Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What does the term 'internal stakeholders' refer to?

1. Shareholders and vendors

2. Employees and managers

3. Customers and suppliers

4. Community and regulators

The correct answer is: Employees and managers

The term 'internal stakeholders' specifically refers to individuals or groups within an organization who are directly involved in its operations. This includes employees, who contribute their labor and expertise, and managers, who are responsible for planning, directing, and coordinating activities within the organization. Together, they make up the core of the organization, influencing its culture, productivity, and performance. In contrast, the other options pertain to external stakeholders or those who may have an interest in the organization's success but are not part of its internal structure. Shareholders and vendors, for instance, do have a vested interest in the business but do not engage directly in day-to-day operations. Customers and suppliers are also external parties that interact with the organization but do not contribute to its internal workings. Likewise, the community and regulators influence the organization externally, dealing with it from outside its core operations. Therefore, the focus on employees and managers clearly identifies them as internal stakeholders, essential to the organizational framework.