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

Difference between Stakeholders and Shareholders:

Stakeholders:

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

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

Shareholders:

• Own a business

• May also work in the business

• Benefit directly from increases in the value of the business

Internal stakeholders:

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

Examples of internal stakeholders:

• Owners

• Shareholders

• Employees

• Managers

• Trade union representatives

• Members of work councils

External stakeholders:

• 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’

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

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

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

Key stakeholders:

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