What is a stakeholder?

A stakeholder is anyone that has a vested interest in an organization’s activities. Any individual or group that depends on the organization to fulfill their own goals and in turn that the organization depends on are considered stakeholders.

There are many different aspects that are considered as having an interest in a business. These are as follows:

1.) Profits paid as common stock dividends
2.) Loan repayments that a lending institution seeks to receive
3.) Sales to the company or purchases made from the company
4.) Wages paid to employees
5.) Community well-being
6.) A special-interest topic

When it comes to important corporate decisions it is important for the company to take into consideration the expectations that their different stakeholders have. Therefore, the importance of stakeholder management does not solely concern itself with day to day business. However, it is more important for long term corporate strategic decisions.
It is important to know that there is not just one type of stakeholder. There are two groups that the various types of stakeholders are divided into. These groups are known as internal and external stakeholders.

Internal Stakeholders:
· Managers
· Employees
· Shareholders

External Stakeholders:
· Suppliers
· Local Community
· Distributors
· Customers
· Unions
· Society
· Government
· Special interest groups


Some company executives tend to disregard the internal stakeholders and lean their focus toward keeping the external stakeholders happy. However, this is not a smart decision. Employees in a company can either make or break the reputation. Word of mouth communication between employees to outside sources can damage the reputation of a business if the comments are mostly negative. To solve this dilemma it is important to keep employees up to date on what is going on within the company. It is also important to keep other internal stakeholders up to date, such as the shareholders in the company. If they have an investment in the business, they deserve to know what the state of the company is. It is simple to keep them up to date by simply telling them what the company is trying to achieve and the measures that they are taking to do so.

It is hard for a company to manage the way that the external stakeholders view the company. However this is not impossible. The company must have a good public relations department in order to reflect a positive image to the external stakeholders. This is the way to give outside interests, especially customers, a reason to see the company in a good light.

There are also various categories of stakeholders that have different levels of importance within the organization.

Primary Stakeholders: A group that the company cannot function properly without. Example: Customers, suppliers, etc.

Secondary Stakeholders: A group that the company can still exist without involvement. Example: the community.

Active stakeholders: Stakeholders that participate in the organization's activities. Example: Managers, employees, and pressure groups.

Passive Stakeholders: Stakeholders that do not normally seek to participate in the organization's activities and policies. Example: Most shareholders, government and community.

1.) Kenneth E. Clow and Donald Baack, (2010) "Intergrated Advertising, Promotion, and Marketing Communications", Fourth Edition, Prentice Hall Upper Saddle River
2.) Stakeholder Management. (2001). http://www.themanager.org/resources/Stakeholder%20Management.htm
3.) Stakeholders – Interest and Power. (2010). http://tutor2u.net/business/strategy/stakeholders-interests-and-power.html