Simona Agoston

To define shareholders and stakeholders and differentiate between the two concepts To identify several groups of stakeholders and explain the relation between them and an organization To differentiate between a free-market system and a planned system To identify and comment the main external factors which may influence a companys activity

Shareholder = an individual or organization (including a corporation) that owns shares in a business (contributors to the companys capital) Stakeholders = anyone who has a direct or indirect interest in the business entity Shareholders/ stakeholders different objectives and interests

Public authorities State

Labor unions

Society

Sales agents

Suppliers

Managers and employees

Customers

Credit institutions

Competitors

Consultants

Other business partners

 Managers (top management, middle management, first line management) Employees

 Suppliers- entities which provide the necessary raw materials, equipment and services to a company

Customers- domestic or foreign companies or households which buy the companys products or use its services Today there is a strong customer orientation B2B (Business to Business), B2C (Business to Consumer)

 Competitors- organizations that target the same customers Direct competition- between products which perform the same function Indirect competition- between products which are close substitutes

Credit institutions- institutions (in general banks) which provide external capital to the company (to finance its current activity, to make investments etc.)

 Business consultants and other business partners- third parties which support/ assist the management of the company in order to reach its business goals Outsourcing of subsidiary activities Audit State- sets the legal framework for the activity of the company Public authorities - the institutions of the state with which the company communicates, such as Ministries, labor office, tax office etc.

 Business associations organizations which represent the interests of the company or professional groups (e.g. Trade associations, Chamber of Industry and Commerce etc.) Labor unions- organizations which represent employees interests and defend their rights Civil society- represented by NGOs, universities, research institutes, initiative groups etc.

 Identify the stakeholders of the chain store Carrefour in Romania and explain their interests related to the company.

Some basic underlying questions: How should limited economic resources be used to satisfy societys needs? What goods and services should be produced? Who should produce them? How should these goods and services be divided among the population?

Free market system/ Capitalism

Individuals own and operate the majority of businesses They are free to decide what/how to produce, to whom/ at what price to sell Philosophical origins of capitalism- Adam Smith, the market as a self-correcting mechanism: invisible hand

Mixed capitalism- limited intervention of the state in order to influence prices and wages or to change the way resources are allocated

Planned system

Governments control all or part of the allocation of resources Major goal= social equity, private enterprises and private gain is regarded as negative and exploitive

Communism

Allows individuals the least degree of economic freedom Almost all resources are under government control Resources allocation through rigid centralized planning Private ownership is restricted to personal and household items

Socialism

Between capitalism and communism High degree of government planning Partial government ownership of land and capital Government control over the vital industries In not vital industries private ownership is allowed High taxes Trend towards privatization Economic, political and social systems

Political factors Company

Economic factors

Social factors

Technological factors

Political stability How and to which extent the government intervenes in the economy Tax policy Environmental regulations Trade restrictions, tariffs Goods and services provided by the state Attitude towards foreign investors and foreign products

Economic growth Interest rate (cost of capital) Exchange rate Price stability/ inflation rate Unemployment rate Local economic trend

Demographic trend/ age distribution Social classes Education Religion National and individual values Cultural mobility

Ageing population in Europe

Country Germany France Italy Great Britain Romania EU-27
Source: Pelau, 2009

1990 21,7 20,8 21,6 24 27,7 21,4

2010 30,3 24,6 31,2 25,8 25,9

2030 49,2 39,1 48,3 38,7 40,6

The level of technological equipment The level of technology use The ability to adapt to technological changes Telecommunications Infrastructure