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12 min read

What are the types of stakeholder?

In this article, we’ll explore the different categories of stakeholders, including internal stakeholders like employees and shareholders, external stakeholders such as customers, suppliers, government agencies, and the community, as well as how to identify and prioritise their needs and expectations.

External vs internal stakeholders

Within a business or organisation, groups can have an interest and be impacted by the outcome without being directly involved within the business. Stakeholders can be split into two different types, internal and external.

Internal stakeholders are people who have an interest in the company due to a direct relationship, such as employment, ownership or investment. 

External stakeholders are people who do not directly work for the company but are impacted in some capacity by the outcome and actions of the business. Typically these will consist of groups such as public groups, suppliers and creditors.

Suppliers

Suppliers are the people or businesses that provide your business with goods and they rely on the revenue from the sale of the goods. The success of your business is important to them as if you are successful, you will look to purchase more goods from them. 

Customers

Customers are the people who buy business services or products, they expect the best quality for a fair price. As customers are the ones who make the purchase, they are interested in the performance of the business, they are also a very important stakeholder as they are required for a business to exist. 

Employees

Employees are impacted by the performance of a business or organisation as they are the ones who will pay their salaries. The better the performance of the company, the more opportunities they are likely to receive for growth, whether it be positional, salary or educational. 

Investors

Investors are people who will invest money into the organisation or business, they can range from the owner to people outside of the company, who are not directly involved. As an investor’s potential return is impacted by the performance of a company they have a great interest. Investors will also have access to information such as financial statements, alongside rights that allow them to be involved in large decisions that can impact them, the business and other stakeholders. 

Communities

Communities can be impacted by a business or organisation in many ways, if a business succeeds it provides the opportunity for more jobs and economic development. Businesses may also have ties with the local community in which they assist. The performance of a business to the community, allowing for growth opportunities that can be reinvested into the community makes them an indirect external stakeholder. 

Government

Governments are major stakeholders in a business, the performance of the business impacts the taxes from the business, employees and other spending from the company. The better a company performs the likelihood that they will pay more taxes increases. 

How to prioritise stakeholders

It can be difficult to rank stakeholders as they all interact and are impacted by your company differently. It is important to try to align stakeholders to make it as easy as possible as they will have the same requirements. 

However, there are instances where this may not be possible, for example, if an investor wants the company to cut costs, it may result in a lower-quality product or service being provided, which does not align with the customers’ interests.

There is no set way to prioritise stakeholders, the prioritisation is generally based on the stage of the company. New startups will often prioritise employees and customers as the main stakeholders, whereas a large corporation may be required to prioritise the shareholders and investors within the company. Although it is down to the company to decide what they think is most important if not all stakeholders are aligned. 

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