The term was coined by philosopher and business professor Robert Edward Freeman. In 1963. Freeman defined stakeholders in an internal memo from the Stanford Research Institute as “groups or individuals who without their support, the organization would cease to exist”.
If you want to know more about them, we suggest you continue reading.
Over the next few lines, we will show you what you need to know about this topic:
What is the definition of a stakeholder?
What are the types of stakeholders?
Why is it important to know the stakeholders in your company?
5 tips on how to achieve efficient stakeholder management.
See more: Stakeholder Management: what is it, why it is important to do and 4 tips to implement it in your company
As Robert Edward Freeman said, we can define stakeholders as groups and individuals who one way or another, have some level of interest in the projects, activities, and results of a particular organization.
The English term of origin is used to refer to people who are impacted by the decisions a company makes, either positively or negatively.
So that you can better understand what stakeholders are, here are some of the main examples:
Customers
Employees
Directors
Suppliers
Competitors
Shareholders
Investors
Trade Unions
Government Bodies
Non-governmental organizations
Press agencies
Essentially, there are two types of stakeholders: internal and external to the organization.
In other words employees and managers, are considered internal stakeholders. Customers, suppliers and the press are external stakeholders.
Besides these two types, there are other subcategories that depend on the level of interest and legitimacy of each one.
Arbitrary Stakeholder: is legitimate but has no power to influence the company’s decisions
Sleeper Stakeholder: has neither legitimacy nor immediacy, but has the power to impose its interests
Claimant Stakeholder: has a lot of immediacies, but no power or legitimacy
Dominant Stakeholder: has legitimacy and great power of influence
Dependent Stakeholder: has immediacy and legitimacy, but depends on the power of other stakeholders to be taken seriously
Definitive Stakeholder: is legitimate, has an immediacy and strong power of influence over the company’s decisions
Dangerous Stakeholder: has power and immediacy, but no legitimacy
Knowing how to manage people helps to manage stakeholders, see tips in this video:
Knowing who the stakeholders of your company are is indispensable to achieving success.
This is because ignoring the impact that the decisions of your business model may have on stakeholders can end up compromising your results and financial management. Plus, also damage the company’s image in the marketplace.
All decisions must be considered without losing sight of the stakeholder’s interest. The projects and the internal and external policies must consider the individuals and groups that will positively or negatively be affected, directly or indirectly by the company’s practices.
Thereby, Identifying and understanding who are the individuals with an interest in your organization, enables you to have a broader view of your processes and the impact of your activities. From this, it is possible to implement necessary improvements, so that all involved and interested parties can be satisfied.
Now that you know the concept of stakeholders, their importance and the various types. It is time to find out how to provide efficient management for these interest groups.
Identify which are groups and individuals interested in your company’s activities
Categorize the stakeholders according to their degree of importance, interest and influence on your business model
Align the stakeholders’ expectations with those of your company
Develop an action plan for each stakeholder group
Monitor stakeholder satisfaction
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It’s clear what is the definition of stakeholders and their importance for the good performance of the business.
Now that you know what they are, put into practice the tips we mentioned here and maintain a good relationship with your company’s stakeholders.
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Using meritocracy and management by sight to motivate and manage teams
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Integrate people, operation and strategy.
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