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A LevelBusinessCambridge (CIE)Revision NotesBusiness and Its EnvironmentStakeholders in a BusinessInternal and External Stakeholders

Internal and External Stakeholders (Cambridge (CIE) A Level Business): Revision Note

Exam code: 9609

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

Updated on

Introducing business stakeholders

  • A stakeholder is any person, group, or organisation that has an interest in or is affected by the activities and decisions of a business

Diagram of business stakeholders, showing owners, employees, customers, government, suppliers, managers, local community, and pressure groups.
Stakeholders are individuals or groups with an interest in the activities of a business

  • A business needs to take into account the needs and interests of its stakeholders in order to operate successfully and ensure long term success

  • Different stakeholders may have different priorities, which means that at times, it may be difficult for the business to please all stakeholders

Internal stakeholders

  • An internal stakeholder is someone who is directly involved inside the organisation and is affected by its day-to-day operations and decisions

Owners

  • Provide capital and take overall responsibility for the business

  • Invest in a company by buying shares

Rights

Responsibilities

  • Right to profits, right to make decisions (especially in small firms), right to close the business

  • Right to dividends, vote at AGMs, access to key financial info

  • Run the business ethically and legally, reinvest or distribute profits, ensure long-term success

  • Vote responsibly, monitor company performance, support long-term growth

Employees

  • Work in the business and carry out tasks assigned to them

Rights

Responsibilities

  • Right to fair pay, safe working conditions, job security, non-discrimination

  • Work effectively, follow company rules, respect colleagues and customers

Managers and directors

  • Lead teams and run daily operations

Rights

Responsibilities

  • Right to make decisions within their department or branch

  • Meet targets, manage people and resources, report to senior leaders

External stakeholders

  • An external stakeholder is a person or group outside the business who is affected by or has an interest in its activities and performance

Customers

  • Purchase and use goods or services

Rights

Responsibilities

  • Right to safe, good-quality products, fair prices, clear information

  • Use products correctly, pay on time, give feedback

Suppliers

  • Provide goods, materials or services needed for production

Rights

Responsibilities

  • Right to be paid on time, fair contracts, clear communication

  • Deliver on time, maintain quality, be reliable

Creditors

  • Lend money or provide trade credit to the business

Rights

Responsibilities

  • Right to be repaid on time, to receive interest, if agreed

  • Provide funds as agreed; assess business risk before lending

Local community

  • Lives near or is affected by the business’s operations

  • May be employed by the business

Rights

Responsibilities

  • Right to clean environment, jobs, reduced noise and traffic

  • Participate in consultations, give feedback, support local business where possible

Government

  • Regulates business activity, collects tax and sets laws

Rights

Responsibilities

  • Right to collect taxes, inspect for compliance, enforce regulations

  • Enforce laws fairly, support economic stability, provide public services

Pressure groups

  • Campaign to influence business behaviour, especially on social issues

Rights

Responsibilities

  • Right to protest, raise awareness, organise campaigns

  • Act lawfully, communicate concerns clearly, represent public or ethical views

Competitors

  • Offer similar products and services in the same market

Rights

Responsibilities

  • Right to compete fairly and legally

  • Compete ethically; avoid misleading advertising or copying innovations

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    Author
    Reviewer
    Lisa Eades

    Author: Lisa Eades

    Expertise: Business Content Creator

    Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

    Steve Vorster

    Reviewer: Steve Vorster

    Expertise: Economics & Business Subject Lead

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.