Impact of Dam Construction: Stakeholders, Costs, and Benefits
Stakeholder Groups Impacted by Dam Construction
Stakeholder Group 1: Government of Country X
Stakeholder Group 2: Community
Stakeholder Group 3: Shareholders of Generation Elect
Impact on Shareholders of Generation Elect
Shareholders of Generation Elect: The construction of the dam would affect the shareholders of the business since they would want to know how much profit is expected from its operation to determine the potential dividends they will receive. At the same time, if the construction is accompanied by high profits, it would mean an increase in the value of the company, which equates to an increase in the value of their shares.
Impact on the Government of Country X
Government of Country X: As governments are in charge of the country’s economy, if the construction of the dam is successful, it would mean that the economy will employ many people, who will pay taxes and therefore, increase the country’s output. The government will also have to control the company’s activity and ensure it complies with all laws and regulations.
Impact on the Community
Community: The people living around the project would be highly affected by it, as many areas of agriculture and food supplies will be cut, meaning that imports of food will have to increase, which will be more expensive than their own. However, at the same time, the business would create more jobs for the people living nearby, which means higher living standards.
Public Limited Company vs. Government Ownership
Being a public limited company, Generation Elect has different objectives than if it were owned by the government. To start with, public limited companies’ main aim is to make profits, so they don’t care about the prices of their products but whether they are profitable. In contrast, government corporations’ main aim is to keep prices low so that every individual in society can afford the service, although it may require a great deal of money to do so. Besides, public limited companies also aim to grow and survive, mainly to be able to keep obtaining profits or increase the value of a business. However, other objectives that government corporations have, such as offering employment so unemployment does not rise and offering services in all areas of the country so that everyone has the possibility to access them, are not shared by public limited companies.
Social Costs and Benefits
Defining Social Cost and Social Benefit
A social cost is the sum of the private and external costs to society as a result of a business decision, while social benefit is the sum of the private and external benefits.
Identified Social Costs
- Cost 1: Destruction of agricultural areas
- Cost 2: Increased cost of imported food
Identified Social Benefits
- Benefit 1: Increased employment
- Benefit 2: Fewer power cuts
Advantages and Disadvantages of Dam Construction
Advantage: No power cuts, so businesses can keep producing their products; increased profits as output will no longer be lost through power cuts; economic growth in Country X as output will be higher; a depreciating exchange rate would be beneficial to exporters as their goods may now have lower prices abroad.
Disadvantage: May need to increase food imports, leading to a depreciating exchange rate; increased pressure on other areas as people move from land around the dam, and this may lead to rising house prices, overcrowding in schools, etc. Environmental damage to the area around where the dam is being built, as this is an area of natural beauty and a habitat for wildlife.
Recruitment Process
Job analysis/job description/job specification/job advertisement/job applications
Interviews/selection of best applicant/job offer
Vacancy filled
Importance of Skilled Construction Workers
It’s important for Generation Elect to recruit skilled construction workers since they will be able to build the dam properly, matching the quality required, so that the business will maintain its good reputation in the area and also to save time, as the skilled workers will be able to build the dam quickly and solve the electricity problem efficiently.
Impact of Trade Union Membership
The fact that all construction workers are members of a trade union may be an advantage to Generation Elect. It may be beneficial as it is easier for employers to negotiate with a trade union representative than with each individual worker, so discussions are clearer, a better working relationship should develop between the management and the union, it is easier to agree on changes to working conditions, less time is wasted in arguments, and last but not least, fewer industrial disputes are generated since better relationships are established between management and employees.