CAIE A-Level Business 1.5 Stakeholders in a Business Question Bank

Analyse one responsibility to a business of an employee as a stakeholder.

Indicative content

Responses may include:

AO1 Knowledge and understanding

- To work effectively / productively.

- Meet the business' clear expectations.

- To fulfil terms of contract of employment.

- To follow business policy and regulations.

- Not damage the business reputation.

- Not give/sell employer's trade secrets to competitors.

- Being honest.

- An employee has the responsibility to perform according to the terms of contract of the employment. (1 mark × × )

4

AO2 Application

- Examples may be given in the context of different employees - managers / shopfloor workers.

- Effective and productive employees will perform the duties of their position to the best of their ability.

- Come to work when expected, manage their time well and be a positive part of the team.

- Following company policies and protocols leads to fewer accidents and legal issues.

- Consult managers with any questions or problems to get the job right first time and avoid costly waste.

- Accept responsibility for their own mistakes to prevent a blame culture affecting working relations.

- Work for the good of the business to help it maintain its position in the market.

- Developed application - an employee has a responsibility to consistently follow the policies and procedures of a business and maintain the reputation of that business. (2 marks $\times 2$ )

- Limited application- an employee has a responsibility to always be punctual when attending work. (1 mark ± ± )

AO3 Analysis

- Ensures consistency, reduces risk, achieves high standards therefore helps a business achieve its objectives.

- Improves efficiency and performance therefore the business will have effective use of resources.

- Responsible employees give a business the ability to compete well and improve market share.

- Reduces the risk of mistakes, waste, accidents, legal issues - all of which will prevent the success of the business.

- Developed analysis - if an employee remains loyal to a business and does not share internal production secrets with competitors the business will likely remain very competitive and continue to achieve high levels of profitability. ( 2 marks □ × 2 )

- Limited analysis - when an employee continually achieves high standards of work performance the business will prosper. (1 mark □ × )

Accept all valid responses.

Analyse one way in which conflict between stakeholders may affect a business.

Indicative content

Responses may include:

NOTE: Stakeholder conflict may be between different stakeholder groups e.g. managers and shareholders, or between members of the same stakeholder group e.g. employee vs employee.

AO1 Knowledge and understanding

Conflict may affect a business in the following ways:

- Demotivated workers

- Reduced profit

- Slow decisions

- Industrial action

- Damage to reputation

- Conflicting objectives

- Conflict between different stakeholders may lead to industrial action. (1 mark □ × 1)

4

AO2 Application

- Different stakeholders in a business may have different expectations - resulting in conflict - management want to invest in more capital equipment - workers fear for their jobs.

- Different stakeholders may require a business to operate in different ways - employees will focus on wages/salaries and working conditions while directors may favour higher dividends to attract more investment.

- Potential for conflict is real - so many stakeholders internal and external with different agendas.

- Developed application - managers may wish to automate production in search of a more efficient process of production - employees/workers may fear for their jobs and be less motivated. (2 marks ± 2 )

- Limited application - workers may strike in order to preserve their jobs. (1 mark ± 1)

AO3 Analysis

- Shareholders - will focus on bottom line - short-term profits - conflict with long term planning concerns of senior management.

- Core business purpose - some stakeholders such as government, community, overseas workers may seek to have CSR as a business objective - other stakeholders will be concerned at the cost - shareholders concerned at a drift from commercial considerations - the business of business should be business not social support.

- Conflict between employees and owners/managers - aim of management is to contain cost increases arising from increase wages/salaries - workers and unions threaten strike.

- Local community may object to business decisions - new factory - impact on the local environment.

- Customers want lower prices - impact on quality of product as viewed by the business.

- Government increases taxes on businesses/employees - business does not absorb the tax, puts up prices and customers become critical and threaten to switch to other providers.

- Developed analysis - shareholders will likely focus on the bottom line in pursuit of profits and dividends which may have consequences for long term business planning for a business that requires to build up internal financial resources for growth investment. Shareholders will likely oppose proposals for more retained earnings. (2 marks L2)

- Limited analysis - shareholders will likely only focus on the bottom line and seek profit maximisation regardless of the effect on other stakeholders. (1 mark □ L1)

Accept all valid responses.