Stakeholder Considerations (OCR GCSE Business)

Stakeholder Influences on Business

• There are several ways stakeholders can put pressure on businesses to behave in a particular way

Stakeholder influences

Consumer pressure

• Consumers can influence businesses by making choices about what they buy

  • Consumers may boycott a company's products or services due to unethical business practices

    • This affects a business's revenue and may force them to change their behaviour

Investor pressure

• Shareholders can use their ownership stake to push for changes in company policies and practices

  • They can vote against management proposals or sell their shares in companies that fail to meet their standards

Regulatory pressure

• Governments can introduce laws and regulations that require businesses to operate in a particular way and impose penalties for non-compliance

  • This can force companies to change their behaviour to avoid fines, legal consequences or the loss of operating licenses

Public pressure and activism

• Non-profit organisations, such as pressure groups, and individual activists can launch public awareness campaigns, protests, or boycotts

  • These activities draw attention to unethical or harmful business practices, which can damage a business's reputation and create pressure for change

Employee pressure

• Employees can voice their concerns internally, join or form trade unions, or engage in collective action

  • They may demand improvements in workplace conditions, pay or issues such as poor environmental practices

Industry pressure

• Companies within the same industry can establish voluntary codes of conduct or best practices

  • These pressure businesses to adopt similar policies to those of competitors or risk lagging behind

Legal action

• Stakeholders can take legal action against companies for unethical, illegal, or harmful business practices

  • If successful, these can result in costly legal settlements or fines

Business Impacts on Stakeholders

• Similarly, businesses can affect stakeholders, positively or negatively, in a number of ways

Business Impacts on Stakeholders