WACE Business — Year 12 background
Stakeholders — WACE Business — Year 12 background Flashcards & Quiz
Stakeholders are the individuals and groups with an interest in a business's decisions. Stakeholder analysis is not a separate dot point in the current WACE Business Management and Enterprise Year 12 syllabus, although the syllabus describes businesses meeting their moral and ethical obligations to their stakeholders. Treat this page as background: it supports Unit 3 content on ethics in global business decisions and managing change, and Unit 4 content on ethical practice, ILO labour standards, corporate social responsibility and environmental sustainability.
Key Points
- Internal stakeholders: owners or shareholders, managers and employees.
- External stakeholders: customers, suppliers, government, the community, creditors and competitors.
- Interests conflict: shareholders want profit, employees want pay and job security, the community wants environmental and social responsibility.
- A power-interest grid sets priorities: manage closely, keep satisfied, keep informed or monitor.
- Unit 3 links: ethics of outsourcing and offshore labour, environmental responsibility, and resistance to change from staff and managers.
- Unit 4 links: ILO minimum labour standards, corporate social responsibility and environmental sustainability in global operations.
Common Mistakes to Avoid
- Confusing internal and external stakeholders — employees are internal, customers external.
- Listing stakeholders without analysing their power and interest.
- Ignoring trade-offs — satisfying one group often costs another.
- Forgetting to link stakeholder management to business objectives.
- Assuming transparency resolves all conflicts — some conflicts need negotiation or compromise.
Exam Strategy
Use stakeholders as a lens in answers on the listed Unit 3 and Unit 4 content. For an ethics or CSR question (for example, outsourcing to offshore labour), name the stakeholders affected, state each group's interest, show where interests conflict, and judge the decision against ILO standards or CSR. For a change management question, identify which stakeholders resist change and why (financial costs, managerial inertia, staff attitude) before applying Lewin's Forcefield Analysis or Kotter's 8 Steps.
Sample Flashcards
Q1: What is a stakeholder, and how do internal and external stakeholders differ?
A stakeholder is any individual or group affected by, or able to affect, a business's decisions. Internal stakeholders work within or own the business: owners or shareholders, managers and employees. External stakeholders are outside it: customers, suppliers, government, creditors, competitors and the wider community. Both groups have different interests that management must balance when making decisions.
Q2: Give an example of conflicting stakeholder interests.
A company deciding whether to close a local factory and outsource production overseas faces conflicting interests. Shareholders may welcome lower costs and higher profits. Employees face job losses, and the local community loses income and spending. Customers may gain lower prices but worry about quality or ethics. Management must weigh these interests against the business's objectives and values.
Q3: How does a power-interest grid help a business manage stakeholders?
A power-interest grid places stakeholders according to their power to influence the business and their interest in a decision. High power, high interest: manage closely. High power, low interest: keep satisfied. Low power, high interest: keep informed. Low power, low interest: monitor. It helps managers decide where to focus consultation and communication.
Q4: How do stakeholders shape ethical decisions about outsourcing and offshore labour?
Outsourcing to countries with lower labour costs can raise profit for shareholders, but it can harm domestic employees and expose the business to criticism if overseas workers face poor pay or conditions. Customers, investors and the community increasingly expect ethical supply chains. Weighing these stakeholder interests helps a business judge whether a decision is ethically and commercially sound.
Q5: Why do stakeholders resist change, and how can managers respond?
Stakeholders may resist change because of financial costs, managerial inertia, cultural incompatibility in mergers or takeovers, or staff attitudes such as fear of job loss. Managers can respond with communication, consultation and training. Lewin's Forcefield Analysis weighs driving forces against restraining forces, and Kotter's 8 Steps model builds urgency, a guiding coalition and a shared vision.
Revision Tip
Drill stakeholder classification and the power-interest grid on Revizi, then practise applying them to an outsourcing or merger case.
Related Concepts
Last updated: 9 October 2026 · 6 sample flashcards