How does CIPS structure exam questions concerning stakeholders?

19/09/2025 Daniel Do Comments 0 Comment

Stakeholder management is emphasized in the CIPS Level 4 study guides, as no company can operate effectively without managing stakeholders. In the CIPS exam, this concept appears in both OR and CR modules, highlighting the importance of a deep understanding of the topic. The exam questions typically focus on stakeholder classification, stakeholder management and its impact on procurement and supply activities. To successfully tackle these challenging questions, students should thoroughly understand the theory and refer it to their own workplace experiences.

Stakeholders refer to individuals or institutions who have a specific interest in or influence over a company. If the company cannot identify all relevant stakeholders, they may pose significant risks. According to the CIPS study guides, CIPS categorize stakeholders into 3 groups: internal stakeholder, connected stakeholders and external stakeholders.

Internal stakeholders

They are internal individuals or departments within a company who have a strong interest in and a certain level of influence over procuement and supply activities, including:

Business Owners: They hold the highest level of authority in a company, with interests mainly focused on business profits, business development and employee walfare…While they may not be involved directly in daily business operations, they care deeply about overall business performance. Procurement activities strive for achieving business goals that they set up.
Business Departments: It can be sales department, marketing department, production department, quality department, technical department, transport department…Each department has a specific impact on procurement activities.
- A sales department is responsible for generating sales revenue and customer orders for their company. Each customer order triggers a need to source components, raw materials….which the procurement department fulfills.
- A technical department can support buyers in developing the specification, enabling clear communication of the business needs to suppliers.
- A quality department is responsible for checking the quality of purchased items, ensuring that these products meet agreed specifications. Buyers work closely with this department to manage supplier performance effectively.
- A production department is responsible for producing goods/ services, helping a company to fulfill its customer orders. This department raises their needs on input materials manually, electrically or through MRP system. Procurement department must coordinate with suppliers to timely delivery of inputs.
- A marketing department provides buyers with insights into market trend, helping them source materials that align with consumer preferences and attract more customers.
- Transport department has a responsibility to deliver products customers (outbound logistics) or collecting goods from supplier’s premises (inbound logistics).

Connected stakeholders

It refers to external stakeholders who often have a contractual relationship with a company, including:

Banks: A company may deposit its money in a bank and earn interests on its saving account. Besides, banks play an important role in providing loans for a company, helping them finance its business operations.
Investors: They often have a financial interest in a company, as they invest capital in a company and earn dividents from the success of its business activities.
Suppliers: They are among a company’s key stakeholders. A company with solid supplier base can optimize its operations and achieve competitive advantages in the market. Suppliers are responsible for providing input materials which are used to produce finished products. Supplier’s competence decides the quality and competitve prices of input materials.
Customers: They are the source of sales revenue for a company. Customer orders play a vital role in keeping a business alive. Many companies refer customers as “king”, so they would do everything to keep their customers satisfied.

External stakeholders

These stakeholders often have less financial interest and power within a company, but they still have a certain impact on a company’s business activities, including:

Community: It refers to local residents who live around a company. They have a vested interest in a company, as its business activities may cause noise, water, and air pollution. Their quality of life can detoriorate significantly if they are exposed to contaminated water or excessive noise, especially during the evening.
Media: They are responsible for conveying news to the public via online platforms or paper-based newspapers. If a company engages in illegal activities, the media may uncover and report them. Such exposure can reach a wide audience, potentially damaging a company’s reputation and resulting in the loss of loyal customers.
Government and regulatory bodies: They establish legislations that every organization must comply with. The regulations guide corporate behavior to ensure ethical and lawful conduct.
….

We provide CIPS practice questions with answers and detailed explanation, besides they are updated regularly to reflect the actual exam. If you want to consolidate your knowledge before the exam, you can check the links below. The discount code is LUCKYSEPT25.

L4M1: https://www.udemy.com/course/cips-l4m1-practice-test-short-learning-guide/?couponCode=LUCKYSEPT25

L4M2: https://www.udemy.com/course/cips-diploma-l4m2-practice-test/?couponCode=LUCKYSEPT25

L4M3: https://www.udemy.com/course/cips-diploma-practice-test-commercial-contracting/?couponCode=LUCKYSEPT25

L4M4: https://www.udemy.com/course/cips-diploma-practice-test-ethical-responsible-sourcing/?couponCode=LUCKYSEPT25

L4M5: https://www.udemy.com/course/cips-practice-test-commercial-negotiation/?couponCode=LUCKYSEPT25

L4M6: https://www.udemy.com/course/cips-diploma-practice-test-supplier-relationships/?couponCode=LUCKYSEPT25

L4M7: https://www.udemy.com/course/level-4-diploma-whole-life-asset-management-l4m7/?couponCode=LUCKYSEPT25

L4M8: https://www.udemy.com/course/cips-l4m8-practice-in-procurement-and-supply/?couponCode=LUCKYSEPT25

L5M1: https://www.udemy.com/course/updated-l5m1-full-course-managing-teams-and-individuals/?couponCode=LUCKYSEPT25

L5M2: https://www.udemy.com/course/cips-l5m2-daniel-do/?couponCode=LUCKYSEPT25

L5M3: https://www.udemy.com/course/l5m3-daniel/?couponCode=LUCKYSEPT25

L5M4: https://www.udemy.com/course/l5m4-advanced-contract-and-finance/?couponCode=LUCKYSEPT25