Photo AI
Evaluate the two aims and recommend which is most suitable for a business, such as Unilever - Edexcel - A-Level Business - Question 2 - 2017 - Paper 2
Question 2
Evaluate the two aims and recommend which is most suitable for a business, such as Unilever. Extract H Unilever plc is a leading global producer of food, home and ... show full transcript
Worked Solution & Example Answer:Evaluate the two aims and recommend which is most suitable for a business, such as Unilever - Edexcel - A-Level Business - Question 2 - 2017 - Paper 2
Step 1
Stakeholder approach - arguments for
Answer
The stakeholder approach considers a business's responsibility to all its stakeholders, including customers, suppliers, and the community. Adopting this approach can enhance Unilever's image by reducing its environmental impact and improving its positive social influence, which may attract more customers who favor ethical practices. Furthermore, better relationships with suppliers achieved through fair pricing can strengthen the reliability of raw material supply, ensuring that production is smooth. By appealing to ethical investors, Unilever may also enhance its reputation and ensure long-term sustainability.
Step 2
Shareholder approach - arguments for
Answer
On the other hand, the shareholder approach emphasizes maximizing returns for investors, prioritizing profits above all else. Increased costs associated with stakeholder management could diminish dividends, leading to discontent among shareholders. Furthermore, a lack of focus on shareholder returns might create inefficiencies, where resources are diverted from core profitability strategies, ultimately harming the business's performance in the market.
Step 3
Potential recommendation
Answer
Ultimately, Unilever's long-term strategy should embrace the stakeholder approach while finding a balance with shareholder interests. By doing so, it can ensure ethical practices that enhance brand loyalty and customer trust, while simultaneously focusing on sustainable profits that satisfy shareholder expectations. This dual focus on stakeholders and shareholders will support the company's growth while advocating for responsible business practices.