Key Idea: Stakeholders are individuals or groups who affect, or are affected by, a business. IB exams test whether you can identify the right stakeholder, explain their interests, analyse conflicts, and evaluate how much influence they have.
Core structure (memorise)
- Stakeholder = affects or is affected by the business
- Internal stakeholders = employees, managers, owners/shareholders
- External stakeholders = customers, suppliers, government, community, pressure groups, banks
- Each stakeholder has different interests
- Different interests often create conflict
🏢 Internal stakeholders: **Employees** → pay, security, conditions, progression. **Managers** → resources, authority, success. **Owners/shareholders** → profit, growth, return on investment.
🌍 External stakeholders: **Customers** → quality, price, service. **Suppliers** → prompt payment, regular orders. **Government/community/pressure groups** → compliance, jobs, low pollution, ethical behaviour.
High-yield facts examiners expect
- Stakeholder questions appear in almost every exam paper
- Not all stakeholders have equal power
- A stakeholder can influence business decisions directly or indirectly
- Every major business decision creates winners and losers
- Conflicts often arise because one group benefits at another group’s expense
- Good answers identify specific stakeholders, not vague groups like 'people'
⚡ Common stakeholder conflicts: **Owners vs employees** → lower wages vs higher pay. **Customers vs owners** → low prices vs high profit margins. **Business vs community** → expansion vs noise/pollution. **Shareholders vs managers** → dividends now vs reinvestment for growth.
🛠️ Ways to reduce conflict: Communication. Negotiation and compromise. Transparency. CSR programmes. Stakeholder mapping by power and interest.
How stakeholders influence decisions
- Shareholders vote and can replace directors
- Employees can negotiate or take industrial action
- Customers influence through buying, boycotting and reviews
- Government influences through laws, tax and regulation
- Pressure groups influence through campaigns and media attention
- Banks and suppliers influence through finance and trading terms
Use the 3-step method: name the stakeholder, state their interest, explain the impact. This works for almost every stakeholder question.
Example: Employees are important stakeholders because they want job security and fair pay. If the business automates production, some employees may face redundancy, which could reduce morale and increase resistance to change.
Tip: For 8–10 mark questions: identify at least two stakeholder groups, explain what each wants, show where their interests clash, suggest a solution, then evaluate whether that solution is realistic.
Important: Do not just list stakeholders. Marks come from explaining their interests, their level of influence, and how the specific decision affects them.
Important: Identify stakeholders affected by a decision, explain stakeholder conflict, analyse stakeholder influence, or discuss how ethical issues affect different stakeholder groups.
- Identify the specific stakeholder group
- Explain what they want
- Explain how the decision affects them
- If relevant, show conflict, influence, and possible resolution