Company Stakeholders and Their Interests
Company stakeholders and their interests must be considered when identifying the organizational structure and procedures of a business.3 min read
Company stakeholders and their interests must be considered when identifying the organizational structure and procedures of a business. A stakeholder is any individual or investor group that has an interest in the success of a business. Company stakeholders are often interested in the outcome of a company because they are invested in it in some way.
However, stakeholders may have varying interests, making it difficult for a business to satisfy each one. It is possible to have many different stakeholders, all with different interests in the business.
The Process of Identifying Stakeholders
It is necessary to first identify the stakeholders to understand their interests in the business. Follow the steps below to determine who are your stakeholders:
- Determine the mission and vision of the company. After that, you can usually identify the shareholders that will be consulted. This might include shareholders, capitalist investors, and financial institutions. Product stakeholders may be investors involved in the product selection of the business, while social stakeholders are investors interested in the social activities of the company.
- Identify the key decision makers. Determining the effect of decisions on the stakeholders can help you identify current stakeholders. Some stakeholders are affected by the decisions more severely than others. Consider both the direct and indirect results of the decision-making process.
- Identify individual stakeholders' power and influence on the decision-making process. It is possible that some stakeholders have more influential power than others. Determine who has these powers, including veto power, economic power, and political power. It is important to note that a strong voting power does not necessarily always indicate a stakeholder in the company. However, evaluating power can also help you identify the stakeholder structures within the company.
Various Types of Stakeholders
There are also different types of stakeholders to consider. A primary stakeholder is often someone with a direct interest in the business. They are the individuals that will benefit directly from the actions of the business. This might include employees, customers, and investors.
Secondary stakeholders are parties with an interest in a company, but they do not necessarily benefit from it directly.
Another type of stakeholder is a key stakeholder. This is a party that has the influence on the actions of the business, such as a business owner or the CEO. They are responsible for organizational strategy and upholding the mission and vision of the company. These internal stakeholders might include the board of directors, managers, or even the local government members.
It is not always easy to determine the level of a stakeholder. You may be able to identify that they have interests in the business but not be able to tell the extent or level of their interest. Some positions can make it even more difficult to determine the level of a stakeholder, including volunteers or contract staff.
Most businesses also have external stakeholders. These are parties that have an interest in the business but do not have any direct control over the actions of the business. External stakeholders might include suppliers, financial investors, or local communities. Additionally, the media or competitors might also have interests in the business, making it even more difficult to determine who is an actual stakeholder and who is not.
A List of Typical Stake Holders
These are the types of stakeholders most commonly found in a business structure:
- Customers: Customers have a stake in the product. They are directly impacted by the product or service of the business.
- Employees: Employees have a stake in their income and job security.
- Investors: Investors have a stake in the financial returns of the business. Often, they have invested funds and are awaiting a return.
- Suppliers and vendors: Suppliers/vendors have a stake in the revenues and the safety of their business.
- Communities: Communities have a stake in the local health and safety of their community. They are considered major stakeholders in larger businesses that enter into their local community.
- Governments: Governments have a stake in the taxes earned and GDP delivered.
- Competitor: The competitor has a stake in the knowledge of the business to improve and adjust their own business strategy.
If you need help with identifying stakeholders and their interests, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.