Stakeholders are anyone who can affect or is affected by a company’s actions. They can be internal (employees, managers) or external (customers, suppliers, government, community). Understanding who they are, how important they are, and how much influence they hold helps a business make smart decisions.
Think of a company as a garden. Some plants (stakeholders) are the main flowers that attract visitors (customers), while others are the roots that keep the soil healthy (suppliers). The importance of each depends on the business goal.
| Stakeholder | Importance (High/Medium/Low) | Influence (High/Medium/Low) |
|---|---|---|
| Customers | High | High |
| Employees | Medium | Medium |
| Suppliers | Medium | Medium |
| Shareholders | High | High |
| Government | High | High |
| Community | Low | Low |
Exam Tip: When answering questions on stakeholder importance, use the importance–influence matrix and give a short example (e.g., “Customers are high importance and high influence because they drive sales.”)
Influence is the power a stakeholder has to affect business decisions. It can be:
When a company shifts its goal (e.g., from profit maximisation to sustainability), the importance and influence of stakeholders can change. Consider this analogy:
Example: A car manufacturer decides to produce electric vehicles. The government (regulations and incentives) and community (environmental concerns) now have higher influence, while traditional suppliers of internal combustion parts may see reduced importance.
Exam Tip: Use the stakeholder analysis matrix to show how a new objective shifts importance and influence. Provide at least two stakeholder groups and explain the change.