Who is a stakeholder in a business?

Any person or an organization that might be impacted by the activities of a company are termed as stakeholders. Almost all the businesses have stakeholders, be it a local retail store or a big multinational. Although the no of stakeholders might vary from business to business. Shareholders, employees, suppliers, management, banks, financial organization, trade unions, government, communities, media are all considered to be the stakeholders for a company. All the businesses have a key role to play in the lives of their stakeholders and visa versa.

Categories of shareholders and their mutual interest

Stakeholders can be classified in to internal and external stakeholders. Internal stakeholders are employees, shareholders, clients, and partners. External stakeholders are government, suppliers, customers, media, and unions.

Shareholders are often considered as first stakeholders. Employees on the other hand are considered as important and primary stakeholders in business. Many experts consider management as the stakeholders in the business, simply because they feel that they have the total responsibility of maintaining the health of the company and keeping the other stakeholders happy. All the stakeholders have one common interest i.e. the prosperity and success of the business. If the business is successful, all the stakeholders associated with it shall benefit too.

Difference between shareholder and stakeholder:

Although on the onset, the terms shareholders and stakeholders might sound same, however there is a huge difference between them. Shareholders are the owners of the firm, whereas stakeholders although include shareholders, are the ones having some sort of interest in the firm.

Keeping the stakeholders happy…………imperative for the success of any business

All the companies or firms who keep their stakeholders happy are always successful. The company practicing good corporate governance, in long run will create a long lasting relationship with its stakeholders. The main aim for any company is to maximize their profits, and this can be done only in conjunction with their stakeholders. Following steps can help the company in keeping heir stakeholders happy:

• Share the profits with them
• Incentives & Rewards
• Transparency and disclosures
• Make them a partner in decision making
• Gauge their feedback
• Top management and seniors should be approachable
• Encourage open communication

For any firm or company, keeping all there stakeholders happy is difficult. Although company on its part will try its level best to meet the demands of all there stakeholders, they will conflict. Thus it becomes imperative for the company or a firm to prioritize the stakeholder’s demands and plan accordingly.