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CS Professional · Strategic Management and Corporate Finance · Analyzing the External and Internal Environment

Which statement correctly distinguishes primary stakeholders from secondary stakeholders of a company?

Primary stakeholders, such as shareholders, employees, customers and suppliers, have a direct economic relationship with the company and are essential to its survival. Secondary stakeholders, such as the media and pressure groups, influence or are affected by it but do not engage in direct transactions.

  1. APrimary stakeholders, such as shareholders, employees and customers, have a direct and formal economic relationship with the firm, while secondary stakeholders, such as media and pressure groups, are not directly engaged in transactions with itCorrect
  2. BPrimary stakeholders are only the government and regulators, while secondary stakeholders are only the employees
  3. CPrimary stakeholders are the competitors, while secondary stakeholders are the shareholders
  4. DThere is no difference, as both groups have identical relationships with the firm

Explanation

Primary stakeholders are directly involved in the firm's economic activities and its survival depends on them. Secondary stakeholders like media or pressure groups can influence or be affected by the firm without transacting with it. The other options assign the groups wrongly.

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