Business – 1.5 Stakeholders – Relative importance and influence | e-Consult
1.5 Stakeholders – Relative importance and influence (1 questions)
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Shareholders typically aim to maximise returns on their investment, while employees seek job security, fair wages and good working conditions. When these aims clash, conflict can arise.
- Example 1: Management proposes a cost‑cutting programme that includes redundancies to boost profit margins. Employees resist, fearing loss of income and morale.
- Example 2: Shareholders pressure for higher dividends, prompting the board to delay wage increases or bonuses for staff, leading to industrial action.
These conflicts can affect productivity, reputation and long‑term profitability if not managed effectively.