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ACCA Applied Knowledge · Business and Technology · The purpose and types of business organisation

A manufacturer plans to close a local plant to raise returns for shareholders. Employees and the local community oppose the closure. Which type of stakeholder conflict does this best illustrate?

This is a conflict between shareholders' desire for higher returns and the interests of employees and the local community, who lose jobs and local economic activity. The stakeholder groups have competing objectives, which management must weigh when deciding.

  1. AConflict between shareholders' wealth objectives and other stakeholders' interestsCorrect
  2. BConflict between short-term and long-term objectives of the same shareholder
  3. CConflict between two groups of suppliers

Explanation

The closure benefits shareholders financially while harming employees and the community, so different stakeholder groups want opposing outcomes. The question does not involve one shareholder's time horizons or supplier groups.

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