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AO2 You need to be able to: Demonstrate application and analysis of knowledge and understanding
Command Terms: These terms require students to use their knowledge and skills to break down ideas into simpler
parts and to see how the parts relate: Analyse, Apply, Comment, Demonstrate, Distinguish, Explain, Interpret, Suggest


1.4 The interests of internal stakeholders AO2

1.4 The interests of external stakeholders AO2


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Internal stakeholders may have different objectives and level of risk. Examine the chart below:

Stakeholder Objective Risk
Shareholders (may be companies not people) Dividend income Small, if investment is part of the portfolio of shares owned.
Directors - executive

Income and power

 Higher, but may have many directorships, and savings.
Directors - non-executive Many, depending why they are there. Gives some income. May well be small, smaller than that of executive directors.
Managers Income Higher than Directors but lower than that of workers.
Workers Continuation of job. Earnings to pay the cost of living High. No job = no income. Jobs may be hard to get.


The diagram below may help with remembering all the different stakeholders.

stakeholders

Figure 1 Stakeholders - internal and external

This model can be a useful plan when answering questions.

Remember, stakeholder questions usually boil down to 'it all depends'. It all depends to which stakeholder group the individual belongs.

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Some food for thought

There are many groups who are stakeholders inside and outside of a firm who have an interest in its operation, and obviously its survival.

Have we reached a state where the interests of some stakeholders are becoming dominant, and even unfair? For instance, should shareholders interest be dominant or should firms be more sensitive to the roles and responsibilities it has in the society and the area in which it operates?


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Why not try the following questions to check you are sure about internal and external stakeholders?

1
Internal and external stakeholders

Match the following stakeholders to their status as either internal or external stakeholders.

a)
b)
Yes, that's correct. Well done.No, that's not right. Try again.Your answer has been saved.
Check your answer

2
Internal and external stakeholders

Match the following stakeholders to their status as either internal or external stakeholders.

a)
b)
Yes, that's correct. Well done.No, that's not right. Try again.Your answer has been saved.
Check your answer

3
Internal and external stakeholders

Match the following stakeholders to their status as either internal or external stakeholders.

a)
b)
Yes, that's correct. Well done.No, that's not right. Try again.Your answer has been saved.
Check your answer