Which group is an internal stakeholder?

• A. Employees, owners/shareholders and managers
• B. Government
• C. Banks
• D. The local community

Answer: (A)

Understanding internal versus external stakeholders helps describe who is part of the business versus who is outside it but affected by it. Internal stakeholders are those who are part of the organization and have a direct role in its workings: employees who do the work, owners or shareholders who own the company, and managers who run and oversee operations. Because they are inside the company, their interests are closely tied to its day-to-day performance and strategic decisions.

External stakeholders are outside the organization and influence or are influenced by its actions from the outside. The government regulates and taxes the business but isn’t part of it; banks provide financing from outside; the local community is affected by the company’s activities but isn’t part of the firm.

So the group consisting of employees, owners/shareholders, and managers is the internal stakeholder group.