Identifying Stakeholders

Stakeholders are a central concept in AQA A-Level Business Topic 3.2. Every business decision affects a range of groups and individuals, and understanding who these stakeholders are, what their interests are, and how they can influence the business is essential for effective management and decision making. This lesson introduces the concept of stakeholders and examines the distinction between internal and external stakeholders.

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What Is a Stakeholder?

Key Definition: A stakeholder is any individual, group, or organisation that has an interest in, or is affected by, the activities and decisions of a business.

The stakeholder concept was popularised by R. Edward Freeman in the 1980s. Freeman argued that businesses should not focus solely on shareholders (owners) but should consider the interests of all groups who have a "stake" in the business.

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Internal vs External Stakeholders

Stakeholders are commonly classified as internal or external depending on their relationship to the business.

Internal Stakeholders

Internal stakeholders are individuals or groups within the organisation who are directly involved in its operations.