Chapter 1.
Stakeholders in a Commercial
Organisation
Q1.Who is a Stakeholder?
Ans.
. Any individual, firm or organisation which has a stake in the organisation is
known as stakeholders.
. for eg. shareholders, employees, employer, creditor, supplier etc.
Q2.Distinguish between
(i) Stakeholders and Shareholders
Ans.
Basis Stakeholder Shareholder
term It is a wide term It is a narrow term
association It is associated with all forms It is associated with Joint Stock
of business. Company.
(ii) Stakeholders/Shareholders and Customers
Ans
Basis Stakeholder/Shareholders Customer
Risk They have high risk They have no risk
Profit They have a share in the They have no share in the
profits profits
Voting They have voting rights They do not have voting rights
Rights
investment They invest in the company They do not invest in the
company
financial They have a financial stake in They do not have a financial
stake the company stake in the company
(iii) Shareholders and Creditors
Ans
Basis Shareholders Creditors
Risk They have high risk They have low risk
Voting They have voting rights They do not have voting rights
rights
Type of They are internal They are external stakeholders
stakeholders stakeholders
Profit They get dividends on They get interest on loan given
sharing capital invested to the company
nature of They invest in the company They only provide loan to the
investors company
(iv) Distinguish between Internal stakeholders and External stakeholders
(2m)
Who are Internal and External stakeholders? (5m)
Write a short note on, Internal and External stakeholders. (5m)
Ans.
Basis Internal stakeholders External stakeholders
Position They operate from within They operate from outside the
the company company
Participate They actively participate in They do not actively participate
the management of the in the management of the
organisation organisation
Examples Employers, Employees Government, Creditors,
suppliers
(v) Creditors and Suppliers (2m/2&1/2m/5m)
Ans.
Basis Creditors Suppliers
Objective They provide loan to the They supply goods and services
organisation to the organisation
Expectation Regular payment of interest Regular orders for supply.
Payment Payment of loan on the Payment on time on goods
specified time period supplied
Q3. State the expectations of:
(i)owners:/ employers/ shareholders
Ans.
• safety of capital invested in the organisation
• appreciation in the capital invested in the organisation
• safe returns on the capital invested in the organisation
• equal participation in policy decisions
• good image that one can feel proud of
(ii)employees:
Ans
• fair remuneration in the form of wages and salaries.
• good and safe working conditions
• right of trade unions
• share in profit in form of bonus
• accurate information of the financial position of the organisation.
(iii) State the expectations of Creditors:
Ans.
• accurate information of the financial position of the organisation.
• safety of loan given by them to the organisation
• regular returns on loan provided
• payment of loan on the specific date
● Security in the form of mortgage of assets
(iv) State the expectations of suppliers:
Ans.
• regular orders for supply
• payment on time on goods supplied
• easy terms of delivery and payment
• accurate information of the financial position of the organisation.
• fair prices for the supplies
(v) State the expectations of Associates/ competitors
Ans.
• respect for intellectual property rights
• fair trade practices regarding price, quality
●An atmosphere of healthy competition and ethical behaviour
●Co-operation among competitors to ensure the growth of the entire industry
(vi) State the expectations of Government
Ans
• proper use of scare resources
• follow the laws and regulations
• payment of tax on time
• Avoid bribing officers
• Avoid monopoly of traders
(vii) State the expectations of society:
Ans
• To protect the environment from pollution
• help weaker sections by providing employment
• respect rights of women and children
• Donate to charitable institutions
• preserve cultural and social values
