Mr. Mendelow

Good Evening

So, this scenario states:

20% shares held by institutional investors
20% by employees and pensioners of the company
30% by the family who founded the company
rest is public
– the board is majority family members who are very active in day to day management
– a trade union rep works for the company and sits on the local council
– factory area is surrounded by expensive houses with affluent residents
– these residents have complained to the local council for smells coming from the factory due to a new and profitable widget
– in the area of the factory, the co is a large business and there are very few other businesses in the area

Q: analyze the principal stakeholders within the context 15 marks

i wrote:

Family – high power/high interest
residents – low power/high interest
trade union rep – high power/high interest
institutional investors: hi power because they can disinvest if company gets a bad reputation due to negative publicity/high interest
local council – may get dragged into a power position if residents urge/hi interest

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the answer had:

trade union rep – hi power/hi interest
affluent residents – low power/hi interest
other residents
institutional investors – lo power/hi interest
customers – potential hi power/lo interest

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my question:

1. why is the family NOT a principal stakeholder?
2. why are institutional investors low power?
3. why is the local council not a principal stakeholder?
4. hi/lo interest: what is interest? is it the level of involvement? please explain.

thank u!!!