Who are groups outside a business that have an interest in its activities?

External stakeholders are individuals or groups outside a business that have an interest in its operations and decisions. This can include customers, suppliers, the community, government agencies, and financial institutions. Their interests may vary widely; for example, customers are concerned about the quality and price of products, while suppliers want to ensure reliable contracts and payment, and the community may focus on environmental impact.

Recognizing the role of external stakeholders is crucial for businesses, as their support can significantly influence a company’s success and reputation. For instance, maintaining good relationships with external stakeholders often leads to better customer loyalty, more robust supply chains, and favorable community support, all of which are essential for achieving long-term objectives.

The other choices represent different categories of stakeholders. Internal stakeholders include parties like employees and management who operate within the organization and are directly involved in its activities. Shareholders are also internal stakeholders but more specifically refer to individuals or entities that own shares in the company. Employees, likewise, focus on their roles within the organization but do not encompass the broader perspective of external groups that might influence the business from the outside.