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Business Management

Business in contemporary society

What are stakeholders?

Businesses have different types of internal and external stakeholders, with different interests and priorities. Sometimes these interests can conflict.

A stakeholder is anyone with an interest in a business. Stakeholders are individuals, groups or organisations that are affected by the activity of the business. They include:

  • Owners/shareholders who are interested in how much profit the business makes, and the dividend they will receive.
  • Managers who are concerned about their salary, promotion prospects and potential benefits they may receive long term.
  • Employees who want to earn high wages and keep their jobs.
  • Customers who want the business to produce quality products at reasonable prices.
  • Suppliers who want the business to continue to buy their products, which keeps them with a degree of security and honoured contracts and deals.
  • Banks who want to be repaid on time and in full, and with interest.
  • The community which has a stake in the business as employers of local people. Business activity also affects the local environment. For example, noisy night-time deliveries or a smelly factory would be unpopular with local residents.
  • Government who want firms to do well in order to be able to raise and collect taxes from them.

Internal stakeholders are groups within a business - eg owners and workers. External stakeholders are groups outside a business - eg the community.

A diagram showing the different interest groups attached to a business: owners, customers, workers, suppliers, managers, the community


It is important at Higher level you are able to

  • Identify stakeholders are they internal or external?
  • Explain the interest of stakeholders - why do they want the firm to do well?
  • Explain the influence of stakeholders - how can they change the firm's performance?


Deborah Meaden

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