Which statement best defines a stakeholder?

Which statement best defines a stakeholder?

• A. A person who provides capital only.
• B. An individual or group that has an interest in or is affected by the business's decisions.
• C. A customer who buys all products.
• D. A competitor in the same market.

Answer: (B)

A stakeholder is an individual or group that has an interest in or is affected by the business's decisions. This includes internal parties like employees and managers, as well as external ones such as customers, suppliers, shareholders, lenders, local communities, and government. Because stakeholders can influence and be affected by what the business does, managers must consider their needs when making decisions. The other choices are too narrow or mischaracterize who counts as a stakeholder: providing capital is just one role and doesn’t cover everyone who is affected or interested; a customer who buys all products is an unrealistic, overly specific example; a competitor isn’t typically considered a stakeholder because they aren’t directly affected by the business’s decisions in the same way. So the broad definition—an individual or group with an interest in or affected by the business's decisions—best fits.

A stakeholder is an individual or group that has an interest in or is affected by the business's decisions. This includes internal parties like employees and managers, as well as external ones such as customers, suppliers, shareholders, lenders, local communities, and government. Because stakeholders can influence and be affected by what the business does, managers must consider their needs when making decisions. The other choices are too narrow or mischaracterize who counts as a stakeholder: providing capital is just one role and doesn’t cover everyone who is affected or interested; a customer who buys all products is an unrealistic, overly specific example; a competitor isn’t typically considered a stakeholder because they aren’t directly affected by the business’s decisions in the same way. So the broad definition—an individual or group with an interest in or affected by the business's decisions—best fits.