What Is a Stakeholder? Definitions, Types & Examples

Understanding stakeholders is essential for any organisation aiming to achieve long-term success. Whether you’re managing a project, running a business, or leading a team, knowing who your stakeholders are and how to engage them effectively can make the difference between success and failure. This comprehensive guide explores everything you need to know about stakeholders, from basic definitions to practical management strategies.

What Is a Stakeholder?

A stakeholder is any person, group, or organisation that has an interest in your business or project. They can either affect your project’s outcome or be affected by it. Stakeholders include a wide range of parties, from employees and customers to suppliers, investors, and even local communities.

The term “stakeholder” comes from the idea that these individuals or groups have a “stake” in what happens. Their support is often crucial for success. Unlike passive observers, stakeholders actively influence decisions or experience the consequences of those decisions.​

Think of stakeholders as anyone who cares about what you’re doing. They might work inside your organisation, or they might be external parties watching from outside. Either way, their opinions, needs, and expectations matter to your project’s success.​

Stakeholder vs. Shareholder

Many people confuse stakeholders with shareholders, but these terms have distinct meanings. Understanding the difference is vital for effective business management.

A shareholder is someone who owns shares in a company. They have a financial investment and legal ownership rights. Shareholders focus primarily on profits and returns on their investment. They can vote on company decisions and receive dividends when the business performs well.

In contrast, stakeholders represent a broader group. All shareholders are stakeholders, but not all stakeholders are shareholders. Stakeholders include anyone affected by the company’s actions—employees seeking fair wages, customers wanting quality products, suppliers expecting timely payments, and communities impacted by business operations.

The key differences include:

• Ownership: Shareholders own equity in the company; stakeholders may not own anything
• Focus: Shareholders prioritise financial returns; stakeholders care about various outcomes including social and environmental impact
• Rights: Shareholders have voting rights; stakeholders generally do not
• Relationship: Shareholders can sell their shares easily; stakeholders often cannot simply walk away from their connection to the organisation

These distinctions matter because they shape how organisations balance different interests. Modern businesses increasingly recognise their responsibility to all stakeholders, not just shareholders.

Types of Stakeholders: Internal vs External Stakeholders

Stakeholders fall into two main categories: internal and external. Each group has different relationships with your organisation and requires distinct engagement approaches.

Internal Stakeholders

Internal stakeholders exist within your organisation. They work for or have direct ownership in the business. Their daily lives connect closely to the organisation’s performance and decisions.

Common internal stakeholders include:

• Employees: Staff members at all levels who rely on the organisation for employment and income
• Managers and executives: Leaders who make strategic decisions and guide the organisation
• Owners and shareholders: Individuals who have invested capital and expect returns
• Board of directors: People responsible for governance and major policy decisions
• Project team members: Staff working directly on specific initiatives

Internal stakeholders typically have high influence over projects. They participate in planning, execution, and monitoring. Their interests often focus on job security, career development, fair compensation, and organisational success.

Communication with internal stakeholders tends to be frequent and informal. Teams work together daily, sharing information through emails, meetings, and collaboration tools. This close working relationship means internal stakeholders understand organisational processes and challenges intimately.

External Stakeholders

External stakeholders operate outside your organisation but still have significant interest in its activities and outcomes. They don’t work for the business, yet they’re affected by what the organisation does.

External stakeholders include:

• Customers: People who purchase and use your products or services
• Suppliers: Companies providing materials, resources, or services you need
• Investors and creditors: Financial institutions or individuals providing capital
• Government agencies: Regulatory bodies ensuring compliance with laws
• Local communities: Residents and groups in areas where you operate
• Trade unions: Organisations representing worker interests
• Media: Journalists and outlets covering your organisation
• Competitors: Other businesses in your market

External stakeholders influence projects through purchasing decisions, regulations, public opinion, and market conditions. Their impact can be powerful even without direct operational control.

Communication with external stakeholders is typically more formal and less frequent. Updates might come through reports, press releases, customer service channels, or public meetings. You need to manage what information you share and how you share it carefully.​

The distinction between internal and external stakeholders helps you develop appropriate engagement strategies. Strategies for engaging with stakeholders and attracting new investors require understanding these differences and tailoring your approach accordingly.

Primary and Secondary Stakeholders

Beyond the internal-external split, stakeholders can also be categorised as primary or secondary based on their level of involvement.

• Primary stakeholders experience direct impact from your project. They actively contribute and have the highest interest in outcomes. Examples include customers, employees, investors, and suppliers. These stakeholders are essential for project success.
• Secondary stakeholders help complete projects but at a lower level. They might assist with administrative tasks, financial matters, or legal compliance. Their interest and involvement are less direct but still important.​

Stakeholder Examples

Understanding stakeholders becomes clearer with real examples. Let’s explore how different stakeholders interact with organisations across various contexts.

Business Stakeholders

In a typical business, stakeholders include:

• Employees: A marketing manager wants career growth opportunities and fair pay
• Customers: A regular buyer expects quality products and excellent service
• Suppliers: A materials provider needs reliable orders and prompt payment
• Investors: A venture capital firm seeks strong financial returns
• Local community: Residents want the business to create jobs whilst minimising environmental impact

Project Stakeholders

When managing a project, stakeholders might be:

• Project sponsor: The executive funding the initiative and expecting specific results
• Project manager: The person responsible for planning and execution
• Project team: Staff members completing tasks and deliverables
• End users: People who will use the project’s final product or service
• Regulatory bodies: Agencies ensuring the project meets legal requirements

Healthcare Stakeholders

In healthcare settings, stakeholders include:

• Patients: Individuals receiving medical care and treatment
• Doctors and nurses: Medical professionals providing services
• Hospitals and clinics: Facilities delivering healthcare
• Suppliers: Companies providing medical equipment and pharmaceuticals
• Government health departments: Agencies regulating healthcare standards
• Insurance companies: Organisations paying for medical services​

These examples show how stakeholders vary by industry and context. Identifying your specific stakeholders is the first step in effective management.

How to Manage Project Stakeholders

Managing stakeholders effectively requires systematic processes and ongoing attention. Here’s how to approach stakeholder management throughout your project lifecycle.

Step 1: Identify Your Stakeholders

Begin by creating a comprehensive list of everyone who might influence or be influenced by your project. Use multiple methods to ensure you don’t miss anyone important:

• Review project documentation such as the project charter and business case
• Brainstorm with your team about potential stakeholders
• Consider both obvious and less apparent parties
• Think about who gains from success and who might oppose the project
• Look at similar past projects to identify stakeholder patterns

Ask key questions:

• Who are the project shareholders?
• Who is involved directly or indirectly?
• Who provides resources or approvals?
• Who might be affected by outcomes?
• Who can block or accelerate progress?​

Step 2: Analyse Stakeholder Power and Interest

Once identified, assess each stakeholder’s level of power (ability to influence) and interest (concern about the project). This analysis helps you prioritise engagement efforts.

The power-interest grid divides stakeholders into four categories:

• High power, high interest: Closely manage these key players with regular updates and involvement in decisions
• High power, low interest: Keep these stakeholders satisfied with periodic updates; handle them carefully
• Low power, high interest: Keep these stakeholders informed and engaged; they can become advocates
• Low power, low interest: Monitor these stakeholders with minimal engagement

Step 3: Create a Stakeholder Register

Document all stakeholder information in a stakeholder register. This central repository should include:

• Name and contact details
• Role and organisation
• Stakeholder type (internal/external, primary/secondary)
• Level of influence and interest
• Expectations and concerns
• Preferred communication methods
• Communication frequency
• Any special requirements

Update your stakeholder register throughout the project as circumstances change.

Step 4: Develop an Engagement Plan

Create specific strategies for engaging each stakeholder group. Your plan should outline:

• Communication goals for each stakeholder
• Methods of communication (email, meetings, reports)
• Frequency of updates (weekly, monthly, as needed)
• Type of information to share
• Who is responsible for communication
• How you’ll collect and use feedback

Tailor your approach to each stakeholder’s needs and preferences. What works for internal teams won’t work for external customers or regulators.

Step 5: Engage Throughout the Project

Involve stakeholders from beginning to end. Early engagement builds buy-in and prevents surprises later. Regular communication maintains alignment and trust.

Effective engagement includes:

• Sharing progress updates transparently
• Listening actively to concerns and feedback
• Involving stakeholders in relevant decisions
• Addressing issues promptly
• Celebrating milestones together

Building ESG marketing sustainable relation between business and stakeholders requires ongoing commitment to these engagement principles.

Step 6: Monitor and Adjust

Stakeholder management isn’t a one-time activity. Continuously monitor stakeholder satisfaction and adjust your approach as needed.

Regular monitoring helps you:

• Identify emerging issues before they escalate
• Recognise changes in stakeholder influence or interest
• Adapt communication strategies that aren’t working
• Strengthen relationships over time

Be proactive rather than reactive. Don’t wait for stakeholders to express dissatisfaction—check in regularly and show genuine interest in their perspectives.​

Keys to Stakeholder Communication: 5 Tips

Effective communication forms the foundation of successful stakeholder management. Here are five essential tips for communicating with stakeholders:

1. Establish Clear Communication Channels

Different stakeholders prefer different communication methods. Some want emails, others prefer face-to-face meetings, and still others like project management software updates.

Identify each stakeholder’s preferences and use appropriate channels:

• Emails: Good for regular updates and non-urgent information
• Meetings: Best for in-depth discussions and collaborative decisions
• Phone calls: Useful for quick updates requiring immediate interaction
• Project dashboards: Ideal for real-time progress visibility
• Reports: Suitable for formal updates to senior stakeholders

Using the right channel shows respect for stakeholders’ time and preferences.

2. Communicate Clearly and Transparently

Transparency builds trust. Be honest about project status, challenges, and decisions.

Clear communication means:

• Presenting facts objectively without spin
• Explaining project goals and constraints
• Being upfront about uncertainties and risks
• Sharing both good news and challenges
• Disclosing information early rather than late​

Avoid jargon when communicating with stakeholders who may not understand technical terms. Tailor your language to your audience’s knowledge level.

3. Listen Actively and Encourage Dialogue

Communication must be two-way. Give stakeholders opportunities to respond, ask questions, and share concerns.

Active listening involves:

• Paying attention to both verbal and non-verbal cues
• Asking clarifying questions to ensure understanding
• Acknowledging contributions and summarising key points
• Creating an environment where people feel comfortable speaking
• Acting on feedback rather than just collecting it

When stakeholders feel heard, they become more engaged and supportive.

4. Manage Expectations Effectively

Continuous communication helps manage stakeholder expectations and prevents disappointment.

Set realistic expectations by:

• Clearly defining what the project will and won’t deliver
• Explaining timelines and potential delays
• Being honest about resource constraints
• Updating stakeholders when circumstances change
• Aligning expectations with what’s achievable

When expectations are well-managed, stakeholders are more understanding when challenges arise.

5. Tailor Communication to Each Stakeholder

Not all stakeholders need the same information at the same frequency. Customise your communication based on their interests and influence.

Consider:

• What information matters to them: Executives want high-level summaries; technical teams need details
• How often they want updates: Some stakeholders need weekly check-ins; others prefer monthly reports
• What format works best: Some stakeholders like data and metrics; others prefer narrative updates
• When they need information: Timing matters—provide updates when stakeholders can act on them

Tailored communication demonstrates that you understand and value each stakeholder’s unique needs.

Conclusion

Understanding stakeholders and managing them effectively is fundamental to organisational and project success. Stakeholders—whether internal or external, primary or secondary—have genuine interests in your activities and outcomes. Recognising who they are, what they need, and how to engage them appropriately makes the difference between smooth progress and constant obstacles.

The key to successful stakeholder management lies in systematic identification, thoughtful analysis, clear communication, and ongoing engagement. By investing time in understanding your stakeholders and building strong relationships with them, you create a foundation for achieving your goals whilst meeting diverse needs and expectations.

Whether you’re launching a new product, implementing organisational change, or managing a complex project, your stakeholders will significantly influence your success. Treat them as partners in your journey, communicate openly and regularly, and adapt your approach as circumstances evolve.

Ready to take your stakeholder engagement to the next level? Professional guidance can help you develop comprehensive strategies tailored to your organisation’s unique needs. Explore ESG consultation services to enhance your stakeholder management approach and build sustainable relationships that drive long-term success.