Question

Identify the possible stakeholders you would want to involve in a major capital expenditure and explain why each of them are important.

Answer 1

The possible stakeholders for involvement are:

1. Employees - Employees will be the one who will implement the project. So their involvement is a given for better understanding on how to implement the project

2. Suppliers - The supplier will have to provide the raw materials for the new project and hence their involvement in the capital expenditure process is important

3. Shareholders - The shareholders will want their values to be enhanced in future and hence they business has to have the shareholders approval for the capital expenditure

4. Creditors - The creditors should be apprised of the new capital expenditure and would they be involved on new debt or would the credit rating of the already issued debt will have any bearing because of the capital expenditure

5. Government - Finally, since is a big capital expenditure, the government could be involved and explained the benefits in return for possible tax rate cut for the business.