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ACCA Strategic Professional · Strategic Business Leader · Stakeholder analysis and organisational social responsibility

Orlin Pharma is reviewing its stakeholders. The finance director says that managers, employees and shareholders should be treated as the only groups that matter, because they are inside the organisation or own it. Which view of stakeholders does this reflect, and what is the key criticism of it?

This is a narrow view of stakeholders, criticised for ignoring external groups affected by the company's actions. Communities, regulators, customers and suppliers can all influence or be influenced by Orlin, so overlooking them creates reputational, legal and strategic risks.

  1. AA broad view, criticised for ignoring shareholders
  2. BA narrow view, criticised for ignoring groups affected by the company's actionsCorrect
  3. CA broad view, criticised for giving too much weight to regulators
  4. DA narrow view, criticised for overemphasising customers

Explanation

Limiting attention to internal groups and owners is a narrow view of stakeholders. The main criticism is that it neglects external groups such as communities, regulators, suppliers and customers, who can affect or be affected by the company. This creates reputational and strategic risk.

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