What are stakeholders?
Stakeholders are people, organisations or groups in the community that have an interest in a business. They can have an impact on the business, or the business could have an impact on them. These could include the owners of the business, customers, the government, suppliers, distributors, employees, community groups, pressure groups, managers and shareholders.
The difference between internal and external stakeholders:
Internal stakeholders
Internal stakeholders are those that belong to the business, in other words, inside the business.
- Owners: The people who started the business.
- Managers: The people who are responsible for the people and the operations of the business.
- Employees: The people who are paid a salary or wage to work at the business.
External stakeholders
External stakeholders are those that do not belong directly to the business, they are outside of the business.
- Customers: People who buy products or services from the business.
- Suppliers: Other businesses that sell raw materials, components, of inventory to another business.
- Distributors: A person, agent, or business that sells (distributes) products onwards to retailers (shops).
- The government: The group of people within the organisation that governs a country.
- Lenders and creditors: People or organisations that lend money to businesses.
- The local community: The group of people living in the area where the business operates.
- Pressure groups: Groups of people who try to influence other people, businesses or the government to do what they want.
Please note: Some textbooks classify shareholders as external stakeholders, whereas others define them as internal. Check with your teacher on the classification for the exam you are taking.
Video: Who are the stakeholders?
Watch both videos about Vattenfall, an energy company focused on producing sustainable and renewable energy, as it expands operations in the UK. Answer the questions after each video.
Who are Vattenfall’s stakeholders as they build the South Kyle Windfarm in South West Scotland?
Create communications, a communications agency in Ayrshire (liason agency for Vattenfall), local people, local communities, local school children, community councils and local authorities (government agencies)
How has Vattenfall impacted the Ayrshire community?
Engagement in the community, providing local investment funds, creating jobs for local people.
Who are Vattenhall’s stakeholders in this video?
The port of Ayr, the local community
How has the Port of Ayr been impacted by Vattenhall?
It has been able to make more money as the wind turbines are being shipped through the port. Positive economic impact as local contractors stay in local hotels, people coming on site visit local shops
