Business – 1.5 Stakeholders – Relative importance and influence | e-Consult
1.5 Stakeholders – Relative importance and influence (1 questions)
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Model Answer:
The relocation will affect stakeholders in different ways:
- Employees (primary): Job losses or redeployment for domestic staff; possible morale issues. Reaction: protests, strikes, or demands for severance packages.
- Shareholders (primary): Potential increase in profit margins due to lower production costs. Reaction: generally supportive, may demand further cost‑cutting measures.
- Customers (primary): Possible changes in product price, quality, or delivery times. Reaction: may welcome lower prices but could be concerned about quality or ethical sourcing.
- Suppliers (secondary): Domestic suppliers may lose contracts, while overseas suppliers gain business. Reaction: renegotiation of terms, search for new markets.
- Local community (secondary): Loss of jobs and reduced economic activity. Reaction: negative media coverage, pressure on local politicians, possible boycotts.
- Government (secondary): Loss of tax revenue and employment rates; potential incentives for foreign investment. Reaction: may impose tariffs or offer relocation incentives.
Overall, the business must manage communication and mitigation strategies (e.g., retraining programmes, CSR initiatives) to soften adverse reactions.