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Who is a Stakeholder?

ArticleID 143  
Writer Isaac Thuku
Category Personal Article

A stakeholder is a person, group or organization that has interest or concern in an organization. Stakeholders affect or can be affected by the organizations action s, objectives and policies. In other words stakeholders are groups without whose support the organization would cease to exist. They show an interest in an enterprise or project. A corporate stakeholder is that which can affect or be affected by the actions of the business as a whole.

Whatever action that is taken by organizations or groups can definitely affect those people who are directly linked with them in the private sector for instance parents, children, customers, owners, employees, associates, partners, contractors and suppliers.

Primary stakeholders are usually internal stakeholders who engage in economic transactions with he business e.g. stockholders, customers, suppliers, creditors and employees. Secondary stakeholders are external stakeholders who although they don’t engage in direct economic exchange with the business are affected by or can affect its actions e.g. the general public, communities, activist groups, business support groups and the media.

Narrow mapping of a company’s stakeholders include employees, communities, shareholders, creditors, investors, customers and the government at large. Broader mapping includes suppliers, labor unions, government regulatory agencies, government legislative bodies, government collecting bodies, independent trading groups, professional associations, Non-governmental organizations , prospect employees, prospect customers, local communities, competitors, schools, media, Alumni’s or Ex-employees, research centers and the public.

The greatest task stakeholders have is to represent the needs of an interest group whose issues must be fulfilled by a particular project. Stakeholders happen to be affected by the undertaking of the given project. A stakeholder ensures that all interested parties have their interest heard and considered. Local stakeholders include site owners, local government officials, community based groups, property owners and local organizations.

Stakeholder’s role is determined by the company itself. Internal and external stakeholders have different roles and levels of involvement in a business. A stakeholder must have financial interest in a given company in order to join the association. Stake holders are important in shaping projects in the early stages, ensuring resources are available to contribute project success and also provide insight regarding the probable reaction to a projects outcome. This facilitates project adjustment when necessary to gain organizational support.

Key stakeholders in every business venture are creditors, directors, employees, the government and its agencies, business owners and shareholders, suppliers and the community from which the business draws its resources. It’s important to note that not all stakeholders are equal. Customers are always entitled to fair trading practices, rights and privileges that employees don’t enjoy. As the saying goes, “the customer is always right”.

Also having many stakeholders in a single business enterprise can cause a problem in that their self interests may not be fulfilled. They may happen to conflict one another and unfortunately some will be forced to pull out of the business association. It is the duty of every entrepreneur to ensure that stakeholders accomplish their goal in view of shareholders which is to maximize profits and enhance shareholder value.

Who is a Stakeholder?
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