IGCSE, A Level Business Student Forum

Nellis is a public limited company. It specialises in building large luxury houses. Over the past 3 years its profits have increased as the country is experiencing an economic boom. ‘It’s not all good news – the Government has announced plans to increase interest rates and introduce new legal controls to protect the environment’ said the Managing Director. He believes these new legal controls to protect the environment will only make businesses (such as Nellis) less profitable.

05 Identify two stakeholder groups. Explain why each group is important to this business. [6]

Possible KN Points:
• Owner/Shareholders
• Employees OR Managers
• Customers
• Banks/lenders
• Government
• Local community
• Pressure groups

KN : Shareholders invest to get good returns
APP : Nellis is a public limited company and profits have been increased over the past 3 years and the business builds luxury houses which can generate good profits
AN : Good performance leads to receiving dividends and good performance can increase the shares value which keeps the shareholders satisfied and helps Nellis have good relations with shareholders

KN : The government is responsible for setting laws
APP : The government plans to increase interest rates and they will introduce new legal controls to help the environment because Nellis business can affect the environment.
AN : Nellis will have to pay higher interest rates on loans and the environmental laws might increase the costs of the materials, however nellis will be running the business legally and while avoiding any fines building a good brand image.