Stakeholders: Impact and influence stakeholders have on businesses

The idea

Stakeholders do not just receive impacts; they can also shape what a business does. Employees may resist change through low productivity or industrial action, customers can switch to rivals or post negative reviews, suppliers can tighten credit terms, and local communities can lobby councils or generate bad publicity. Shareholders can vote against directors or sell shares, while government can change taxes, grants or regulations. The strength of influence depends on factors such as the stakeholder's power, the size of their stake, how organised they are and how much the business depends on them.

What earns the marks

• Identifies ways stakeholders can influence a business, such as customer switching, employee action, supplier pressure or shareholder voting.
• Explains the mechanism of influence, for example a boycott reduces revenue and forces a pricing or ethical review.
• Assesses the degree of influence using factors such as power, dependency, organisation and legal rights.
• Applies influence to a business example, showing a response such as changing a product, pay offer or location.
• Reaches a judgement on which stakeholder has the greatest influence and why.

Common mistakes and how to put them right

• Assuming all stakeholders have equal influence.

  Put it right: Compare power, dependency and organisation to rank influence.

• Describing influence without a mechanism.

  Put it right: State the action taken and the consequence for the business.

• Ignoring government and shareholders.

  Put it right: Include their legal and financial levers alongside customers and employees.

Exam tips

• Use connectives such as 'because', 'therefore' and 'as a result' to build a chain from stakeholder action to business response.
• Refer to the case study to show how influence plays out in context rather than in theory.
• For evaluation questions, weigh both sides and state a clear conclusion about the extent of influence.