Who are considered primary stakeholders of a firm?

Who are considered primary stakeholders of a firm?

• A. Customers and suppliers
• B. Investors and media representatives
• C. Employees and shareholders
• D. Community groups and activists

Answer: (C)

Primary stakeholders are individuals or groups that have a direct and essential interest in the operations, performance, and outcomes of a firm. Their actions and interests significantly influence the company's decisions and strategies. Employees and shareholders fall into this category because employees contribute directly to the daily operations and success of the business through their work, while shareholders invest capital and expect a return on their investment. Both groups are integral to the company's ability to function, grow, and achieve its objectives, establishing them as primary stakeholders. In contrast, other choices contain groups that may have important interests or influences regarding a firm's actions but are not as directly tied to its core operations or immediate success. For instance, customers and suppliers are important, but their relationship with the firm can sometimes be seen as more transactional depending on the context, which may lead them to not be classified strictly as primary stakeholders. Investors are primary stakeholders, but media representatives do not typically have a direct stake; they would be considered more secondary stakeholders as they report on the firm’s actions rather than being directly impacted by them. Community groups and activists do play roles in shaping a firm's reputation and societal impact but align more with the interests of secondary stakeholders since they do not directly participate in the firm's business activities.

Primary stakeholders are individuals or groups that have a direct and essential interest in the operations, performance, and outcomes of a firm. Their actions and interests significantly influence the company's decisions and strategies.

Employees and shareholders fall into this category because employees contribute directly to the daily operations and success of the business through their work, while shareholders invest capital and expect a return on their investment. Both groups are integral to the company's ability to function, grow, and achieve its objectives, establishing them as primary stakeholders.

In contrast, other choices contain groups that may have important interests or influences regarding a firm's actions but are not as directly tied to its core operations or immediate success. For instance, customers and suppliers are important, but their relationship with the firm can sometimes be seen as more transactional depending on the context, which may lead them to not be classified strictly as primary stakeholders. Investors are primary stakeholders, but media representatives do not typically have a direct stake; they would be considered more secondary stakeholders as they report on the firm’s actions rather than being directly impacted by them. Community groups and activists do play roles in shaping a firm's reputation and societal impact but align more with the interests of secondary stakeholders since they do not directly participate in the firm's business activities.