internal and external stakeholders 7

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Task 1Task 1 – Internal and External Stakeholders

Learning Objectives

Upon completion of this module, the student will be able to:

  • Discuss the function, goals and benefits of a business.
  • Explain the evolution of business to present day.
  • Differentiate between two social responsibility perspectives: the Shareholder Approach and the Stakeholder Approach.

According to economist Milton Friedman, the main purpose of a business is to maximize profits for its owners, and in the case of a publicly-traded company, the stockholders are its owners. Others contend that a business’s principal purpose is to serve the interests of a larger group of stakeholders, including employees, customers, and even society as a whole. Philosophers often assert that businesses should abide by some legal and social regulations. Anu Aga, ex-chairperson of Thermax Limited, once said, “We survive by breathing but we can’t say we live to breathe. Likewise, making money is very important for a business to survive, but money alone cannot be the reason for business to exist.” Boundless Business (2018).

COURSE MATERIALS:

Please read the following section contained in the online textbook Boundless Business:

  • Introduction to Busines

Please watch the video entitled: “Social Responsibility Perspectives: The Shareholder and Stakeholder Approach”: https://youtu.be/vD9XJKZmXEs

ASSIGNMENT:

Please read the following fact pattern and respond to the following:

Joseph is the sole owner of a local company named ‘Fruity Cups’ that is based in Virginia Beach, Virginia. ‘Fruity Cups’ manufacturers fruit cups that are sold at grocery stores primarily in the State of Virginia. The fruit cups are extremely popular with children throughout the state. Parents often include them in their daily school lunches. ‘Fruity Cups’ employees twenty people full-time. All twenty have been working for ‘Fruity Cups’ since the beginning in 2000. Joseph has become extremely rich from this business. A large, nationwide company has made a substantial offer to purchase ‘Fruity Cups’ from Joseph. Following the purchase, Joseph would no longer be involved in the operation of ‘Fruity Cups’.

1) What is an internal stakeholder?

  • Select one internal stakeholder from the fact pattern. If Joseph decides to sell Fruity Cups, what would be the potential impact on this internal stakeholder?

2) What is an external stakeholder?

  • Select one external stakeholder from the fact pattern. If Joseph decides to sell Fruity Cups, what would be the potential impact on this external stakeholder?

3) To what extent should Joseph consider the company’s stakeholders when making the decision regarding the sale of the business?

4) If Joseph decides to sell, what might he do to lessen the effects of the sale on both internal and external stakeholders?

Requirements:

  • Minimum Page Length – 2 full pages (excluding title/header and reference list); 12-point Times New Roman; double spaced; and page numbering.
  • Please be sure to answer the entire question to receive maximum credit for this task.
  • Use and include information from the weekly course content and outside sources to support the conclusions contained in the paper.
  • Be cognizant of spelling, punctuation, and grammar.
  • All sources should be cited in proper APA format (in-text citations and a reference list).
 
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