9609 · 1.5.2
The relative importance and influence of stakeholders on business activities flashcards
Revision flashcards for Cambridge 9609 The relative importance and influence of stakeholders on business activities (syllabus 1.5.2). Flip, recall, then mark a real past-paper question.
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Shareholder influence?
AGM votes, board appointment, share price pressure on CEO.
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Employee power?
Scarce skills, union collective bargaining, strike threat.
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Customer power?
High when many alternatives — low switching cost.
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Government power?
Regulation, fines, tax, planning permission, contracts.
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High power + high interest?
Manage closely — key shareholders, major clients.
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High power + low interest?
Keep satisfied — e.g. regulators, institutional investors.
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Stakeholder capitalism?
Balance all groups, not only shareholders — long-run sustainability.
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Link to 7.2?
Communication manages stakeholder expectations.
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What is Mendelow's Matrix?
A strategic tool that maps stakeholders on a grid based on their level of power and interest, helping a business determine the appropriate management strategy for each group.
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What is the difference between stakeholder 'power' and 'interest'?
Power is the stakeholder's ability to influence a business's actions. Interest is the extent to which a stakeholder is affected by a business's actions and their willingness to get involved.
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What management strategy is required for stakeholders in the 'Manage Closely' quadrant of Mendelow's Matrix?
These are key players with high power and high interest. The business must fully engage with them and make the greatest effort to satisfy their needs and objectives.
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Provide an example of a common stakeholder conflict.
Shareholders desire higher profits, which may require cost-cutting. This conflicts with employees, who desire higher wages and better working conditions, which would increase business costs.
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What is a common influence tactic used by pressure groups?
Organising consumer boycotts or using social media and PR campaigns to generate negative publicity, thereby damaging the firm's brand image and sales to force a change in its behaviour.