer service. Suppliers require timely payments, fair contract terms, and consistent order volumes to maintain cash flow. A common slip: Confusing shareholders with stakeholders. Instead, shareholders are just one type of stakeholder who own part of the business, whereas stakeholders include anyone affected by the business. Exam tip: When evaluating a business decision, explicitly state which stakeholder group benefits and which group might be disadvantaged.
See it
Key words
Say what each word means before you turn the card.
Stakeholders
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Profit maximisation
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Shareholders
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Economic agents
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See every definition
- Stakeholders
- Individuals or groups with a vested interest in a business's activities, whose distinct objectives a firm must balance to maintain long-term sustainability and positive relations.
- Profit maximisation
- A primary financial objective of shareholders, alongside high dividends and capital growth.
- Shareholders
- One type of stakeholder who own part of the business and typically seek profit maximisation, high dividends and capital growth.
- Economic agents
- The term used in the section heading for stakeholders and the groups whose objectives are examined.
Label the diagram
Some boxes have lost their names. Pick the right name for each number.
1Box 1
2Box 2
3Box 3
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