Internal and external stakeholder

Internal and external stakeholder
See also
Stakeholders influence Primary and secondary stakeholder Stakeholders environment Role of stakeholder Organizational effect Stakeholder management strategies Managerial decision making Project sponsor role Manager and employee

Internal stakeholders are project team members, sponsors, managers, and other individuals within the organization who are directly involved in the project, and are impacted by the project's success or failure. They can be from any department, such as finance, sales, marketing, or operations.

External stakeholders are individuals or organizations outside of the organization who have a vested interest in the project's success or failure. They can include customers, vendors, suppliers, government agencies, financial institutions, and other companies involved in the project. They can also include special interest groups, the media, and the general public.

Example of internal and external stakeholder

• Internal stakeholders:

1. Project Team: This includes the project manager, project team members, and any other internal personnel involved in the project.
2. Sponsor: The sponsor is the internal individual or group responsible for providing the financial and/or moral support for the project.
3. Management: Managers from various departments who are involved in the project, and can provide support or guidance.
4. Finance: The internal financial department responsible for allocating resources to the project.

• External stakeholders:

1. Customers: The customers who will be using the final product or service of the project.
2. Vendors: Vendors who are supplying materials or services to the project.
3. Suppliers: Suppliers who are providing resources or components to the project.
4. Government Agencies: Government agencies that may be affected by the project.
5. Financial Institutions: Banks or other financial institutions providing funding for the project.
6. Other Companies: Other companies that may be impacted by the project, such as competitors or partners.
7. Special Interest Groups: Any special interest groups that may be affected by the project.
8. The Media: The media outlets that may be providing coverage of the project.
9. The General Public: The general public who may be impacted by the project.

Types of internal and external stakeholder

Internal stakeholders include project team members, sponsors, managers, and other individuals within the organization who are directly involved in the project and are impacted by the project's success or failure. External stakeholders include customers, vendors, suppliers, government agencies, financial institutions, and other companies involved in the project. They can also include special interest groups, the media, and the general public.

• Project team members – These are the individuals, from any department, who are responsible for completing the tasks necessary for the successful completion of the project.
• Sponsors – These are individuals or organizations that provide resources, such as financial or other assistance, to support the project.
• Managers – These are the individuals who are responsible for overseeing the project and ensuring that it is completed on time and within budget.
• Customers – These are the individuals or organizations that will be using the product or service that is being developed by the project.
• Vendors – These are the individuals or organizations that supply goods or services to the project.
• Suppliers – These are the individuals or organizations that provide raw materials or other resources to the project.
• Government agencies – These are government organizations that may be involved in the project and have an interest in the project's outcomes.
• Financial institutions – These are financial organizations that may provide loan or investment capital for the project.
• Other companies – These are other businesses that may be involved in the project, directly or indirectly.
• Special interest groups – These are groups of people who have a specific interest in the project, such as environmental groups or consumer advocates.
• Media – These are the news outlets, such as newspapers, television, or radio, that report on the project or its outcomes.
• General public – These are the members of the public who may be impacted by the project or who have an interest in the project's outcome.

Steps of managing internal and external stakeholder

Internal and external stakeholders are integral to project success. Here are the steps for working with both types of stakeholders:

• Identify Stakeholders: Identify all stakeholders, both internal and external, who need to be involved in the project. This includes determining the level of influence each stakeholder has on the project.
• Engage Stakeholders: Establish relationships with each stakeholder and engage them in a dialogue about their interests in the project.
• Gather Requirements: Work with stakeholders to understand their requirements and expectations for the project.
• Communicate Progress: Communicate progress on the project with stakeholders in a timely manner.
• Resolve Issues: Identify and resolve any issues that arise with stakeholders during the project.
• Gain Support: Gain support from stakeholders for the project by showing them how it will benefit them.
• Ensure Satisfaction: Ensure that stakeholders are satisfied with the outcome of the project.

Advantages of internal and external stakeholder

The advantages of internal and external stakeholders are numerous. They include:

• For internal stakeholders, improved communication and collaboration between departments, better access to resources, and improved morale due to a sense of ownership in the project.
• For external stakeholders, the ability to provide feedback and input on the project, access to resources and expertise, and a greater understanding of the project and its potential impacts. This can lead to improved relationships with customers, vendors, and other outside organizations.

Limitations of internal and external stakeholder

Internal and external stakeholders are important for the success of a project, however, there are certain limitations to consider.

• Internal stakeholders can be limited by their knowledge or the resources available to them, which can limit their ability to contribute effectively.
• External stakeholders may be less familiar with the organization and its objectives, which can make it difficult for them to provide meaningful input.
• External stakeholders may not have the same level of commitment as internal stakeholders, which can lead to a lack of accountability.
• Internal stakeholders may have conflicting objectives or interests, which can lead to communication breakdowns and disagreements.
• External stakeholders may have difficulty understanding the project's goals, objectives, and timeline, which can limit their ability to provide meaningful feedback.
• External stakeholders may not have the same level of access to information as internal stakeholders, which can lead to misunderstandings and misinformation.

Suggested literature

• Mazur, A. K., & Pisarski, A. (2015). Major project managers' internal and external stakeholder relationships: The development and validation of measurement scales. International Journal of Project Management, 33(8), 1680-1691.
• Hall, K. R., Harrison, D. E., & Obilo, O. O. (2021). Building positive internal and external stakeholder perceptions through Csr storytelling. Journal of Strategic Marketing, 1-22.