Strategic Business Leader · Stakeholder analysis and organisational social responsibility

Stakeholder Identification and Classification for ACCA SBL

Updated 11 October 2026 · Fact-checked

A stakeholder is any individual or group that can affect, or is affected by, an organisation's actions and objectives. You classify them as internal, connected or external, and as primary or secondary. Then you state each group's interest or claim and apply it to the scenario.

Understand Stakeholder Identification and Classification

A stakeholder is any person or group with an interest in what an organisation does, or with the ability to influence it. Shareholders are stakeholders. So are staff, lenders, customers, suppliers, regulators, communities and pressure groups. The idea matters in SBL because strategy, governance, ethics and change all depend on whose interests are being served.

The first classification is by closeness to the organisation. Internal stakeholders work within it: employees, managers and directors. Connected stakeholders have a direct economic or contractual relationship with it: shareholders, lenders, customers, suppliers and distributors. External stakeholders have no direct contract but are affected by it or can influence it: government, regulators, local communities, pressure groups, the media and trade unions (where they act from outside the organisation).

The second classification is by how directly the stakeholder is tied to the organisation's operations. Primary stakeholders are those without whose continuing participation the organisation cannot survive as a going concern. Typical examples are shareholders, employees, customers, suppliers and lenders. Secondary stakeholders affect or are affected by the organisation but are not essential to its survival day to day. Typical examples are the media, pressure groups and the wider community. Be careful: a secondary stakeholder can still become very powerful, for example a regulator that withdraws a licence.

Different stakeholders want different things. Shareholders want return and growth. Employees want pay, security and development. Lenders want interest and repayment. Customers want quality, value and safety. Suppliers want prompt payment and continued orders. Government wants tax, compliance and jobs. Communities want a safe environment and local benefit. These claims often conflict, so identifying them is the first step before you rank them (for example with a power-interest matrix) or manage them.

The classifications are tools, not rules. Many stakeholders sit in more than one group. An employee who also holds shares is both internal and connected. A bank is connected, but a government-owned bank may also be a regulator's concern. In the exam, say which category you are using and why, based on the facts in the case.

Key rules to remember

Internal stakeholders: Internal = employees, managers, directors; They work within the organisation and are directly affected by its decisions.
Connected stakeholders: Connected = shareholders, lenders, customers, suppliers, distributors; They have a direct economic or contractual link with the organisation.
External stakeholders: External = government, regulators, community, pressure groups, media; No direct contract, but they affect or are affected by the organisation.
Primary vs secondary: Primary = essential to survival; Secondary = affects or is affected, but not essential to survival; Judge this from the scenario. A secondary group can gain power quickly.
Stakeholder claim: Stakeholder → interest/claim → possible conflict → effect on strategy; Use this chain to turn a list of names into an applied answer.

How to solve Stakeholder Identification and Classification questions

Use this method for any question that asks you to identify, classify or discuss stakeholders in a case.

1Read the requirement and note whether it asks for identification, classification, interests, conflicts or a recommendation.
2Scan the scenario and underline every group mentioned or implied, including those not named directly, such as regulators or local residents.
3Classify each as internal, connected or external, and as primary or secondary. Use the case facts to justify each choice.
4State what each important group wants from the organisation, using evidence from the case.
5Note where claims conflict, for example shareholders wanting cost cuts against employees wanting job security.
6Judge which stakeholders matter most for the decision in the scenario and why.
7Finish with a clear recommendation or conclusion that answers the requirement, and keep it professional in tone.

Quickest way: Three-column stakeholder grid

When to use it: Use it when time is short or the case names many groups and you need a fast, organised plan.

Draw three columns on your planning page: Stakeholder, Category, Claim.
List every group from the scenario in the first column.
Tag each with I, C or E, then P or S.
Write a short claim from the case in the third column.
Circle the two or three groups whose claims conflict most and write about those first.

Common mistakes in Stakeholder Identification and Classification

Listing stakeholders with no link to the case.
Students recall a textbook list and write it out as a memory exercise.
Fix: Only name groups that appear in the scenario or are clearly affected, and tie each to a fact.
Putting shareholders in the internal group.
Shareholders own the company, so it feels like they are inside it.
Fix: Treat shareholders as connected. They have an economic relationship but do not work within the organisation, unless the case says they are also staff.
Treating primary and secondary as the same as important and unimportant.
The words sound like a ranking of power.
Fix: Primary means essential to survival. Power is a separate question. A secondary group such as a regulator can still hold great power.
Stating the category but not the claim.
Students stop after labelling because labelling feels like the answer.
Fix: For each key group add what they want and how that affects the organisation's decision.
Ignoring conflicts between stakeholders.
Each group is described separately and never compared.
Fix: Add a short point on which claims clash and what the board should do about it.
Using one fixed classification for every case.
Students memorise a table instead of reading the facts.
Fix: Say why a group fits a category in this case, and note where it could fit more than one.

Worked examples

Example 1

Zenith Foods is a listed manufacturer with a factory near a river. It employs 800 people, borrows from two banks, buys milk from local farmers and sells to supermarket chains. A local campaign group claims the factory pollutes the river. The environmental regulator is reviewing its permit. Classify the stakeholders as internal, connected or external, and explain their main claims.

Show the solution

Internal: employees and managers. They want secure jobs, fair pay and a safe workplace.
Connected: shareholders want a return on investment. The banks want interest and repayment. Farmers want fair prices and steady orders. Supermarkets want reliable, safe supply at agreed prices.
External: the campaign group wants the pollution stopped. The regulator wants legal compliance and may restrict the permit.
Primary: employees, shareholders, banks, farmers and supermarkets, because Zenith cannot operate without them.
Secondary: the campaign group and the regulator in normal operation. However, the permit review gives the regulator real power, so the board must treat it seriously.
Conflict: spending on pollution control reduces profit for shareholders but protects jobs and the permit.

Answer: Internal: employees and managers. Connected: shareholders, banks, farmers, supermarkets. External: campaign group and regulator. The first five are primary; the campaign group and regulator are secondary but potentially powerful. The main conflict is between shareholder returns and the cost of meeting environmental claims.

Example 2

A university runs a new campus abroad. Explain why a student could be treated as both a connected stakeholder and, in some circumstances, a primary stakeholder, and say why local residents are external and secondary.

Show the solution

Students pay fees and receive teaching under a contract. That is a direct economic relationship, so they are connected.
Without students paying fees and enrolling, the campus could not continue. That makes them primary.
Local residents have no contract with the university. They are affected by traffic, noise and housing demand, so they are external.
They are not needed for the campus to function day to day, so they are secondary.
Residents can still influence planning permission and local reputation, so the university should not ignore them.

Answer: Students are connected because they have a contract, and primary because the campus depends on them. Local residents are external and secondary because they have no contract and are not essential to operations, but their influence on permissions means they still need managing.

Exam tips

Always tie each stakeholder to a fact in the case. Generic lists earn few marks.
Say why a group fits a category. A short justification shows judgement and scores professional skills marks.
Do not stop at classification. Add the claim, the conflict and a recommendation if the requirement allows.
Look for hidden stakeholders such as regulators, local communities, lenders and the media. Cases often mention them in passing.
Link this topic to the next step in the same case, such as ranking by power and interest or a governance point.

Practice questions from Stakeholder analysis and organisational social responsibility

Stakeholder Identification and Classification in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

ACCA Applied KnowledgeTypes of Stakeholders and Stakeholder Classification

Stakeholder Identification and Classification: frequently asked questions

Who are stakeholders in SBL?

Stakeholders are any individuals or groups that can affect, or are affected by, an organisation's objectives and actions. Examples are shareholders, employees, customers, suppliers, lenders, government and communities. In the exam, name those that appear in the case.

What is the difference between primary and secondary stakeholders?

Primary stakeholders are those the organisation needs to survive, such as shareholders, employees, customers and suppliers. Secondary stakeholders affect or are affected by it but are not essential to survival, such as pressure groups and the media. A secondary group can still become powerful.

What is the difference between connected and external stakeholders?

Connected stakeholders have a direct economic or contractual link, such as shareholders, lenders and customers. External stakeholders have no such link but are affected by the organisation or can influence it, such as regulators and local communities.

Do I need to memorise a fixed table of stakeholders?

No. Learn the categories and typical examples, but classify based on the case facts. Some groups fit more than one category, and you should say why you chose the one you did.