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

The directors of Marlow Co plan to close a factory and move production overseas. This will raise profit, but the local community will lose its main employer. Which stakeholder group's objective is MOST directly in conflict with the community's interest here?

Shareholders are the group whose objective most directly conflicts with the community's. The relocation increases profit and so serves shareholders' wish for returns, but it removes local jobs and harms the community that depends on the factory as its main employer.

  1. AShareholders, whose objective is to maximise returnsCorrect
  2. BCustomers, whose objective is to receive goods on time
  3. CLenders, whose objective is to be repaid

Explanation

The move is designed to raise profit, which serves shareholders' wish for higher returns. The community wants local jobs and economic stability, so these two directly oppose each other. Customers and lenders have no direct stake in where production is located, provided their own needs are met.

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