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People in Business. Unit 1. Objectives of this section. What is Business? Who are the People in Business? Interest Groups in Ireland Stakeholders Relationships in Business: Co-operative and Competitive. 1. Entrepreneurs. A person who sets up a business is an entrepreneur. 2. Investors.
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People in Business Unit 1
Objectives of this section • What is Business? • Who are the People in Business? • Interest Groups in Ireland • Stakeholders • Relationships in Business: Co-operative and Competitive.
1. Entrepreneurs • A person who sets up a business is an entrepreneur
2. Investors • Investors give financial support to entrepreneurs. They take the financial risk. • Invest big, make big • Invest big, lose big
3. Consumers • Consumers purchase goods and services which are provided by entrepreneurs.
4. Producers/Suppliers • Producers manufacture goods for the market and supply them to the consumer
5. Employers • Employers hire people to work for payment • Employers have rights and responsibilities
6. Employee • Employees work for their employers and carry out the tasks given to them in return for wages.
7. Service Provider • This is a firm or individual who provides a service to others for use in their business or personal life. • Banks, insurance companies • Communications • Marketing • Transport
8. Interest Group • An interest group is an organisation that acts as a representative body for a group of people with a common interest.
People in Business • What is a stakeholder? • Any individual or group, that has a stake in the business. • Who do you consider a stakeholder in a business? • What is the difference between a shareholder and a stakeholder?
Case Study • Jack Welch – ex-CEO of GE (General Electric) writes an opinion piece on ‘whose company is it?’ • Read the following document, and highlight five key points that ‘Neutron Jack’ makes.
Case Study • Read the two documents and write a 300 word opinion piece with the following heading • “who is a company for – not legally speaking, but philosophically? Some people say it belongs to the shareholders, others to its employees. Still others say a company exists for its customers’ sake. What do you think?” - Tomohiro Horibe, Saitama, Japan
Relationship between Stakeholders The relationship between stakeholders in a business may be described as being either co-operative or competitive. • Co-operative: • Here, a harmonious relationship exists between the stakeholders because they are in agreement with each other. • Competitive: • Here, a difficult relationship develops between the stakeholders because they are in disagreement with each other • Dynamic, and Dependant
Relationship between Stakeholders • Investor and Entrepreneur • Co-operative Relationship: • Can rely on each other: This is when the entrepreneur relies on the funds of the investor to start or expand his business and when the investor relies on the entrepreneur to provide a good investment. • Good return: This is when the investor is puts the investors funds to good use and the investor is happy with the return he is receiving on his investment
Relationship between Stakeholders • Investor and Entrepreneur • Competitive Relationship: • Problem with Return: This is when the investor is unhappy with the return he is receiving and threatens to withdraw his funds. • Problem with Restrictions: This is when the investor imposes restrictions on how the entrepreneur can use the funds. • Problem with Information: This is when the investor looks for more information about the business than the entrepreneur wishes to disclose.
Relationship between Stakeholders • Entrepreneur and Supplier • Co-operative Relationship: • Can rely on each other: This is when the entrepreneur relies on the supplier to provide goods or materials, on time and at a reasonable price, while the supplier relies on the entrepreneur to provide a market for his products.
Relationship between Stakeholders • Entrepreneur and Supplier • Competitive Relationship: • Problems with prices: This is when the entrepreneur tries to get goods at the lowest price and best terms, while the supplier will try to maximise prices and terms in his favour. • Problem with delivery: This is when delivery deadlines are missed. • Problem with payment: This is when the supplier does not get paid on time. • Problem with quality: This is when the entrepreneur is unhappy with the quality of the materials received from the supplier.
