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Flip to reveal answersStakeholders can be internal or external. What does internal mean?
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All 20 Flashcards — Internal and external stakeholders
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Question
Stakeholders can be internal or external. What does internal mean?
Answer
Internal stakeholders are inside the business and directly involved in operations (employees, managers, owners).
💡 Hint
Inside the business.
Question
Why might customers and owners have conflicting interests?
Answer
Customers want low prices and high quality, while owners often want higher profit margins (which may require higher prices or lower costs).
💡 Hint
Low price vs high profit.
Question
Define a stakeholder.
Answer
Any individual or group that affects or is affected by a business’s actions and decisions.
💡 Hint
Stakeholder = affects / affected.
Question
What is Step 1 of the “name, interest, impact” approach?
Answer
Name the specific stakeholder group (e.g. employees, customers, government).
💡 Hint
Be specific.
Question
Name two external stakeholders.
Answer
Customers and government (also suppliers, community, banks, pressure groups).
💡 Hint
External = outside.
Question
State two internal stakeholders.
Answer
Employees and owners/shareholders (or managers).
💡 Hint
Internal = inside the business.
Question
What do suppliers usually want from a business?
Answer
Regular orders, prompt payment, and long-term contracts.
💡 Hint
Suppliers want reliability and payment.
Question
In stakeholder answers, why is “people” a weak term?
Answer
It is too vague. Examiners reward specific stakeholder groups (e.g. local residents, employees, suppliers).
💡 Hint
Specific stakeholder names score better.
Question
State two external stakeholders.
Answer
Customers and suppliers (also government, community, banks, pressure groups).
💡 Hint
External = outside the business.
Question
How can delaying payment help a business but harm suppliers?
Answer
It improves the business’s cash flow, but it can create cash flow problems for suppliers who rely on timely payment.
💡 Hint
Cash flow trade-off.
Question
What should you do after stating a stakeholder’s interest?
Answer
Explain how the specific business decision affects that stakeholder in the scenario.
💡 Hint
Always link to the decision.
Question
Why do stakeholder interests often conflict?
Answer
Because different groups want different outcomes (e.g. higher wages vs higher dividends, low prices vs high margins).
💡 Hint
Different priorities.
Question
What does the local community typically want from a business?
Answer
Jobs and positive contribution with minimal pollution/noise/traffic problems.
💡 Hint
Community wants benefits, not harm.
Question
State one common stakeholder question type in exams.
Answer
Identify two stakeholders affected by this decision (2 marks).
💡 Hint
Expect identify / explain / discuss.
Question
What do employees typically want from a business?
Answer
Fair pay, job security, good working conditions, and career progression.
💡 Hint
Employees: pay + security + conditions.
Question
What is the 3-step exam approach to stakeholder questions?
Answer
Name the stakeholder, state their interest, explain the impact.
💡 Hint
Name + interest + impact.
Question
Exam skill: What is the best way to write about stakeholders?
Answer
Use: name the stakeholder, state their interest, then explain the impact of the decision on them.
💡 Hint
Name + interest + impact.
Question
Exam rule: What should you avoid when listing stakeholders?
Answer
Avoid generic groups (e.g. “people”). Use relevant, specific stakeholders from the case.
💡 Hint
Specific beats generic.
Question
What makes stakeholder answers “top band” for extended response?
Answer
They compare impacts on multiple stakeholders, show conflict/trade-offs, and apply to the case facts.
💡 Hint
Multiple stakeholders + trade-offs + application.
Question
What do shareholders typically want?
Answer
Profit, growth, dividends, and increasing business value.
💡 Hint
Shareholders want returns.
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