Key Business Stakeholders (AQA GCSE Business)
Revision Note
An Introduction to Stakeholders
Stakeholders are individuals or groups that affect or are affected by the actions of a business
When business owners and senior managers set business objectives, they are influenced by the expectations of stakeholders
Diagram: Business Stakeholders
Stakeholders are individuals or groups with an interest in the activities of a business
Internal Stakeholders
Internal stakeholders are individuals or groups within a business that often have a strong influence on business objectives and decisions
Internal stakeholders have a range of expectations and objectives, which can sometimes conflict
Business owners' objectives to maximise profit may conflict with workers' objectives to earn higher wages
E.g. In 2020, British Airways faced protests and legal challenges from its employees and trade unions after announcing plans to cut 12,000 jobs and reduce pay for remaining staff due to the impact of the COVID-19 pandemic on airline industry profits
Where conflict occurs, internal stakeholders may take a range of steps to increase their chances of achieving their objectives
Employees or their representatives may engage in negotiations with managers to improve their pay and conditions
Shareholders can vote on key business decisions at the annual general meeting
Employees can take direct action, such as going on strike, when negotiation has not been effective in achieving their aims
Objectives of Internal Stakeholders
Stakeholder | Objectives |
---|---|
Owners |
|
Employees |
|
Managers |
|
External Stakeholders
External stakeholders are individuals or groups outside a business that have some influence on business objectives and decisions
When external stakeholders are in conflict with a business, they may choose to take a range of steps to increase their chances of achieving their objectives
Suppliers can refuse to supply further goods to a business
Customers can boycott businesses or their brands
Local councils can refuse to grant planning permission for business developments
Pressure groups or the local community can stage protests or spread viral
campaigns targeting a business
E.g. In 2019, plans to build a new high-speed rail line, HS2, faced protests from pressure groups and residents of areas affected by the proposed route, who argued that the project would damage the environment, disrupt communities, and be too expensive
Objectives of External Stakeholders
Stakeholder | Objective |
---|---|
Suppliers |
|
Customers |
|
Pressure groups |
|
The local community |
|
The government |
|
The level of influence of stakeholders has an impact on whether a business changes its actions
In some cases, external stakeholders have a significant influence on business decisions
E.g. If a business does not meet a major supplier's objectives (e.g. failing to pay invoices on time), it could lead to a delay in the delivery of raw materials or components, which could cause production stoppages
The objectives of other external stakeholders may be less influential
E.g. A business may ignore demands from an environmental pressure group to phase out the use of single-use plastics as it would increase business costs
Examiner Tip
Considering the impact on stakeholders of business decisions is a great way to build chains of analysis in longer exam answers. You could consider how a decision may benefit some stakeholders, yet cause problems for others. You might also consider how stakeholders could respond to business decisions, and the impact of their responses on the business.
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