Definition: A stakeholder is a person, group, community, union, or an entity that has any interest or is impacted by a business or its outcome. A stakeholder can be internal or external to an organization.
For a business, a stakeholder can be management, employees, shareholders, suppliers, or end-product users.
Types of stakeholders
A stakeholder can be of the following types:
- Customers
- Employees
- Suppliers
- Local Communities
- Investors
- Governments
Stakeholders can also be divided into the following two categories:
- Internal Stakeholders
- External Stakeholders
Internal Vs External Stakeholder
A stakeholder can be internal or external to the organization.
Internal stakeholders are internal to the organization. These stakeholders are directly involved or affected by the business. Internal stakeholders include management, employees, investors, etc.
External stakeholders are external to the organization. These stakeholders are not directly involved with the business but are affected in some way by the business or its outcomes. External stakeholders include suppliers, government departments, external groups, users of the product, etc.
Stakeholder Vs Shareholder
A shareholder is a stakeholder who holds the stock of the company. They have a direct interest in the business and can be considered internal stakeholders.
A stakeholder is a more general term and includes anyone impacted by the business or has any kind of interest. Stakeholders can be internal or external to an organization.
Are Competitors Stakeholders?
No, competitors are not stakeholders. Although competitors are impacted by the business, the business has no intention of managing them. However, a business has to manage its stakeholders and keep them satisfied.
Examples of Stakeholders
A few examples of stakeholders are:
- Management
- Department heads
- Employees
- Supervisors
- Suppliers
- Investors
- Communities
- Unions
- Public groups
- Government
- End-users
Importance of Stakeholder
Businesses exist to earn profit or advance a public cause. In both cases, they must satisfy the buyer or the community. All these are stakeholders. Therefore, the goal of the business is to satisfy the needs of stakeholders.
If the stakeholders are satisfied, the business will succeed; otherwise, it will fail.
Summary
A stakeholder has interests in the business or is affected by it. A business must identify and manage its stakeholders to achieve success.