Understand what is meant by a stakeholder and who the main stakeholders of…

The idea

A stakeholder is any individual or group with an interest in a business and who can affect or be affected by its activities. The main stakeholders are owners, employees, customers, the local community and suppliers. Owners provide capital and expect returns; employees provide labour and seek secure work and fair pay; customers buy goods or services and expect quality and value; the local community experiences effects such as jobs, traffic or pollution; suppliers provide materials or services and depend on prompt payment and continued orders. For example, a bakery's owners, bakers, shoppers, neighbours and flour supplier all have a stake. Stakeholder influence varies with power and interest, so businesses often balance competing needs when making decisions.

What earns the marks

• Defines a stakeholder as any individual or group with an interest in a business and who can affect or be affected by its activities.
• Identifies owners as stakeholders who provide capital, bear risk and expect a return on investment.
• Identifies employees as stakeholders who provide labour and seek secure employment, fair pay and safe working conditions.
• Identifies customers as stakeholders who purchase goods or services and expect quality, value and reliable service.
• Identifies the local community as a stakeholder affected by employment, traffic, noise, pollution or local spending.
• Identifies suppliers as stakeholders who provide materials or services and depend on prompt payment and continued orders.
• Explains that different stakeholders have different interests and levels of influence, so businesses may need to balance competing demands.

Common mistakes and how to put them right

• Treating shareholders as the only stakeholders.

  Put it right: Recognise that employees, customers, the local community and suppliers also have a stake.

• Confusing stakeholders with shareholders.

  Put it right: Shareholders are owners, but stakeholders include all groups affected by or interested in the business.

• Assuming all stakeholders have equal influence.

  Put it right: Influence depends on power and interest, so some groups can affect decisions more than others.

Exam tips

• Use the definition of a stakeholder in the introduction, then name each main group and give a specific interest.
• Apply each stakeholder group to the business context in the case study rather than listing generic groups.
• When explaining influence, refer to power and interest to show why some stakeholders matter more in a decision.