Final answer:
A stakeholder refers to any individual or organization that has an interest in or is affected by a company's operations, including employees, customers, shareholders, and more. Stakeholder theory suggests balancing the interests of all stakeholders, contrasting with the shareholder primacy focus on maximizing returns for shareholders.
Step-by-step explanation:
A stakeholder is any individual or organization with an interest in or who may be affected by a company's operations. This includes a wide array of groups such as employees, customers, shareholders, suppliers, communities, and even government agencies. In contrast, shareholders are a subset of stakeholders who own part of a company through stock ownership.
The stakeholder theory posits that companies should balance the interests of all stakeholders, not just shareholders, which contrasts with shareholder primacy that argues in favor of focusing on maximizing shareholder returns.Major groups of stakeholders can be categorized as internal stakeholders, including employees and managers, and external stakeholders, such as suppliers, society, government, creditors, shareholders, and customers.