COMMERCIAL STUDIES - X- ICSE Solutions CLASS-X for ICSE - Class X -COMMERCIAL STUDIES -STAKEHOLDERS SUMMARY & CASE BASE Q & ANS.

STAKEHOLDERS

 SUMMARY  & CASE BASE QUESTION ANSWER OF CHAPTER & MCQ 

1. Meaning of Stakeholders

   The word "stakeholder" comes from “stakes,” meaning interest or expected benefit. Stakeholders are individuals, groups, or institutions that have a stake in             the functioning of a business. They can affect or be affected by the business decisions and actions. Stakeholders include both individuals (like employees)             and institutions (like the government).

2. Distinction between Stakeholders and Shareholders

>Stakeholders: A broad term including all who have an interest in the organization.

> Shareholders: Only those who own shares in a company.

>Shareholders are one of the many types of stakeholders.

> Stakeholders may or may not have invested financially, while shareholders have a financial   investment.

>Shareholders participate in profit-sharing and management; stakeholders may or may not.                             

3. Distinction between Stakeholders and Customers

 >Customers: Buy goods and services from the company but don’t have a financial stake.

 >Stakeholders: Include people with financial or strategic involvement in the company.

 > Stakeholders supply capital or labour; customers do not.

 >Products are designed for customers, not stakeholders.

 >Customers do not share profits or participate in decision-making.

 4. Distinction between Shareholders and Creditors

>Shareholders: Internal stakeholders who invest in the company’s capital and bear risk.

>Creditors: External stakeholders who lend money and receive fixed interest.

>Shareholders share profits (dividends); Creditors receive only interest.

>Shareholders have voting rights; Creditors do not.

5. Internal and External Stakeholders

>Internal Stakeholders: Operate from within the organization.

>Includes: Owners, Employers, Employees

>They actively participate in the management and are directly affected by business performance.

>External Stakeholders: Operate from outside the organization.

>Includes: Suppliers, Creditors, Government, Society, Competitors, Customers

 >They indirectly influence or are influenced by the company’s actions and decisions.

CASE BASE QUESTION & ANSWER 

Case 1: The HR manager of XYZ Ltd. organizes a meeting to address the growing dissatisfaction among staff regarding promotion policies.

Q1: Which type of stakeholder is being considered here, and what is their expectation?

A1: Employees (internal stakeholders); they expect fair treatment, career growth, and job security.

 

Case 2: A shareholder raises concerns about falling dividends despite rising profits.

Q2: Is the shareholder an internal or external stakeholder? What is their expectation?

A2: An internal stakeholder; they expect returns on investment, dividends, and transparency in management.

 

Case 3: The Managing Director reviews cost-cutting measures to increase profit margins.

Q3: Identify the stakeholder role of the MD and their main expectation.

A3: The MD is an employer (internal stakeholder); expects business growth, efficiency, and profitability.

 

Case 4: A factory pollutes a nearby village river leading to local protests.

Q4: Which stakeholder is affected and what is their expectation?

A4: Society (external stakeholder); expects environmental responsibility and ethical practices.

 

Case 5: A bank delays further credit to a company due to delayed EMI payments.

Q5: Who is the stakeholder and what’s the logical consequence of unmet expectations?

A5: Creditor (external stakeholder); expects timely repayment; consequence = loss of trust and credit restrictions.

 

Case 6: The accounts team suggests shifting to GST-compliant software after government regulation updates.

Q6: Identify the external stakeholder influencing this decision and their expectation.

A6: Government; expects compliance with tax laws and accurate financial reporting.

 

Case 7: A supplier refuses to deliver raw materials due to repeated payment delays.

Q7: What stakeholder issue is involved here?

A7: Supplier (external stakeholder); expects on-time payments and continued orders.

 

Case 8: A company issues ESOPs (Employee Stock Ownership Plans) to boost motivation.

Q8: Which two stakeholder types are simultaneously addressed here?

A8: Employees and Shareholders (both internal stakeholders); employees feel ownership, shareholders get committed workforce.

 

Case 9: Local authorities cancel the license of a company due to pollution violations.

Q9: Which stakeholder expectation was violated and what does it reflect?

A9: Society & Government; reflects failure to meet social and legal responsibility.

 

Case 10: XYZ Ltd. lays off employees due to automation despite rising profits.

Q10: Is the action aligned with stakeholder expectations?

A10: No; employees expect job security and fair treatment; this may damage morale and company image

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