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  • What Is a Stakeholder in Business – Definition & Examples

What Is a Stakeholder in Business – Definition & Examples

The holders of each type of interest in the affairs of the corporation are called a constituency, so there may be a shareholder district, an adjacent landowners` district, a bank district to which the company owes money, etc. In this use, “constituent” is synonymous with “stakeholder”. [10] In stakeholder theory, companies should not focus solely on accountability to shareholders. They must also respect all stakeholders and their interests in the company. External stakeholders are those who do not work directly with a company, but are somehow affected by the company`s actions and results. Suppliers, creditors and public groups are all considered external stakeholders. Stakeholder analysis is generally considered a highly confidential document because it often contains sensitive information. Governments are interested in business development, decision-making and business because they affect tax revenues, the common good and environmental sustainability. They want companies to pay taxes, comply with laws and regulations, adopt reasonable employment practices, have honest relations and legality, do not generate negative externalities and practice fair competition.

In addition, they also address the well-being of society, including those related to employment and income affected by business activities. A stakeholder is a person or group that has a legitimate interest in a business, organization or business; The Stanford Research Institute defines stakeholders as “the groups without whose support the organization would cease to exist. Stakeholders can influence or be affected by a company`s actions (or omissions), and they can exist both inside and outside a company. Local communities and the general public provide workers to businesses. When people are well educated and skilled, they provide a high-quality workforce that impacts many aspects of the business, such as productivity, efficiency, and innovation. The relationships of external stakeholders with companies are a little more difficult to identify and complex. This is because many parties with different interests are involved. Take, for example, the government. It refers to national and local governments, central banks and many institutions under the government. Stakeholders may include suppliers, internal employees, members, customers (including shareholders, investors and consumers), regulators and local and regional communities.

In addition, stakeholders may include buyers, customers, owners and non-governmental organizations (NGOs). Stakeholder assessments will help create an effective communication plan that identifies the different information needs for each group. For example, stakeholders in the upper right quadrant of each stage of Figure 1 have the largest share of the project and have the greatest power to influence project outcomes. Therefore, the project team should try to build buy-in through targeted communication. Companies often struggle to prioritize stakeholders and their competing interests. When stakeholders are aligned, the process is simple. In many cases, however, they do not have the same interests. For example, if shareholders put pressure on the company to cut costs, it can lay off employees or lower their wages, which is a difficult compromise. Stakeholder analysis is defined as a tool that organizations can use to clearly identify key stakeholders in a project or other activity, understand where stakeholders stand, and develop collaboration between stakeholders and the project team. The main objective is to ensure the success of the project or future changes.

Investors include both shareholders and debtors. Shareholders invest capital in the company and expect to get some return on the invested capital. Investors often deal with the concept of Shareholder ValueShareholder ValueShareholder Value is the financial value that the owners of a company receive for owning shares of the company. An increase in shareholder value is created. This group includes all other investors, such as.B. lendersTop Banks in the U.S. According to the U.S. Federal Deposit Insurance Corporation, there were 6,799 FDIC-insured commercial banks in the U.S. as of February 2014. and potential buyers. All shareholders are inherently stakeholders, but stakeholders are not shareholders by nature. Unlike internal stakeholders, external stakeholders do not have a direct relationship with the company.

Instead, an external stakeholder is usually a person or organization affected by the company`s operations. For example, if a company exceeds the allowable carbon emission limit, the city where it is located will be considered an external stakeholder because it will be affected by the increase in pollution. The answer to any of these questions can determine whether an individual or group is a stakeholder. Table 1 presents a matrix in which the most important stakeholders and their levels of importance or influence are identified. Table 2 provides an example of a detailed stakeholder analysis that contains sensitive information. To identify who might be a stakeholder, section 5.3.2 of ISO 26000 suggests that an organization should ask the following questions: A stakeholder is a party that has an interest in a company and can influence or be affected by the company. The most important stakeholders of a typical company are its investors, employees, customers and suppliers. To learn more about Jack Mas` stakeholder priorities, click here. This guide analyzes the most common types of stakeholders and examines the unique needs of each of them. The goal is to put yourself in the shoes of each type of stakeholder and see things from their point of view.

The interests of different stakeholders are not always coherent and often even contradictory. .