Imagine starting your own cloud kitchen. You’ll need to identify people who will supply you with ingredients, takeout containers and do doorstep delivery. By doing so, you will recognize multiple stakeholders who would be instrumental in setting up your business.

Every project involves various types of stakeholders at any given point. Read on to know how different stakeholders influence and impact organizations.

Who Is A Stakeholder?

A stakeholder is an individual or group of people interested and involved in any decision or activity of an organization. Stakeholders are interested in the success of a project and are impacted by its outcome. For example, the different types of stakeholders you engage with—potential customers, business managers and vendors—are crucial to a business’s success.

Stakeholders can impact business success through:

  • Sharing feedback on decisions and workflow

  • Providing continued loyalty and participation

  • Increasing or decreasing financial investment

Types Of Stakeholders

Stakeholders have a lot of power, and they can even decide if there should be a project or not. It’s because of the amount of power a stakeholder wields that businesses need to prioritize their requirements. Let’s look at the two primary types of stakeholders in a business:

Internal Stakeholders

An internal stakeholder is someone who is directly a part of an organization’s operations. They’re directly affected by a project and include:

  1. Employees

They’re the building blocks of an organization. They contribute to daily operations in exchange for compensation, training, benefits and professional development. They invest their time and effort to drive business goals and build on an organization’s mission and vision. Employee satisfaction is extremely important as it impacts the overall output. Employee feedback is an excellent tool for gauging someone’s needs and expectations from their roles.

  1. Managers

Managers are responsible for supervising and guiding employees. They make sure that their team has the necessary resources and direction for performing tasks. Delegation of authority is a common strategy used by managers to entrust responsibilities to their teams. They’re primarily responsible for strategizing and motivating everybody towards achieving business goals. There are various types of managers responsible for an organization’s success.

  • Senior Managers: 

They delegate responsibilities to middle-level and junior managers. For example, the board of directors.

  • Middle Managers: 

They execute strategies made by the senior management and help their teams drive those decisions. For example, department managers.

  • Junior Managers: 

They execute plans and distribute tasks to frontline employees who report to them. For example, frontline managers.

  1. Owners

They’re the first set of stakeholders in any business. They usually have exclusive rights and full ownership over products and services that impact the customers. They set out strategies to meet and exceed goals and ensure the smooth functioning of an organization. They’re often directly responsible for a company’s success.

External Stakeholders

Those who don’t belong to an organization but influence or are impacted by the outcomes are external stakeholders. In other words, they have an interest in the business but don’t have a direct affiliation with projects. They often include:

  1. Customers

Businesses exist because of customers. They’re the ones who purchase or consume goods and services and drive the revenue and/or profits. Typically, sales, marketing, public relations and overall strategies are directed towards increasing customer satisfaction. A happy customer is likely to promote your product through word of mouth. Organizations should, therefore, make conscious efforts to meet customers’ needs and expectations.

  1. Governments

In some way or the other, every organization falls within the ambit of government agencies. Governments take taxes out of a company’s revenue. Additionally, they enforce labor laws and set regulations to protect customers. Inadequate compliance and reporting can result in penalties. Businesses should follow certain rules and regulations and build a positive relationship with the government.

  1. Competitors

There are various players in the market who provide similar products and services to your organization. In other words, they compete for similar opportunities within the same market. Competitors motivate businesses to develop or improve products and services. However, there may be times when there are conflicts and organizations should find an efficient way to navigate them.

In any organization, projects don’t exist in isolation. They always exist in an environment that is influenced by various types of stakeholders who are interested in the outcome. To successfully work and engage your external stakeholders, you need to evaluate internal stakeholders. Harappa Education’s Navigating Workplaces course will teach you how to understand your workplace culture and relationships better. The Stakeholder Map, in particular, will help you identify decision-makers and prioritize stakeholders. You can collaborate better when you understand them better. Coming together is the first step to success.


Explore topics such as Stakeholder ManagementStakeholder AnalysisWhat is AccountabilityTypes of Accountability & Difference Between Accountability and Responsibility from our Harappa Diaries section and engage with stakeholders effectively.

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