Comparison of Stakeholders and Shareholders

What is a Stakeholder?

A stakeholder is any individual or organisation that has a vested interest in the activities and decision-making of a business

What are the features of a stakeholder?

• Have an interest in the business- but do not own it

• May work for (employees) or otherwise transact with the business

What are the features of shareholders?

• Own a business

• May also work in the business

• Benefit directly from increases in the value of the business

What are the internal stakeholder?

They are closely connected to the organisation and their needs are likely to have a strong influence on an organisation

What are the examples of internal stakeholders?

• Owners

• Shareholders

• Employees

• Managers

• Trade union representatives

• Members of work councils

What are external stakeholder?

• They have diverse needs and varying levels of influence on an organisation’s ability to. meet its objectives

• Even though they are external to the organisation they still have a contractual relationship

• They are sometimes known as ‘connected stakeholders’

What are the examples of external stakeholders?

• Customers

• Competitors

• Suppliers

• Central and local government agencies and regulators

• Pressure groups

• Investors

• Bankers

• Creditors

• Professional and Trade associations

• The local community

• The media

What are primary stakeholders?

• Those who are directly involved and affected, either positively or negatively, by an organisation’s actions

• These people will have the power to influence and shape decisions

What are secondary stakeholders?

• They are the ‘intermediaries’ so the persons or organisations who are indirectly affected by an organisation’s actions

• These people will have the power to influence and shape decisions

What are key stakeholders?

They can either be primary or secondary stakeholders but will have significant influence upon, or within, an organisation