Types of stakeholders

From CEOpedia | Management online

Stakeholders-organizations or individuals who participate in the creation of a project (they actively participate in its implementation) or are directly interested in the results of its implementation. Stakeholders can influence an organization.

Internal stakeholders

Internal stakeholders - are those who control organization activities related to ownership (shareholders) or due to the position held in the organization (members of the board, managers, employees).

  • employees - persons who are responsible for the implementation of the project
  • shareholders and board of directors - thanks to the right to vote, have an influence on the organization. They do not interfere in the matters of running the organization, but derive income from their shares.
  • managers (line and staff)
  • families of employees

External stakeholders

External stakeholders (outsiders) include clients and suppliers and other groups outside the organization, but interested in his activity.

  • customers - various institutions and organizations such as: individuals, other businesses, schools, distributors and hospitals. Exchange cash for goods or services of the company.
  • suppliers - a person or organization that supply materials, raw materials and services for the company
  • service providers
  • resource providers
  • competitors (local and international)- competition motivates the company to improve its products or services to achieve better results.
  • environmental protection bodies
  • state authorities, local government - their role is to control the organization to ensure compliance with the principles of free market.
  • special interests groups
  • financial institutions (banks, insurance) - they provide funds for business development and project implementation
  • media (press, radio, TV), social media - they enable contact between external and internal market participants, help in disseminating information about the company's activities and project implementation.
  • trade unions, etc.

Degree of connection with the organization

  • First level stakeholders - these are natural persons or legal agreements with formal organization of contracts or agreements. Without their involvement, the company can not survive. Belong to this group, shareholders, employees, clients, suppliers, investors and the public sector: government and local communities.
  • Second level stakeholders - these are individuals or groups of people that can both influence the organization and stay under its influence, but without any transactions with her, what the organization can do without them. Belong to this group, the media and interest groups.

Forms of stakeholder commitment

Suitable identification of stakeholders enables them to be involved in the organization's activities. There are four main forms.

  • communication - the most common and simplest form of stakeholder engagement. It allows you to communicate about the functioning of the organization, undertaken initiatives for both internal and external stakeholders.
  • consultations - the aim is to get to know the opinions of stakeholders in the matter subject of consultations.
  • partnership - a form of creating relations with stakeholders, which requires from them the biggest commitment. It is usually long-lasting and demanding work with a lot of work.
  • dialogue - usually takes place during various advisory panels, stakeholder forums, summary meetings.

Examples of Types of stakeholders

  • Employees: Employees are often the most important stakeholders in an organization as they work directly with the project and are involved in its implementation. Employees can have an impact on the success of the project by providing feedback, making suggestions, and performing the tasks necessary to complete it.
  • Customers: Customers are also important stakeholders in a project as they are the ones who will benefit from its completion. Customers will have expectations of the project and need to be kept informed of its progress. By gathering feedback and making changes based on customer input, a project can be tailored to meet the needs of its customers.
  • Suppliers: Suppliers are also key stakeholders in a project as they are the ones who provide the necessary materials and services for the project. They need to be kept informed of the project's progress so they can adjust their delivery schedule if necessary.
  • Investors: Investors are also important stakeholders in a project as they are the ones providing the financial resources for the project. They need to be kept up to date on the progress of the project and any potential risks to ensure their investment is protected.
  • Government: Government bodies are also key stakeholders in a project as they can have regulatory or taxation implications for the project. They need to be consulted in order to ensure that the project complies with all relevant laws and regulations.

Advantages of Types of stakeholders

Having different types of stakeholders involved in a project is beneficial as it ensures a comprehensive understanding of the project, helps to identify potential risks and opportunities, and increases the likelihood that the project will be successful. The specific advantages of different types of stakeholders include:

  • Customers: Customers can provide valuable insight into customer needs, preferences, and expectations, allowing the project team to create a product that is better tailored to their needs.
  • Suppliers: Suppliers can provide information on materials, pricing, and availability of resources needed for the project.
  • Employees: Employees can provide input on the project and help to identify potential problems and solutions.
  • Investors: Investors can provide financial resources and help to secure additional funding for the project.
  • Government: Government agencies can provide resources, regulations, and support for the project.
  • Community: Community groups can provide input on the project and help to ensure that it is beneficial to the local community.
  • Media: Media outlets can help to spread the word about the project and its progress.

Limitations of Types of stakeholders

There are several limitations to the types of stakeholders:

  • Stakeholders may not have sufficient resources to make a meaningful contribution to the project.
  • Stakeholders may have conflicting interests, which can lead to disagreements during the project.
  • Stakeholders may not have adequate knowledge or expertise to make an informed contribution to the project.
  • Stakeholders may not be available to participate in the project due to other commitments.
  • Stakeholders may not have sufficient authority to make decisions or take action on behalf of the project.
  • Stakeholders may not have sufficient incentive to actively participate in the project.
  • Stakeholders may not have a clear understanding of the project goals and objectives.

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Author: Marta Bodzioch