Page 64 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 1 Understanding business activity

TEST YOURSELF
1 What is meant by ‘objective’?
2 Explain why a business needs objectives.
3 Identify and explain three business objectives.
4 Identify the main objectives of a social enterprise.

The role of stakeholder groups

KEY TERM Stakeholders are any individual or group who may be affected by the decisions
and activities of a business. Figure 5.4 shows the main stakeholders of a business.
Stakeholder: an individual You are a stakeholder in all the businesses you buy goods and services from.
or group which has an interest
Members of your family are a stakeholder in the business they work for, or
in a business because they
are affected by its activities businesses they own.

and decisions. There are two types of stakeholder:
■ internal stakeholders
■ external stakeholders.

Internal stakeholders
Internal stakeholders have an interest in the decisions and activities of a business.

62
Internal Stakeholders
owners and shareholders,
managers, employees

Business
Stakeholders

External Stakeholders
lenders, suppliers,
customers, government,
local community

Figure 5.4 The main
stakeholders of a business

Owners and shareholders
Dividend: see Chapter 4, Owners and shareholders are interested in the performance of the business. Th ey
page 48. will want to know if it has earned a profi t. Profit belongs to the owners and is

their reward for risking their investment in the business. Shareholders are the

owners of a limited company and the higher the profits earned then the higher the

dividend they will receive. Also, the market value of shares is usually affected by the