Analyse why a business needs to be accountable to its stakeholders.

Mark scheme

Marking points from the official mark scheme (May/June 2017). The mark or mark type is shown in brackets.

1. [1] (Definition of stakeholders) people, groups of people who have an interest in, or are affected by, what a business does and stakeholder theory.
2. [1] (Accountability to customers) quality/safe products – competitive pricing – ethical selling practices - demanded.
3. [1] (Accountability to employees) job security, safe working practices, training, minimum wages - demanded.
4. [1] (Accountability to suppliers) prompt, regular payments – fair treatment - demanded.
5. [1] (Accountability to local community) environmental consideration, secure jobs – demanded.
6. [1] (Accountability to government) pay taxes, observe laws, publish accounts – required.
7. [1] (Accountability to Shareholders) if a plc, shareholders will have concern for dividend levels and share price.
8. [1] Analysis of examples of different kinds of accountability to stakeholders and application of stakeholder theory.
9. [1] Identification of different stakeholders for a fast food retailer (e.g. owners, employees, local communities, customers, governments, shareholders).
10. [1] Reference to business decisions leading to conflict (e.g. new products, pricing policy, pay/remuneration, conditions of service, opening/closing hours, product ingredients, advertising/marketing policies).
11. [1] Conflict between employees and owners over working conditions or pay.
12. [1] Conflict from customers regarding price increases or 'health' issues related to fast food products.
13. [1] Conflict with governments over 'health' issues relating to fast food products or compliance.
14. [1] Local communities may conflict over noise, traffic, waste management, or ethical sourcing.
15. [1] Shareholders may prioritize short-term profits, potentially conflicting with long-term investments desired by management or ethical practices demanded by other groups.
16. [1] Evaluation considering the importance and potential impact of conflict on the business.
17. [1] Assessment of how some stakeholders may be more important than others, varying over time or by decision, and the need to prioritise interests.