People often think of stakeholders as those who have a vested interest in the success of an organization. This is true, but there are many more types of stakeholders and they all need to be considered and understood.
Stakeholders play a major role in an organization or project. While some want to maximize profits, others may not care about the bottom line but will object if they feel their values are threatened by business practices. In this article, we explore the many stakeholders an organization is likely to encounter.
Who are the stakeholders
On a first level, stakeholders are those people or organizations that have a vested interest in the success of your business. Customers, employees, suppliers, and competitors all fall into this category.
Each group benefits from your enterprise’s continued prosperity and will likely speak on its behalf if it is threatened. When you think about stakeholders beyond this point, though, you soon realize that all sorts of people and organizations will be affected by your business or project.
Different types of stakeholders
Here are some of the main types of stakeholders
The customers who purchase your products or services are the stakeholders whose interests you must satisfy. It is important to remember that not all customers have the same expectations from a product, business model, service, etc., and care about different things. For example, there could be various types of customers for a telecom company: residential users, businesses, or individuals on prepaid services.
Employees also have a vested interest in the successful operations of an organization because that will increase their employment prospects. Employees are stakeholders who care about job security, pay, benefits, etc. Regrettably, they can also be a source of trouble for an organization if their interests are not being served.
Suppliers and vendors
Suppliers and vendors are the business partners that make your operations possible. You need to ensure that they stay in business and enjoy a good working relationship with you on mutually beneficial terms. Your company’s reputation is at stake, as well as its ability to function daily.
Regulators and legislators
Regulators and legislators primarily care about your organization’s activities from a legal standpoint. They want to ensure that you are operating within the limits of the law and will intervene if they feel your business is a threat to society, even in small ways.
Investors are another key group of stakeholders. They provide the funding that your organization needs to function and usually want to enjoy a return on their investment by receiving dividends or capital gains. If this is not possible, they may even withdraw their investments, which can be fatal for an enterprise if it does not have other sources of income.
Local community stakeholders care about the direct effects your business has on their locality. They want to be kept informed of any developments and will intervene if they feel these developments are detrimental to them in some way. For example, a chemical plant may cause air pollution. Citizens who live nearby will then push for its closure unless the company regulates the emissions according to the law.
Understanding stakeholders is vital to the success of your business. There are many types of stakeholders with different interests, and it pays to listen to them all. While you do not need to always give into each demand that they make, keeping your stakeholders happy will ensure the long-term profitability of your venture.