Question

Identify one external stakeholder that is not in the position of an investor. Provide an example of how that stakeholder's relationship with a company could affect the company's performance. In the addition, how could the company's performance affect the external stakeholder?

Answer 1

One stakeholder that is not in the position of investor is the client or customer in a business. If the client's relationship with company goes wrong, they will stop availing the service or choose alternative, thus could lead to diminishing revenues. Lets say if a cab service company like Uber spoils its reputation in market due to some incident, the customers wont be availing cab and thus will lead to diminishing revenues.

Whereas if a company's performance goes down , they would get high fairs for the same cab service or even wont be able to avail their favourite cab service if Uber goes bankrupt.

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