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Finance & Accounting
Pages 10 (2510 words)
CASE 1 (a) Stakeholders include all those parties which hold a direct interest in Jill’s business and are affected by any and every action the organization takes. These parties include not only the customer, shareholders if any but also the suppliers, employees, government, investors which in this case is the bank and government.
This is because in case Jill’s operating costs rise and is not able to sell product at high price in the market bank will have default risk and will also face potential payment risks by Jill. Second stakeholders are the employees which might be fired from job because the company might not need them for the more automated system of production. Also, employees with older skills of production might be affected as they will no more be suitable for the job of new production process. Next stakeholders to be effected are customers who might face the issue of high prices in case of high product cost to Jill. Company’s first aim is to cover their costs and hence if Jill’s costs rise with the new equipment it might price the product at a slightly higher price which might not be acceptable to the customers. Lastly, competitors would be affected by this action. This is because competitors might lack the new mode of production and hence they might not be able to produce efficiently compared to Jill’s company. At the same time competitors might also gain as in case Jill raises price of the product, competitors can increase their sales by keeping low price of their product. Changing production technology is what is of more concern and convenience to the internal management of any company and customers have nothing to do with it. ...
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