Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Which of the following best describes external stakeholders?

1. Employees and managers of the organization

2. Shareholders and suppliers

3. Community, government, and pressure groups

4. Financiers and partners

The correct answer is: Community, government, and pressure groups

External stakeholders are individuals or groups that do not belong to the organization but are affected by or can affect its operations and decisions. This includes the community, government, and pressure groups. The community represents the broader societal context in which the organization operates and can influence public perception and company reputation. Government entities can impose regulations and policies that organizations must adhere to, thereby affecting their operations and profitability. Pressure groups often advocate for social or environmental issues and can influence organizational practices through activism or public campaigns. These stakeholders play a critical role in shaping the organization's external environment and can have significant impacts on its strategies and long-term success. This distinction highlights their outside perspective toward the organization, contrasting with internal stakeholders, such as employees and managers, who are directly involved in the organization's operations.