Who are considered external stakeholders?

External stakeholders refer to individuals or groups that do not operate within a company but are affected by its actions, decisions, and policies. Government and customers are prime examples of external stakeholders.

Customers influence a business by their purchasing decisions, and their satisfaction with products or services can dictate a company's success or failure. When customers express their preferences or feedback, businesses often adapt their strategies to meet these demands, thus highlighting the significant role customers play as external stakeholders.

The government, on the other hand, imposes regulations and laws that businesses must comply with. These can include tax obligations, employment laws, environmental regulations, and more. Thus, government policies can directly impact how businesses operate, making them key external stakeholders as well.

Employees, managers, owners, shareholders, board members, and executives, as mentioned in the other choices, are considered internal stakeholders because they are part of the organization and have direct roles and responsibilities within it. Their interests may align closely with the company's operations, making them internal to the organization. Understanding the distinction between internal and external stakeholders is crucial in business management as it helps companies strategize effectively and address the diverse interests of those involved with or affected by the business.