Question

What are the major stakeholder groups that influence and are influenced by small companies? What are the 44 primary interests of each of these groups? How can a small business owner manage potential conflicts between the demands of these groups? 30 List the six most important trends of the general environment. Give examples of a way in which each trend might affect your small business idea. 17 What are the possible reasons for buying an existing company as opposed to starting a new business from scratch?

Answer 1

1. There are many stakeholders groups which influence the small companies.The success of a business depends upon the activities of the stakeholders. If stakeholders functions properly, it will bring sucThecess and good name to the company. In a small business, the important stakeholders are the owners, staffs, customers, government etc. The major interest of the customer is to supply the product and services. Through the purchase of the customers, they are showing their interest on the business and they are supporting the business. Like that customers will also share their experience and quality of the product to the owner of the small business. It will help the owners to correct the mistakes and will understand what actually customers needed.

The role of employees is also very important in a small company. It is through the skill and effort of the employees make success to abusiness. Companies will give training to the employees for improving their skills. It will help the company to grow. The success of the company also depends upon the cooperation of employees in the company. There should maintain a friendly atmosphere for the employees for doing their work efficiently. The interest on supplier also very important in a company. They will provide raw materials which is required for the production of the goods of the company. If supplier provide good raw materials it will help the company to make quality products. Goverment and community also plays as a stakeholder of the company. Government will collect taxes from the company. A business will provide employment to many people and also give financial helps to schools and other organizations.

The owner of the business wants the ability to manage the conflicts between these stakeholders group. The owner can make definite laws and orders for controlling the activities of the stakeholders. The rights and duties of the stakeholders can also be make by the owner. Through proper cooperataion and mutual understanding the company can avoid conflicts between the stakeholders.

2. The six most important trends of the general environment are political, economic, social, technological, environmental and legal. The political factor is giving importance to the role of government in shaping the business. It includes tax policies, changes in trade restrictions and tariffs etc. The political factor will affect the business in many way. For eg. if the tax rate is increased by the government, small companies want to pay more money as tax. It will reduce the income of the company.

The economic factors deals with the economic condition in a company. It includes interest rates, unemployment rates, gross domestic product, growth and decline of the economy etc.. These factors will affect the business of the company. For eg. If the unemployment rate in the economy is high, people will not have enough money in their hands. They will reduce the purchase of goods from the market. It will reduce the income of the companies.

The social factor includes population, age, sex, culture, taste etc. For eg.in the earlier period only men got the opportunity to work in companies. But when the social condition of the world changes women also got the right to work in companies. It created many opportunities in companies. Because they got more employees for doing the works.

The technological factors give importance in the improvements in products and services of the company.. In the modern world new technologies were implemented. It increased the profit of the companies. For eg. when computer was started to use in a company, the work of the employees become somemore efficient and speed. It will save the time of the employees.

The environmental factors includes the physical conditions within which organizations operates. It contains factors such as natural disasters, pollution levels and weather conditions. It will affect the functioning of the company. For eg. if natural disaster occur in a place, it is very difficult to function the company activities properly. Some time the company want to shut down for certain period.

The legal factors centres on how the court and laws influence the business activities. They includes employment laws, health and safety regulations, discrimination laws etc. For eg. through employment laws, the company want to do certain things for the benafit of the employees. company want to increase the wage rate of the employees. It will reduce the income of the company.

3. There are many reasons for buying an existing company as opposed to start a new business from scratch. They are: a) Easier to secure finance - If a company is able to earn income, it is easy for kenders to provide finacial helps. Because the company was already proved that they can make profit.

b) Instant customer access - If we are buying already existing company, it will have customers. So it is easy for new owners to get customers. Because they are altrady existing.

c) Established network of contacts - for starting a business it fequired somany contacts with others. Good suppliers and marketing contacts will help the company to earn more income.

d) Trained employees - If we buy an existing company, there is already employyes there. They must be efficient and skilled. This can help the company toimplement strategies for the growth of the company.

e) Less work - If we are buying an existing company, the work is verylow. That means there is no need of arranging and organising the activities of the company. Because it is already existing. They is also experienced employees in the company.

f) Less risk - It is very risky to start a new business. Because it needed so much finance. If we are buying an existing firm, it is easy to get financial aids.

g) Income from day one - If we are buying already existing business, the owner will get income from the first day onwards. Because all the activities of the company is continuing and the necessary equipments and other things which is needed for a company is already existing. So there is no need to spend momey for buying these things.