Final answer:
The groups mentioned such as shareholders, employees, customers, suppliers, governments, and local communities are examples of 'stakeholders', which is a broad term encompassing anyone who has an interest in or is affected by the company's operations.
Step-by-step explanation:
Groups such as shareholders, employees, customers, suppliers, governments, and local communities are examples of stakeholders. A stakeholder is anyone who has an interest or is affected by a company's operations, whether through direct interactions like purchasing products or employment or through indirect impacts like environmental effects on local communities.
In contrast to shareholders who hold a financial interest in a company by owning its shares, stakeholders encompass a broader category that includes any individual or group that is impacted by the company's operations. This includes not only those who may gain financially, such as shareholders and employees, but also customers who depend on the company's products or services, suppliers who provide raw materials, governments that may collect taxes and regulate industry practices, and the broader community which may experience economic, social, or environmental effects as a result of the company's activities.
The distinction between shareholders and stakeholders is important for understanding corporate responsibilities and ethics, as it poses the question of to whom a corporation should be accountable. While Milton Friedman argued for a focus on returning maximum profit to shareholders, the broader stakeholder perspective suggests that a company's responsibilities extend further to include others affected by its actions. Thus, a stakeholder approach can inform decisions that balance profit with ethical considerations and the welfare of a wider community.