Skip to content

ACCA Applied Knowledge · Business and Technology · Stakeholders in business organisations

Karta plc's board proposes to cut costs by closing a factory and moving production overseas. Shareholders expect higher profits, while the local council and workers strongly oppose the move. Which description best fits the relationship between these stakeholder groups?

This is a conflict of stakeholder interests. Shareholders want higher profits, whereas workers and the council want jobs and local activity protected. Management must balance these competing claims, considering each group's power and interest, rather than assuming shareholders automatically prevail.

  1. AA conflict of stakeholder interests, which management must weigh when decidingCorrect
  2. BNo conflict, because shareholders own the company and their view always prevails
  3. CA conflict that can be ignored because workers are internal stakeholders
  4. DA shared objective, since all groups benefit from lower costs

Explanation

Shareholders seek profit growth while workers and the council want to preserve jobs and local economic activity, so their interests conflict. Management has to balance competing claims, taking into account each group's power and interest. It is incorrect to say shareholders' view always prevails.

Did you get it right without looking?

One question tells you little. A timed set on Stakeholders in business organisations shows your real accuracy, how long you take and where you lose marks.

Practise Stakeholders in business organisationsFree diagnostic mock

More Stakeholders in business organisations questions