BUS101: Introduction to Business
Study guide and Definitions
Unit 1: The Context of Business
1.1 Business Basics
Section 5: Profit and Stakeholders
A stakeholder is any group or individual who can affect or who is affected by
achievement of a group's objectives.
Learning Objectives
● Understand the responsibilities of stakeholders
● Compare and contrast stakeholders and shareholders
Key Points
● The stockholders are the owners of the company, and the firm has a binding
fiduciary duty to put their needs first to increase value for them.
● Stakeholder theory argues that there are other parties involved, including
governmental bodies, political groups, trade associations, trade unions,
communities, associated corporations, prospective employees, prospective
customers, and the public at large.
● In some scenarios, even competitors are included as stakeholders.
● Stakeholders believe that an organization should strive to achieve satisfaction
among all parties involved, as opposed to solely pursuing the highest profit.
● In some scenarios, even competitors are included as stakeholders.
Terms
● Fiduciary Duty
- A legal or ethical relationship of confidence or trust between two or more parties.
Typically, a fiduciary prudently takes care of money for another person.
● Stockholder
- One who owns stock.
● Stakeholder
- A person or organization with a legitimate interest in a given situation, action, or
enterprise.
Examples
● In the case of a professional landlord undertaking the refurbishment of some rented
housing that is occupied while the work is being carried out, key stakeholders would
be the residents, neighbors (for whom the work is a nuisance), and the tenancy
management team and housing maintenance team employed by the landlord. Other
stakeholders would be funders and the design and construction teams.
Study guide and Definitions
Unit 1: The Context of Business
1.1 Business Basics
Section 5: Profit and Stakeholders
A stakeholder is any group or individual who can affect or who is affected by
achievement of a group's objectives.
Learning Objectives
● Understand the responsibilities of stakeholders
● Compare and contrast stakeholders and shareholders
Key Points
● The stockholders are the owners of the company, and the firm has a binding
fiduciary duty to put their needs first to increase value for them.
● Stakeholder theory argues that there are other parties involved, including
governmental bodies, political groups, trade associations, trade unions,
communities, associated corporations, prospective employees, prospective
customers, and the public at large.
● In some scenarios, even competitors are included as stakeholders.
● Stakeholders believe that an organization should strive to achieve satisfaction
among all parties involved, as opposed to solely pursuing the highest profit.
● In some scenarios, even competitors are included as stakeholders.
Terms
● Fiduciary Duty
- A legal or ethical relationship of confidence or trust between two or more parties.
Typically, a fiduciary prudently takes care of money for another person.
● Stockholder
- One who owns stock.
● Stakeholder
- A person or organization with a legitimate interest in a given situation, action, or
enterprise.
Examples
● In the case of a professional landlord undertaking the refurbishment of some rented
housing that is occupied while the work is being carried out, key stakeholders would
be the residents, neighbors (for whom the work is a nuisance), and the tenancy
management team and housing maintenance team employed by the landlord. Other
stakeholders would be funders and the design and construction teams.
