3.4.3 Shareholders versus stakeholders Quiz: Pearson Edexcel Business, Unit 3

The 20 questions

1. Which group consists entirely of internal stakeholders in a business?

   • Banks and government
   • Suppliers and customers
   • Managers and employees
   • Shareholders and lenders

2. Which group consists entirely of external stakeholders of a business?

   • Full-time employees
   • Executive board members
   • Customers and suppliers
   • Directors and managers

3. What is the primary focus of a shareholder-focused business model?

   • Maximising financial returns
   • Maximising community benefits
   • Reducing dividend payouts
   • Minimising sales revenue

4. What defines a stakeholder-focused approach to business decisions?

   • Minimising customer service
   • Ignoring employee welfare
   • Balancing all interests
   • Prioritising shareholders only

5. What is a common source of conflict between shareholder and stakeholder objectives?

   • Profit versus social aims
   • Growth versus expansion
   • Dividends versus equity
   • Revenue versus turnover

6. Which two stakeholder groups conflict when a firm cuts wages to boost dividends?

   • Customers and suppliers
   • Shareholders and employees
   • Government and community
   • Managers and lenders

7. A firm decides to invest in a community training scheme. Which approach does this reflect?

   • A short-term cost-cutting approach
   • A stakeholder approach
   • An asset-stripping strategy
   • A pure shareholder approach

8. A firm cuts its orders from a small supplier, which then struggles. What type of stakeholder is the supplier?

   • Internal stakeholder
   • Director
   • Shareholder
   • External stakeholder

9. Choosing between an immediate dividend payout and long-term expansion creates what conflict?

   • Ownership versus control
   • Ethics versus compliance
   • Internal versus external
   • Short-term versus long-term

10. What is a primary objective of employees as a key business stakeholder group?

    • Highest corporate tax
    • Maximum dividend yield
    • Fair pay and security
    • Lowest product prices

11. What is a primary objective of customers as a business stakeholder group?

    • High wage rates
    • Quality and value
    • High dividend payouts
    • Maximum capital growth

12. If a business made a profit of 1,000,000 pounds and paid 60% of it as dividends, how much was paid to shareholders?

    • 600,000 pounds
    • 1,600,000 pounds
    • 400,000 pounds
    • 60,000 pounds

13. What is a key risk of focusing exclusively on short-term shareholder returns?

    • Excessive employee loyalty
    • Excess capital reserves
    • Lower corporate taxes
    • Neglecting wider stakeholders

14. What main argument is typically used to justify prioritising shareholder returns over other interests?

    • Managers control daily tasks
    • Shareholders bear financial risk
    • Suppliers demand prompt cash
    • Employees work longer hours

15. Why is a stakeholder-focused management approach often difficult for a firm to implement fully?

    • Profits are always irrelevant
    • Stakeholder objectives conflict
    • Employees lack legal rights
    • All stakeholders share goals

16. Which tool helps a firm evaluate and manage conflicting stakeholder interests?

    • Ratio analysis
    • Variance analysis
    • Stakeholder mapping
    • Critical path analysis

17. Which primary responsibility does the government have as an external stakeholder in business?

    • Enforcing legal regulations
    • Paying staff dividends
    • Managing daily operations
    • Providing bank loans

18. What is a pressure group's most powerful tool against a large business strategy?

    • Buying minority shares
    • Damaging brand reputation
    • Direct legal enforcement
    • Setting corporate policy

19. What primary conflict arises when paying employees significantly above the legal minimum wage?

    • Dividends versus tax
    • Revenue versus turnover
    • Output versus capacity
    • Costs versus motivation

20. How can a firm satisfy wider stakeholders while still adequately rewarding shareholders?

    • Eliminate all shareholder returns
    • Halt all employee training
    • Balance dividends and reinvestment
    • Maximise short-term profit

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