Question

Essay Question

The essay question is based on the following:  Roman and Gale are partners in business called Food Distributors which has its offices in Fullerton.  Roman works much more than Gale (who is also an accounting professor at CSUF) plus Roman’s initial contribution to the business was greater.  Therefore, the profits are split 75/25 in favor of Roman.  The business distributes snack foods to retail stores such as Target, Walmart and K-Mart in Orange, Los Angeles and Riverside Counties.  The business regularly contributes money to food banks which help the homeless and other food-insecure people in the area.  The business has a program in which CSUF students can work as unpaid externs (they can earn up to six units toward their degrees) and, in fact, the business employs several former externs on a full-time (paid) basis.  The business also has externs and employees from other universities.  The business offered medical insurance to all of its employees for a small fee.  Most of the full-time employees had been with the business for at least five years while part-time employees were usually seasonal only.  The City of Fullerton, while recognized the contributions of the business to the area, performed regular maintenance of the streets and other public facilities near the offices of the business.  The City of Fullerton also had its police department do regular patrols around the offices of the business (a service not ordinarily extended to private businesses).  The business had an informal policy of hiring people who lived close to its offices.  The business was very involved in the Democratic Party of Orange County (Roman had served on its board in the past).  Roman and Gale attend the same mosque and the business contributed money to the renovation of the mosque’s parking lot.

(a) Identify whether the following are primary or secondary stakeholders in the company (one word for each stakeholder):

(i) Food banks which help the homeless and other food-insecure people in the area.

(ii) Gozip.

(iii) The part-time employees.

(iv) The City of Fullerton.

(v) Retail stores such as Target, Walmart and K-Mart in Orange, Los Angeles and Riverside Counties.

(b) Discuss why those five stakeholders are primary or secondary stakeholders (1-2 sentences for each stakeholder).

Answer 1

Stakeholders of a company are the people who care most about the company's behavior and financial performance. The term is not synonymous with shareholder, though a shareholder is a stakeholder. Stakeholders typically are broken into two parts — primary and secondary.

A)

(i) Food banks which help the homeless and other food-insecure people in the area.

Ans These are Secondary Stakeholders - As it provide benefits to society

(ii) Gozip.

Ans Secondary Stakeholders

(iii) The part-time employees.

Ans These are Primary Stakeholders - As they are directly linked with the work.

(iv) The City of Fullerton.

Ans Secondary stakeholders - As their work indirectly impact business, But specifically.

(v) Retail stores such as Target, Walmart and K-Mart in Orange, Los Angeles and Riverside Counties.

Ans Primary stakeholders - As they are the retailers who directly linked with the business and has a good impact on profit of the business.

B)

A stakeholder is a party that has an interest in a company and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees, customers, and suppliers.

Secondary stakeholders are usually external stakeholders, although they do not engage in direct economic exchange with the business – are affected by or can affect its actions (for example the general public, communities, activist groups, business support groups, and the media).

i) They are Secondary because they are external to organisation but give benefit to society on the behalf of business which ultimately impact performance of the business.

ii) Gozip - pending doesnt have any knowledge

iii) Part time employees - primary as their internal to the business and theie performance will directly impact the profitability of the business.

iv) City of Fulleton - Secondary becausre Police giving benefits to them indirectly and they are not directly associated with the business

v) Retail Stores - Primary as these are customers for the business.