P2 & D1: In a detailed report, explain the implications for the business and
stakeholders of a business operating ethically (Primark).
Task 1:
Stakeholders
a) Explain the term stakeholders
A stakeholder is anyone with an interest in a business. Stakeholders are
individuals, groups or organisations that are affected by the activity of the
business.
b) Differentiate between stakeholders and shareholders
A shareholder owns part of a company through stock ownership, while a
stakeholder is interested in the performance of a company for reasons other
than just stock appreciation.
c) Classify stakeholders into internal and external and show how they relate to
the business (Primark).
All businesses depend on a variety of stakeholders. Some stakeholders are
internal to the business, such as a company’s employees. Other stakeholders
are external to the business, such as suppliers, customers, trade unions, civil
society groups, shareholders and the communities in which the business
operates.
Task 2:
1
, a) Explain how conflicts of interest can occur between the various stakeholders
of Primark;
Shareholders vs. Environmentalist
Managers vs. Employees
Customers vs. Suppliers
Government Agencies vs. Organisations
•Shareholders vs. Environmentalist
The conflict between these two parties is over how Primark attempt to cut
environmental issues they may have, for instance an environmentalist will need
Primark to profit the environmental by utilizing more secure materials to make
their clothes. However shareholders might not have any desire to do this due to
the price of secure materials that costs a significant sum, more than standard
materials. Therefore, these two parties will have an irreconcilable situation.
•Managers vs. Employees
When it comes to the two stakeholders of manager and employees the conflict
varies. One primary issue is that managers for the most part look for high
benefits for their business (like Primark) this might be hesitant to see the
business pay high wages to staff and may simply stick to the lowest wages or
just above. One affect for the business with this issue is that the business may
pick up a contrary view with the general population and media despite the fact
that they are expanding benefits yet individuals might not have any desire to
work for them due to the unethical wages, with this negative media squeeze
they may lose staff and clients.
•Customers vs. Suppliers
With regards to these two partners customers need great quality items and
administrations that are good value for money. However suppliers will most likely
be unable to deliver the best quality items each time or may even create less
expensive low quality items. With regards to a business customers are the most
important resource of the business, so if they quit buying the items then the
business will begin to decay and make less deals meaning they won't hit their
objective benefit confine. Additionally for the business this implies they may
need to change suppliers to a superior quality more dependable source which
implies they will spend more cash.
2
stakeholders of a business operating ethically (Primark).
Task 1:
Stakeholders
a) Explain the term stakeholders
A stakeholder is anyone with an interest in a business. Stakeholders are
individuals, groups or organisations that are affected by the activity of the
business.
b) Differentiate between stakeholders and shareholders
A shareholder owns part of a company through stock ownership, while a
stakeholder is interested in the performance of a company for reasons other
than just stock appreciation.
c) Classify stakeholders into internal and external and show how they relate to
the business (Primark).
All businesses depend on a variety of stakeholders. Some stakeholders are
internal to the business, such as a company’s employees. Other stakeholders
are external to the business, such as suppliers, customers, trade unions, civil
society groups, shareholders and the communities in which the business
operates.
Task 2:
1
, a) Explain how conflicts of interest can occur between the various stakeholders
of Primark;
Shareholders vs. Environmentalist
Managers vs. Employees
Customers vs. Suppliers
Government Agencies vs. Organisations
•Shareholders vs. Environmentalist
The conflict between these two parties is over how Primark attempt to cut
environmental issues they may have, for instance an environmentalist will need
Primark to profit the environmental by utilizing more secure materials to make
their clothes. However shareholders might not have any desire to do this due to
the price of secure materials that costs a significant sum, more than standard
materials. Therefore, these two parties will have an irreconcilable situation.
•Managers vs. Employees
When it comes to the two stakeholders of manager and employees the conflict
varies. One primary issue is that managers for the most part look for high
benefits for their business (like Primark) this might be hesitant to see the
business pay high wages to staff and may simply stick to the lowest wages or
just above. One affect for the business with this issue is that the business may
pick up a contrary view with the general population and media despite the fact
that they are expanding benefits yet individuals might not have any desire to
work for them due to the unethical wages, with this negative media squeeze
they may lose staff and clients.
•Customers vs. Suppliers
With regards to these two partners customers need great quality items and
administrations that are good value for money. However suppliers will most likely
be unable to deliver the best quality items each time or may even create less
expensive low quality items. With regards to a business customers are the most
important resource of the business, so if they quit buying the items then the
business will begin to decay and make less deals meaning they won't hit their
objective benefit confine. Additionally for the business this implies they may
need to change suppliers to a superior quality more dependable source which
implies they will spend more cash.
2
