Key Idea: Many people are affected by what a business does, and many of them can affect it back. This topic is who they are, what each wants, why they clash, and whose voice carries most weight.
Who they are
- Internal: owners or shareholders, managers, employees.
- External: customers, suppliers, lenders, government, the local community, pressure groups.
- One person can sit in two groups: Marco owns shares and manages a shop.
What they want, and the clash
- Owners want profit; employees want pay and security; customers want low prices and quality.
- The community wants jobs and quiet streets; the government wants tax and rules kept.
- More for one group often means less for another.
Who has the most say
- Influence comes from power (what they can do) and interest (how much they care).
- Pressure groups raise their power by acting together: petitions, boycotts, social media.
- A decision lands differently on each group.
The words to know
| Word | Means | Do not confuse with |
|---|---|---|
| Stakeholder | any person or group affected by, or able to affect, a business | a shareholder, who is one kind of stakeholder: an owner |
| Internal stakeholder | a stakeholder inside the business: owners, managers, employees | a local stakeholder: customers can live next door and still be external |
| External stakeholder | a stakeholder outside the business: customers, suppliers, lenders, government, community | an unimportant one: a bank can close a business |
| Pressure group | people with a shared interest who try to influence an organisation's decisions | a customer complaint: a pressure group organises and campaigns |
| Stakeholder conflict | when meeting one group's interests means meeting another's less | a disagreement inside one group, such as two managers arguing |
| Power | how much a stakeholder can change what the business does | interest, which is how much they care |
Name the group, say what it wants, then show how the decision in the case helps or hurts it. For a conflict, name two groups and the one thing that cannot give both what they want.
Exam-style question
Lena's Bakery Ltd plans to bake overnight for all three shops at a single site on Mill Lane, a residential street. Explain how this decision could affect two stakeholder groups.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.
Important: 'The community is affected' earns little. Say what the community wants, then how this decision changes it. And do not confuse stakeholders with shareholders: shareholders are only the owners.
Tap each card to check yourself.
Internal or external: the bank that lent Lena $6,000? External. It is outside the business, but it can have great power if repayments are missed.
Define a pressure group. People who share an interest and try to influence the decisions of an organisation, for example by campaigning.
Why do owners and employees often clash? Money spent on higher wages is money not paid out as profit or dividends, so more for one means less for the other.
What gives a stakeholder group power? What it can do to the business: withdraw money, stop supplying, stop buying, change the law, or act together in numbers.
Can one person belong to two stakeholder groups? Yes. Marco is a shareholder and a manager; a baker can also be a customer and a local resident.
How can a small pressure group change a big firm's plans? By acting together: petitions, social media, protests, boycotts, or lobbying the council or government that sets the rules.
Exam tips
- A stakeholder is anyone affected by the business; a shareholder is only an owner.
- Internal means inside the business: owners, managers, employees. Everyone else is external.
- Always pair a group with what it wants before you say how it is affected.
- In a conflict, name the two groups and the single thing they disagree over.
- Pressure groups gain power by acting together; say how they would act in the case.