1.5 Stakeholders in a business

Internal stakeholders work within the business, such as employees and managers; external stakeholders include customers, suppliers, government, lenders, owners and the wider community.

Stakeholders can provide resources, impose constraints or gain from outcomes. Their interests may align on one decision and conflict on another.

A factory closure may reduce costs for owners but threaten employees, suppliers and the local economy; the decision cannot be judged from one group’s perspective alone.

Stakeholder is not a synonym for shareholder: shareholders own shares, while many stakeholders do not.

Stakeholder influence comes from control of resources, legal authority, purchasing power, expertise, public legitimacy or the ability to withdraw support. Influence is relational, not fixed.

A business can respond through communication, negotiation, contracts or changes to its plan; the best response depends on the stakeholder’s interest and the decision’s consequences.

A large retailer can pressure a supplier on price, while a regulator can impose a legal constraint. A local community may gain influence through planning objections or public support.

Being affected does not automatically mean having equal decision power, and high power does not make every stakeholder claim legitimate.