External stakeholders include which groups?

• A. Banks
• B. Local residents, environmental groups, government, trade unions
• C. Shareholders
• D. Employees

Answer: (B)

External stakeholders are groups outside the organization that can affect or be affected by its actions. The groups listed here—local residents, environmental groups, government, and trade unions—fit that description. They are not part of the firm, but their interests and actions interact with the business: communities and environmental groups influence public opinion and policy; the government sets regulations and requirements; and trade unions represent workers in labor matters. In contrast, employees are internal to the company, and shareholders are typically considered internal owners, so options that focus on internal groups or only one external party don’t capture the full external stakeholder set.