i) Stakeholder Theory
The stakeholder theory suggests that an organization has the responsibility to maintain an equitable and working balance among the expectations of all interested groups who affect and are affected by the activities of an organization. The theory maintains that the objectives of an organization should be derived by balancing the conflicting claims of the various stakeholder groups.
(3 marks)

ii) Expectations of Identified Stakeholders:

• Shareholders:
  • Expect the maximization of their investments.
  • Expect prompt and regular payments of dividends.
  • Expect the continuous existence of the business to ensure the security of their investments.

  (2 points for 1 mark each)
  (2 marks)

• Employees:
  • Expect constant payment of salaries and other reward packages.
  • Expect the continuous existence of the business for job security.
  • Expect to be treated with respect and as human beings by the organization.

  (2 points for 1 mark each)
  (2 marks)

• Customers:
  • Expect the organization to provide high-quality products at affordable prices.
  • Expect rewards from the organization when it makes a lot of profit, such as reduced prices and promotions.
  • Expect the organization to provide safe products.

  (2 points for 1 mark each)
  (2 marks)

• Government:
  • Expects the organization to fulfill its tax obligations.
  • Expects the organization to abide by all laws regulating its operations.
  • Expects the organization to have open communications on issues of national interest.

  (2 points for 1 mark each)
  (2 marks)

• Suppliers:
  • Expect the organization to pay promptly for goods and services supplied.
  • Expect to obtain fair prices for supplies made to the organization.
  • Expect the organization to continue to exist and maintain business relations with them.

  (2 points for 1 mark each)
  (2 marks)

• The Community:
  • Expects the organization not to destroy the environment from where it takes its resources, such as avoiding pollution.
  • Expects the organization to provide support by investing in projects that benefit them.
  • Expects the organization to offer employment opportunities to its citizens.