Eleanor Finch
Stakeholders are individuals, groups, or organizations with a vested interest in a business or project's outcomes. They are indispensable in shaping outcomes, influencing priorities, and determining overall project success. There are two main types of stakeholders: primary and secondary. Primary stakeholders are those who are directly impacted by a project or initiative and have a fundamental interest in it. They can be internal or external to the organization. Internal primary stakeholders include employees, owners, investors, and managers, while external primary stakeholders include customers, suppliers, and communities. Identifying and managing stakeholders effectively is crucial for project success and can help foster collaboration and build relationships that drive real, lasting impact.
| Characteristics | Values |
|---|---|
| Type of interest | Direct |
| Level of involvement | High |
| Nature of participation | Fundamental |
| Type of impact | Positive or negative |
| Type of stakeholder | Internal |
| Examples | Employees, investors, owners, directors, managers |
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What You'll Learn
- Internal stakeholders are directly impacted by a company's operations
- External stakeholders are indirectly affected by a company's decisions and outcomes
- Primary stakeholders are those with a fundamental interest in a project
- Secondary stakeholders are less directly affected but may exert influence
- Stakeholders can be broadly categorised into internal and external
Internal stakeholders are directly impacted by a company's operations
Internal stakeholders are individuals, groups, or organisations with a direct interest or influence in a company, as all the processes and results of the company's operations also affect them. They are also known as primary stakeholders. They are people within the organisation who are directly involved in business processes and outcomes.
Internal stakeholders can include employees, project managers, boards of directors, donors, and investors. They have a direct stake and an important role in the company's or project's success. Their interest in the company comes through a direct relationship, such as employment, ownership, or investment.
Different internal stakeholders have different roles and priorities. For example, investors prioritise profits, while employees focus on job quality and conditions. Owners are often the founders and visionaries behind an organisation, with their influence on decision-making varying, but their interest in the organisation's success is foundational.
Internal stakeholders can also be classified as primary or secondary, depending on their level of engagement and influence. Primary stakeholders are those who experience a direct impact from a project or initiative. They have a fundamental interest in the project and are directly impacted, either positively or negatively, by its outcomes.
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External stakeholders are indirectly affected by a company's decisions and outcomes
Primary stakeholders are those who are directly impacted by a company's operations and can include employees, owners, investors, and customers. Secondary stakeholders, on the other hand, are indirectly affected but may still exert influence or experience consequences. They include advocacy groups, media outlets, and regulatory bodies.
External stakeholders are individuals or groups outside of a company who are indirectly affected by its decisions and outcomes. They do not have a direct relationship with the company but may still be affected by its operations. External stakeholders include customers, suppliers, government agencies, creditors, labour unions, and community groups.
The interests of external stakeholders may not always align with those of the company, and they may even be in direct conflict. For example, a company's decision to cut labour costs to maximise profits may upset its employees. Effective stakeholder engagement involves understanding and managing the diverse interests of external stakeholders, which is critical for project success and can lead to mutually beneficial collaborations.
External stakeholders can be further categorised into secondary and key stakeholders. Secondary stakeholders have an indirect relationship with the company, often through social investments or business relationships. They may include advocacy groups, media outlets, and regulatory bodies. Key stakeholders, on the other hand, have high influence and interest in the company and its projects. They are critical to the success of an initiative and require active, ongoing management.
In conclusion, external stakeholders play an important role in a company's operations, even though they are indirectly affected by its decisions. Effective identification and engagement with external stakeholders are crucial for project success and can lead to positive outcomes for both the company and its stakeholders.
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Primary stakeholders are those with a fundamental interest in a project
Stakeholders are individuals, groups, or organisations that can affect or be affected by the execution and completion of a project. They are indispensable in shaping outcomes, influencing priorities, and determining overall project success. They can be broadly categorised into two types: internal stakeholders and external stakeholders.
Internal stakeholders are those within a company whose interest stems from direct employment, ownership, or investment. They are also referred to as primary stakeholders and have a fundamental interest in the project. They are directly impacted by the company's operations and include employees, project managers, boards of directors, donors, and investors.
External stakeholders, on the other hand, are outside the company and are indirectly affected by its decisions and outcomes. They are also referred to as secondary stakeholders and include customers, suppliers, government agencies, creditors, labour unions, and community groups.
Secondary stakeholders, on the other hand, are less directly affected but may still exert influence or experience consequences as a result of the project. Advocacy groups, media outlets, and certain regulatory bodies are examples of secondary stakeholders. Although their connection is less immediate, their interests must still be acknowledged and managed appropriately.
It is important to identify and respond to the concerns of both primary and secondary stakeholders to increase the chances of project success and ensure community support.
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Secondary stakeholders are less directly affected but may exert influence
While primary stakeholders are those who are directly impacted by a project or organisation, secondary stakeholders are those who are indirectly affected. However, despite their less direct involvement, secondary stakeholders may still exert influence and experience consequences as a result of a project or organisation's activities.
Secondary stakeholders often have an interest in a company but lack direct influence over its decisions. They are often referred to as external stakeholders, as they are outside of the company and are indirectly affected by its decisions and outcomes. Examples of secondary stakeholders include customers, local communities, creditors, advocacy groups, media outlets, and certain regulatory bodies.
The interests of secondary stakeholders must be acknowledged and managed appropriately. For instance, in the context of a company, secondary stakeholders may include local communities that are indirectly impacted by business activities. Understanding and engaging with these stakeholders is crucial for fostering collaboration and building relationships that drive real, lasting impact.
In the case of a project, secondary stakeholders may be those who are only tangentially involved but still have an interest in its success. They can provide support and contribute to the project's effectiveness. By involving secondary stakeholders and responding to their concerns, a project is more likely to gain the community support and focus needed to succeed.
Additionally, secondary stakeholders may exert influence through their power and interest in a project. High power, high-interest secondary stakeholders require active, ongoing management. Identifying and prioritising engagement with these stakeholders is essential for effective stakeholder management and can contribute to the overall success of the project.
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Stakeholders can be broadly categorised into internal and external
Stakeholders are individuals, groups, or organisations with an interest in a business or project's outcomes. They are indispensable in shaping outcomes, influencing priorities, and determining overall project success. Stakeholders can be broadly categorised into internal and external stakeholders.
Internal stakeholders are individuals or groups with a direct interest or influence in a company, as they are directly impacted by the company's operations. They are part of the organisation and are actively involved in the project or directly affected by its success. This includes employees, owners, investors, project managers, boards of directors, and donors.
External stakeholders are entities outside the immediate organisational structure that have an interest in the project's execution and results. They do not directly work for or with a company but are affected by its actions and outcomes. External stakeholders include customers, suppliers, government agencies, creditors, labour unions, and community groups.
Both internal and external stakeholders can be further classified as primary or secondary stakeholders. Primary stakeholders have a fundamental interest in the project and are directly impacted by its outcomes. They experience a direct impact, either positive or negative, from the actions of an organisation or project. Secondary stakeholders, on the other hand, are less directly affected but may still exert influence or experience consequences. They are indirectly impacted, often through social investments or business relationships.
It is important to identify and respond to stakeholders' concerns to increase the chances of project success and gain the necessary community support. Effective stakeholder engagement involves mapping and analysing stakeholders, categorising them by influence and interest, and creating a stakeholder engagement plan. This ensures targeted communication strategies and better alignment between stakeholder expectations and project goals.
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Frequently asked questions
Primary stakeholders are individuals or groups with a fundamental interest in a project or company and are directly impacted by its outcomes. They can be internal or external.
Examples of primary stakeholders include employees, clients, business partners, investors, owners, and managers.
Secondary stakeholders are indirectly affected by a project or company and may have less influence on its decisions. Examples include customers, media outlets, and regulatory bodies.
