1.4 Business Assignment

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Question 1.4.1 a) Shareholders are the owners of private and public limited companies, such as L’Oreal. Stakeholders are people or organizations that has a direct interest in the performance of L’Oreal, such as Nestlé. b) Different stakeholder groups are affected by the developments at L’Oreal because they could gain poor reputation for their own products. Question 1.4.2 a) CAPP might be classed as a special interest group because it’s an organization of people who have a common interest and that is petroleum. b) The benefits of being a member of an industry trade group such as CAPP are that members are committed, funding is by the businesses that operate in that specific industry, and promotion supports the interests of the whole industry, not just individual companies or brands. Question 1.4.4 a) Two internal stakeholder groups suggested in this case study are employees and stockholders. b) One conflict that exists between the employees and stockholders is that the employees can disagree with the management decisions of the stockholders. c) The conflict could be minimized if the different stakeholders came down to a ‘best fit’ compromise, so the stakeholders are all reasonably pleased with the conduct of the business. Review Questions 1) The difference between ‘internal’ and ‘external’ stakeholders is that ‘internal’ stakeholders are members of the organization like employees, stockholders, managers and directors whereas ‘external’ stakeholders are members that doesn’t form part of the business, but they are involved like customers, suppliers and special interest groups. 3) A ‘director’ is a senior member of staff who has been elected by shareholders of a company. A ‘shareholder’ is a person who owns shares and is part-owner of a company. 4) The four main types of special interest groups (SIGs) are trade/labor unions, pressure groups, industry
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