Discuss the differences and similarities between organisational customers and organisational stakeholders

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Unit 5: Understanding Stakeholder Expectations 

Unit code: H/503/8243
QCF level 4: BTEC Professional
Credit value:             
Guided learning hours: 

Unit aim
The aim of the unit is to give learners an understanding of business stakeholder expectations and the methods used to develop and improve business offerings to stakeholders.

Unit introduction
This unit will help learners understand that stakeholders are individuals or organisations that shape the operation of a business and/or are affected by the actions of the business. For example, if a retail chain decides to open a new store in a town centre location then the business itself, local government, construction companies, financiers, transport operators, customers and environmental groups are some of the stakeholders who have an interest in the development.

Primary stakeholders are those who are directly involved with the economic transactions of the business such as suppliers, employees and customers. Secondary stakeholders are not directly involved with the economic transactions of the business but have an indirect link to the business and its decisions. These stakeholders would include the general public, community groups and the news media.

Learners will understand that the interests of stakeholders may overlap. The retail store’s shareholders want to see growth and trade unions support the creation of new employment opportunities. However, the interests of stakeholders may also conflict. A new store may cause traffic congestion and retailers in other locations will see trade drawn away by any new retail development. Businesses will want to manage and reconcile the interests and expectations of different stakeholders. For example, a developer may be given permission to build new homes on condition of also building a new school and a leisure complex. Improving offerings to stakeholders and satisfying their varying interests as far as possible will ultimately support the achievement of business objectives.

Learning outcomes and assessment criteria
In order to pass this unit, the evidence that the learner presents for assessment needs to demonstrate that they can meet all the learning outcomes for the unit. The assessment criteria determine the standard required to achieve the unit.

On completion of this unit a learner should:

Learning outcomes

Assessment criteria

1. Understand organisational stakeholders

1.1 Discuss the differences and similarities between organisational customers and organisational stakeholders

1.2 Describe the features that differentiate primary and secondary organisational stakeholders

2. Understand primary and secondary stakeholder expectations

2.1 Compare the differences and similarities between expectations of primary and secondary organisational stakeholders
2.2 Evaluate methods of measuring achievement of primary and secondary organisational stakeholder expectations

3. Understand methods to develop and improve offerings to organisational stakeholders

3.1 Analyse current offerings to organisational stakeholders
3.2 Propose an improved offering to organisational stakeholders
3.3 Evaluate the impact of improved offerings to organisational stakeholders

Unit content

1. Understand organisational stakeholders
Stakeholders: owners, e.g. proprietors, partners, shareholders; government (international, national, regional, local); employees; customers (internal, external); suppliers; community organisations; pressure groups, e.g.

Confederation of British Industry (CBI), Friends of the Earth, Consumers’ Association; trades unions; investors, e.g. banks, venture capital providers, debenture holders; importance of stakeholders; primary stakeholders (persons/organisations directly involved with the economic transactions of businesses); secondary stakeholders (persons/organisations indirectly involved with the transactions of the business but can either shape or be affected by the business and its decisions); key stakeholders; (persons/organisations with significant influence on a business); roles; responsibilities; interests; concerns

2. Understand primary and secondary stakeholder expectations
Stakeholder expectations: shared purpose; environment of trust; mutual respect; primary stakeholders; owners; owner interests, e.g. profits, growth, liquidity, stability, return on investment; government; government interests, e.g. taxation, legal and regulatory compliance (Companies Acts, employment practices, health and safety), creating employment; employees; employee interests, e.g. remuneration, job security, career prospects, respectful treatment; customers; customer interests, e.g. value, quality, range of products/services, customer care, ethical behaviour; suppliers; supplier interests, e.g. credit scores, continuing/new contracts, equitable business opportunities, liquidity; secondary stakeholders; community organisations; pressure groups; interests, e.g. jobs, local involvement, environmental protection, ethical behaviour, charitable donations, truthful communication; trades unions; trades union interests, e.g. employee protection, jobs, conditions of employment, remuneration; investors; investor interests, e.g. financial stability, liquidity

3. Understand methods to develop and improve offerings to organisational stakeholders
Stakeholder engagement: move from a transaction basis for business towards relationship basis for business; interdependence of stakeholders; recognition of needs of stakeholders; recognition of interests and motivations of stakeholders; developing capacity for stakeholder engagement (capabilities, conditions, processes), e.g. construction organisations signing up to the Considerate Constructors Scheme, train operating companies’ Passenger Charters, J Sainsbury’s Corporate Social Responsibility Reports

Stakeholder engagement offerings: internally, e.g. teambuilding, consensus building, fair and transparent employment practices; externally; cooperation among allies, e.g. trade associations such as the British Beer and Pub  Association; winning stakeholder friendship, e.g. customer loyalty scheme and loyalty rewards; inclusivity, e.g. involving suppliers and customers in product packaging (Courtauld Commitment); respect for alternative viewpoints such as allowing employees to wear religious symbols; collaborative working, e.g. partnerships with education; funding research, e.g. renewable energy, genetically modified foods; sponsorship, e.g. sporting events, entertainment events; promoting responsible and ethical behaviour, e.g. promoting sustainable practices amongst all stakeholders; benefits, e.g. increased profits, increased productivity; sustainability; reputational enhancement.

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