internal stakeholder in a business plan

8 Types of Internal Stakeholders and Their Roles

Editorial Team

A stakeholder is a general term that refers to anyone with a legitimate interest in an organization, strategy, or project. These can either be individuals or organizations and are generally grouped into internal and external stakeholders and exist at different levels of management.

However, our primary focus is on internal stakeholders. Who are these, and how different are they from external stakeholders? We can define internal stakeholders as those directly involved in running an organization or a given project and who have a legitimate interest.

These consist of everyone involved in management, marketing, designing, manufacturing, assembly, and general sales. On the other hand, external stakeholders are not involved in direct production but mainly focus on or are affected by the end product.

Internal stakeholders are often critical to the business because they are the key to success. The satisfaction of the internal stakeholders often judges the success of a company, strategy, or department. Every organization must therefore find and engage these individuals to drive success.

These stakeholders are directly involved in production and often shoulder most of the work. Therefore, for easier identification, one needs to look within the immediate team and then look at the people or groups he/ she connects with during the lifecycle of the project.

Types of Internal Stakeholders and Their Roles

This is a general term that refers to anyone using a specific product, service, tool, machine, or technology. For example, users who form part of internal stakeholders can be employees utilizing a tool or application and any other person operating a machine within the organization.

Users also refer to everyone in the business, such as the business manager, marketing manager, or business analyst who uses information to make vital decisions. As a result, they ensure that the business stays profitable through proper decision-making.

Users, therefore, play important roles in the lifecycle of different projects as their input may come in handy. Remember, vital decisions have to be made as the project progresses. Therefore, they may be called upon to offer information that the project team may use to arrive at such decisions.

2.      Business Unit

A business unit is a department or team within the organization that produces revenue and accounts for costs. It usually has strategic objectives separate from the parent company.  It also refers to any team that manages products and services. It can also be referred to as the strategic business unit or profit center.

These units allow senior management to see things more clearly and aid in management through micro-management. They also help in proper decision-making and the setting up of new units within the business.

Business units are headed by business unit managers who plan and direct the administrative services of the company. Through the business managers, these units may be called upon to work closely with project managers to realize certain deliverables and execute key projects.

The business unit manager also empowers, selects, coaches, and retains qualified employees who may form part of project teams and help the organization meet its goals.

3.      Operations Team

Another crucial internal stakeholder is the operations team. Given that their relevance relies on business success, they have a legitimate stake in the company. The operations team ensures that the business runs profitably by managing and optimizing the necessary details. This means that their input will help successfully execute an organization’s project to ensure profitability.

They deliver the right resources to allow different departments to do their job and work on intended projects. They also promote interdepartmental communication and supervise other teams’ activities. Even though they rarely associate directly with customers, they ensure that the company offers quality goods to them promptly.

Operation teams can also work as project teams in given circumstances. They may therefore devise schedules and have milestones that need to be achieved. As a project team, the operations team is expected to contribute to the overall objectives of the project and the given deliverables.

They must also ensure that the project activities are planned accordingly and execute tasks assigned to them in such circumstances. In addition, however, they offer the organization business or technical expertise needed to execute different project tasks successfully in normal cases.

4.      Owner

The owners of the organization or business are essential stakeholders, given their stake in the success and general performance of the business. Most of the time, unless in a sole proprietorship, the roles of the business owners are strategic instead of managerial.

Business owners are rarely engaged in the day-to-day running of the business. Instead, they are often considered initial investors who are mainly interested in the business value and profitability. All other roles are done by employees at different levels of the organization.

Business owners focus on the bigger picture and what can be done differently. Most owners started the business themselves and therefore have the right vision and roadmap for the business. As a result, they are not only knowledgeable but can also make strategic decisions and do away with both political and financial obstacles facing different projects without getting clearance from anyone within the organization, unless in particular situations.

Like investors, a business owner can either be an individual, a group of individuals, or even an organization. This stakeholder communicates closely with other key stakeholders and has a strong relationship with the service owner, charged with creating a roadmap that aligns the business to the vision.

In project settings, it is normal for the business owner to be the operational owner of the project. When undertaking a given project, the business owner is expected to make the first decisions, making him/ her an essential part of the organization and project as a whole.

The business owner is also, in some cases, mandated with appointing a project owner who has vast knowledge on project-related business. With the owner’s authorization, the project owner will use his/ her experience in project management to ensure that the given project is successful.

Also, note that in most cases, th business owner will fund the projects, especially in sole proprietorships. 

5.      Board of Directors

The board of directors is usually made of the top-most management of the organization, including the Chief Executive Officer. These individuals are the policymakers of the organization. They are rarely involved in the management of the business as part of their job is to hire the CEO or a general manager, who is then responsible for staffing and overseeing the overall day-to-day running of the business.

Their primary role is to assess the overall direction and the strategy of the business. They do not meddle in the company’s day-to-day running as this may present lots of conflicts that are better avoided.

The board establishes a policy-based governance system for the business as guided by the articles of governance. These include policies that guide their actions and those of the manager responsible for the company’s day-to-day running. It must ensure that these policies are broad and not shallowly defined to allow the organization’s goals to be easily achieved.

They also govern the organization as well as the relationship with the Chief Executive Officer. Again, this is in line with developing a governance system. The way the board interacts with the CEO should therefore be closely spelled out. Mostly they only engage the CEO during board director meetings, which happen once a month or even 3 to 8 times a year.

It is also concerned with monitoring and control as it is involved in the auditing process and hires the auditor.  It must ensure that the audit is done within the time limits, year in, year out. The board also has a fiduciary role. It is expected to protect the assets of the organization as well as the investment of the members.

It therefore represents and protects all the interests of the members or investors in the company. This means that it has to ensure that all the company assets are kept well and in good order. These include the plant, equipment, facilities, and even the human capital. The board must also ensure that the interest of these investors is taken care of before the commencement of any project, which explains why they ar often consulted.

Lastly, the board recruits, supervises, retains, compensates, and evaluates top most managers such as the CEO and the general manager. Members, therefore, look for the best candidates who can steer the business to the next level. They can do this by actively searching within the industry, which reveals lots of capable candidates.

6.      Managers

The management of a company is part of the internal stakeholders. They are usually greatly affected by the overall performance, given that most of the time, they make decisions in consultation with the top management, to who they report. Their roles are geared towards ensuring that the business remains afloat and everyone is satisfied. In addition, they manage other internal stakeholders such as employees who are part of project teams, ensuring that they do not lose sight of the organization’s goals and are motivated enough.

These stakeholders further ensure that everyone enjoys the company’s culture and feels vital in their teams. They, therefore, increase internal stakeholder motivation, which is an essential recipe for increased productivity and the successful execution of projects.

Managers at different levels must therefore understand their position and how each project affects them and others before coming up with ways to go about different instances. They must also be ready to consult with other internal stakeholders before deciding on issues that may affect them. For example, before acquiring any supplies for a given department, they have to consult with the employees in the department about what they feel that they lack.

Managers also play an important role when it comes to the successful execution of projects. A key player in project management is the project manager, whose roles are to plan, organize and ensure that specific projects are completed.

These managers oversee challenging projects, right from inception to completion, making them a vital part of the organization. In addition, they can change the direction of a given company owing to the power that they yield.

However, note that the project manager’s duties may vary depending on the industry, organization, or the projects to be overseen.

7.      Employees

Employees are essential internal stakeholders. They have a direct stake in the company since they earn an income and are entitled to several benefits from it, which can either be monetary or non-monetary. Employees can also have a health and safety interest in the organization, depending on the nature of the business.

Now that you understand how employees are internal stakeholders let us look at their roles. These individuals are normally directly involved with the production even though they occupy different levels in the organization and play different roles.

Some of the typical roles include meeting all the duties and responsibilities captured in the job description. Every job applicant is usually furnished with a job description, which details the duties and responsibilities they are intended to perform once they are absorbed into the organization.

Employees also form part of the project teams mandated with the realization and successful execution of different projects. They may also occupy positions within these project teams. In the project setting, these employees contribute to the desired objectives, provide expertise, complete deliverables, work with users, and document the process.

8.      Shareholders

Shareholders are at times considered the business owners. They own shares in the company and thus offer financial footing, getting dividends in return, payable in the company’s lifecycle. One can become a shareholder by subscribing to the company’s memorandum of association at its formation, buying new shares, or purchasing them from an existing shareholder. The shareholders also ensure that the companies are accountable for their actions and are represented by a board of directors who act as custodians of their interests.

Being internal stakeholders, shareholder’s voices must be hard before the commencement of a given project. Most shareholders, especially those with voting rights, wield lots of power and can, therefore, negatively or positively influence a project.

The board of directors must also ensure that their welfare is taken care of before the commencement of any project and that they stand to gain.

These are some of the most common internal stakeholders who play an essential role in every organization. They are all needed to properly run the business and achieve the business’s goals, objectives, and missions.

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• Project management |
• 5 steps to creating a stakeholder engag ...

5 steps to creating a stakeholder engagement plan (with template)

A stakeholder engagement plan (SEP) documents the involvement and influence of your project stakeholders. It also outlines how you plan to communicate with stakeholders. Read on to learn how a stakeholder engagement plan can help you manage your stakeholder relationships.

A stakeholder engagement plan template helps you outline who your stakeholders are, their influence and interest levels, and your communication strategy. Your team can use this template to meet stakeholder needs and prevent communication barriers from disrupting the project workflow . Read on to learn how a stakeholder engagement plan can help you manage your relationships with customers, investors, and executives.

What is a stakeholder engagement plan?

A stakeholder engagement plan (SEP) documents how involved and influential your project stakeholders are. It also outlines your stakeholder communication plan, including when you’ll reach out to each stakeholder, what platform you’ll use, and how much information you’ll deliver.

Stakeholders can either be individuals from within your team or external parties that are impacted by your work.

Internal stakeholders may include project managers , operations teams, department heads, and board members.

External stakeholders may include clients, customers, investors, suppliers, company partners, or shareholders .

Because communication with stakeholders begins right at the start of a project, you’ll create your engagement plan during the project planning phase. Once you have an idea for a project, identify who your stakeholders are and how involved they need (or want) to be. As the project progresses, you can adjust your SEP to meet their needs.

How to use a stakeholder engagement plan

A stakeholder engagement plan should not prompt your team to listen to some stakeholders while ignoring others. What it should do is guide you through the project planning process and help you communicate with those who desire it most. 

For some stakeholders, buy-in and education is key. For others, they’d rather passively access material on their own time. As you create your SEP, separate stakeholders into categories so you can communicate with them in the way that will be most beneficial based on their influence and interest levels. 

One benefit of an SEP is its collaborative nature. When you incorporate your SEP into work management software , your team can update the document as needed and assign ownership to different sections. This will also give you the freedom to share the plan between projects and people.

What to include in a stakeholder engagement plan

Stakeholder engagement plans differ based on what team and stakeholder priorities.

Key components of an SEP include:

Stakeholder name: Identify who your stakeholder is.

Interest level: Give stakeholders labels based on what level of interest or engagement they have in the project. See the five levels of stakeholder engagement below.

Influence level: Give stakeholders rating labels from very high to very low based on how much influence they have on the project. 

Communication frequency: Identify how often you’ll communicate with this stakeholder.

Communication channel approach: Identify what communication tool you’ll use to communicate with this stakeholder.

Information type: Identify the type of information you’ll deliver to this stakeholder when communicating.

The goal of creating your stakeholder engagement plan is to identify the stakeholder’s goals or motives as well as the communication methods you’ll use with them.

5 steps to create an SEP

To create a stakeholder engagement plan that helps you work with stakeholders in a way they can appreciate, you’ll first need to understand what their needs are and how they influence your project. Use the steps below to get started.

1. Identify your stakeholders

Some stakeholders will be more engaged in your project from the start. This level of engagement often comes from their motives.

For example, an internal executive overseeing the project may be more engaged because their job depends on it. Alternatively, an external partner with a small financial stake might have less engagement and may not want every detail of what’s going on. 

The five levels of stakeholder engagement

Leading: A leading stakeholder is aware of the project’s impact and is actively involved.

Supporting: A supporting stakeholder is aware of the project’s impact and supports the project.

Neutral: A neutral stakeholder is aware of the project’s impact but neither resists nor supports the project.

Resistant: A resistant stakeholder is aware of the project’s impact but resists change.

Unaware: An unaware stakeholder doesn’t know about the project or its impact.

Once you know your stakeholders’ engagement level, you’ll identify their level of influence on the project. The Project Management Institute defines influence as how much power a stakeholder has over a project. When a stakeholder has high influence, they can control key project decisions and cause others to take action.

The scale of stakeholder influence

Very high: A stakeholder with very high influence has a significant amount of control over key project decisions.

High: A stakeholder with high influence can cause others to take action.

Medium: A stakeholder with medium influence is often part of the decision-making process.

Low: A stakeholder with low influence can offer opinions on decisions and express their concerns, but you may not always take their ideas into consideration. 

Very low: A stakeholder with very low influence can engage in the project when they desire, but they won’t have control over any decisions.

2. Map stakeholders on influence/interest grid

Now that you know your stakeholder influence and interest level, you’ll map each stakeholder on the influence/interest grid. This isn’t something you’ll want to share with your stakeholders, but it can help you determine what your communication style and cadence should be for each individual.

The four main stakeholder groups are:

High interest and high influence. These are your stakeholders from your “leading” or “supporting” category. They are your key players and the most important on your stakeholder list. Make sure you check in with these stakeholders regularly and thoroughly educate them about the project. These are the stakeholders that are most important to have on board.

High interest and low influence. These stakeholders also likely come from your “leading” or “supporting” categories. While they don’t have as much influence, they should still be kept in the loop on all major communication and encouraged to participate in other ways depending on the situation. When you use a project management tool , you can keep high interest stakeholders in the loop without added effort.

High influence and low interest. These stakeholders can come from your “neutral” or “resistant” categories, and education is critical to keep them on board. They can become more resistant if they're surprised by a project change, so make sure they have access to information when needed, and inform them of any work that might impact their project workflows.

Low influence and low interest. These are stakeholders from your “unaware” category. You don’t need to contact these people often, but you should use your project management tool to send out monthly updates. That way, you can provide key project details and they know they have the opportunity to get more involved.

3. Build a communication plan

Stakeholder mapping offers you some guidance on how to communicate with stakeholders based on their level of influence and interest. Using these grid points, your next step is to create a custom communication plan . 

A communication plan is critical because it informs how you’ll educate and update your stakeholders. Regardless of what quadrant they fall into, make sure stakeholders have a way to access relevant project information. The best way to do this is by keeping all of your project information in one place, like a project management tool . Stakeholders who need real-time insight into project status or want to get a bird’s-eye view of the overall project timeline can use this tool to keep themselves informed. 

There are two steps to creating a communication plan: 

Identify your different communication channels. Which communication channels does your team regularly use? What is each communication channel for? 

Identify what type of communication each stakeholder quadrant needs. Communication isn’t one-size-fits-all. Figure out how you’ll communicate and educate stakeholders during the project lifecycle. 

For example, stakeholders who have a lot of interest and influence in the project may want weekly communication. You can provide this by sharing out your project status updates through your work management tool .

Once you create your communication plan, share it with your project team. If you change your communication plan, make sure you update it and communicate those changes. That way, team members always have access to the most up-to-date information.

4. Use feedback to revise plan as needed

Stakeholders often change behavior throughout the course of a project, so remember that the points you’ve mapped on the interest/influence grid aren’t set in stone. 

Not only can you revise your plan based on behavior changes you observe, but you can share your plan with stakeholders and ask for their feedback. The best way to get feedback from stakeholders is to be clear about what you're asking for. 

For example, provide stakeholders with your communication plan and ask them, “Does this communication plan work for you? Are there any areas you’d like to change?”

Other tips for getting feedback:

Ask for written feedback or provide a formal survey with detailed questions about your engagement process

Ask your internal team what they think about the engagement plan

Communicate any changes you make to the engagement plan with stakeholders and team members

Ask for feedback in a video call if it’s easier and more convenient for the stakeholder 

Stakeholder engagement plan template

Below is a filled-in example of a stakeholder engagement template that includes an area to list your stakeholders, rate their level of interest and influence, and outline their communication plan.

Download our free SEP template below to build a well-planned engagement strategy for your next project.

What are the benefits of a stakeholder engagement plan?

A strong stakeholder engagement plan helps your team inform and educate stakeholders. Other benefits of SEPS include:

Manages expectations : Ensures stakeholders know the project’s trajectory and what to expect through each project phase.

Reduces project risks : Keeps stakeholders from making large changes that risk the project’s success.

Builds trust: Creates stronger relationships between team members and stakeholders.

Improves decision making : Makes it easier to anticipate stakeholders’ needs and desires to determine the next steps.

Promotes synergy : When teams communicate, they’re able to collaborate and create more effectively. 

Streamline stakeholder planning with Asana

Stakeholder engagement is crucial to the success of any project. When you tailor your communication to each stakeholder's needs and desires, the results will be invaluable. 

Asana gives you the versatility to plan your engagement strategy, share your plan with others, and put that plan into action alongside your project. Map out all of your initiatives in one place, from marketing campaigns to projects and client relationships.

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How to perform a stakeholder analysis

Reading time: about 7 min

You’ve crunched the numbers. You’ve built out your case for a new project or technology investment. You’ve got all the resources to make it happen.

But you’re still missing a step—and arguably the most important one: stakeholder approval and buy-in.

Stakeholders are built into every organization to help ensure that messaging is accurate, work stays on track, or new initiatives are aligned toward shared business goals. While their intentions are good, stakeholders can often be viewed as a roadblock to progress.

That’s why it’s so important to understand the stakeholder analysis process and make sure your goals will actually garner support. Here, we’ll dive into how to perform a stakeholder analysis to identify and get buy-in from key stakeholders at your organization.

Who is a stakeholder—and why do they matter?

Projects are a collaborative effort that impact and intersect with multiple people, teams, organizations, and clients. Anyone who is affected by the outcome of your project, or is actively involved in the project, is referred to as a stakeholder.

This includes any people or groups that influence and are impacted by your project’s outcome, such as

• Project manager
• Team members
• Senior management

Stakeholders can include a wide range of people with varied—and often conflicting—interests that you will need to manage. Keeping stakeholders happy, informed, and on-board is essential to moving your project forward. That’s why understanding who your stakeholders are and what their level of investment and influence is on the project is critical to your success.

What is a stakeholder analysis?

Stakeholder buy-in and approval is just as much about communication, education, and visibility as it is about strategic alignment. Stakeholders must be able to quickly and easily understand where a new project or investment fits into the larger business picture.

A stakeholder analysis template, also known as a power interest grid, can help you in four key ways:

• Gathering crucial input: You don’t know what you don’t know. Often, key stakeholders deliver valuable insight that can help keep your project on track and successful.
• Gaining more resources: If your stakeholder has a full understanding of what it will take to get your project off the ground, they may be able to help you secure the people, tools, and resources you need to make you successful.
• Building trust: By consistently engaging and involving stakeholders in your process, you’re building trust that may make them quick to support upcoming projects.
• Planning ahead: Consistent feedback from key stakeholders helps you anticipate feedback and requirements on future projects to gain buy-in more quickly.  

Performing a stakeholder analysis involves these three steps.

Step 1: Identify your stakeholders

Brainstorm who your stakeholders are. List all of the people who are affected by your work or who have a vested interest in its success or failure. Some of these relationships may include investors, advisors, teammates, or even family.

There are two main groups of stakeholders: internal stakeholders and external stakeholders.

Internal stakeholders are individuals or groups within your business, such as team members or leadership.

External stakeholders are individuals or groups outside the business, including end users, customers, and investors.

You will need to identify and assess both types of stakeholders in your analysis.

Step 2: Prioritize your stakeholders

Next, prioritize your stakeholders by assessing their level of influence and level of interest. The stakeholder grid is the leading tool in visually assessing key stakeholders.

The position that you allocate to a stakeholder on the grid shows you the actions to take with them:

• High power, highly interested people: Fully engage these people, and make the greatest efforts to satisfy them.
• High power, less interested people: Keep these stakeholders satisfied, but not so much that they become bored with your message.
• Low power, highly interested people: Adequately inform these people, and talk to them to ensure that no major issues arise. People in this category can often be very helpful with the details of your project in a supportive role.
• Low power, less interested people: Again, monitor these people, but don’t bore them with excessive communication.

Step 3: Understand your key stakeholders

Now that stakeholders have been identified and prioritized, you need to understand how they feel about your project. Some good questions to ask include:

• Do they have a financial or emotional interest in the outcome of your work? Is it positive or negative?
• What motivates them the most?
• Which of your project information is relevant to them, and what is the best way to relay that information?
• What is their current opinion of your work? Is that opinion based on accurate information?
• Who influences their opinion, and are those influencers also your stakeholders?
• If they’re not likely to be supportive of your project, what can you do to win their support?
• If you can’t win their support, what can you do to manage their opposition?

Once you've prioritized your stakeholders and consider their attitude toward your project, you should also consider creating a project management communication plan . A communication matrix will let everyone involved know how often they need to loop stakeholders in.

The most common stakeholders

Below is a list of common stakeholders and some examples of associated communication strategies.

Your direct manager/supervisor

High power, high interest

Your boss’s reputation is tied to the productivity of the people they lead. Your boss also likely has the power to advance or shut down your project(s). This means that you should manage this relationship closely, communicating frequently and requesting and implementing feedback.

Shareholders/investors

High power, medium interest

Shareholders and investors usually hold stake in multiple entities, diluting their unique interest in your project/undertaking. As such, to leverage their investment in your work, you should communicate frequently with them, consult and involve them, with a goal of increasing their interest over time. This is obviously dependent on the type of investment role that exists, and whether your project is the sole investment or part of a portfolio of investments.

High power, probably low interest

The government controls the laws and regulations that could shut down your business or project. Health code inspectors and IRS auditors are examples of government officials that classify as stakeholders. Because government entities monitor everything/everyone, their interest in your individual business/endeavor is likely low. As such, your goal should be to keep them satisfied, communicating regularly, consulting and involving them in order to prevent them from posing a risk to your project.

Senior executives

High power, low interest

Your company’s senior executives make the biggest decision, giving them high influence but limited bandwidth to focus on your project specifically. This means your strategy should be to keep them satisfied. Communicate when necessary, consulting and seeking feedback, to increase their interest in you and your work.

Your co-workers

Medium power, medium interest

Co-workers carry a range of influence, but mostly their influence will be in their ability to leverage additional resources for your project, including the support of other co-workers and your superiors. That means you want to keep them satisfied and informed. Update them on your project, and be willing to leverage their interest into a supporter role.

The tools you need to keep stakeholders informed

No matter the level of technical knowledge around your project, visuals like a stakeholder diagram are a great way to communicate your project to your key stakeholders and obtain buy-in. Further, it’s useful to know not only what to communicate, but how often to communicate.

Lucidchart offers numerous templates to help you keep stakeholders updated on new and in-progress projects.

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

Related articles

Before you start any project, learn how to identify and gain the support of the right people through a stakeholder map and analysis.

Learn how to create a communication plan for project management and how this documentation can benefit your team and stakeholders. This article includes best practices and communication plan templates!

Bring your bright ideas to life.

or continue with

How to create a stakeholder map [templates & examples]

As teams within larger organizations become more empowered to make decisions and drive innovation, documentation and generating buy-in take on increasingly important roles. This is where a stakeholder analysis comes into play.

Stakeholder maps outline the context for what the project stakeholders are, their level of influence, which key players are responsible for decision-making, and they provide a visual representation of how these all connect into a larger engagement strategy.

When developing new ideas, kicking off a new project, or building new products, it's important to consider who will be involved, who will be affected, and to what extent. In this guide, we'll cover: 

What is stakeholder mapping?

Why is stakeholder mapping important.

• Common types of stakeholders
• Methods for mapping stakeholders
• A step-by-step guide for mapping stakeholders

Let’s get started!

A stakeholder map is a visual representation of individuals or groups with a vested interest in a project, product, or idea. Stakeholder mapping helps you identify these key stakeholders, understand their influence, and develop a strategy for stakeholder management.

Depending on your project, your list of stakeholders might include clients, collaborators, project owners, or even end-users of a product.

Creating a map of your stakeholders helps you identify key partners, understand how they will influence your project, and  create a plan for how they should be involved and managed throughout the process. 

This information can be used to develop a communication and engagement plan that meets everyone’s needs and helps you more effectively manage stakeholder expectations and ensure your project’s success.

By aligning stakeholders with their respective roles and responsibilities, organizations can create a framework for stakeholder engagement that is both effective and efficient. Additionally, stakeholder mapping can help to identify potential areas of conflict and misunderstanding, allowing organizations to address these issues before they become major problems.

Stakeholder mapping is a valuable tool that can help organizations to improve stakeholder communication and build team alignment .

When do I need a stakeholder map?

When developing new products, kicking off a new project, or building new features, it's important to consider who will be involved, who will be affected, and to what extent. Stakeholder management is a helpful tool to have during the project discovery, implementation and review phases of a project, making it instrumental for collaborative project management .

For example, if you're developing a new employee portal, you'll need to map out the relationships between HR or People Operations, IT, and the employees who will be using the portal.

What are the types of stakeholders?

There are a few different ways to group stakeholders, so we recommend using whichever method works best for your use case. The main ways you can categorize stakeholders are by level of influence, involvement, and proximity to the work being done.

Pro-tip: The stakeholder mapping template appearing later in this article prioritizes your stakeholders by interest and influence.

Stakeholder influence

When grouping stakeholder by influence, there are four main types of stakeholders: primary, secondary, tertiary, and quaternary:

• Primary stakeholders are those who have a direct impact — or high power — on the product or project (e.g. employees, customers).
• Secondary stakeholders are those who have an indirect impact on the product or project (e.g. shareholders).
• Tertiary stakeholders are those who have a potential impact on the product or project (e.g. industry experts). ‍
• Quaternary stakeholders are those who have no direct impact — or low power — on the product or project but may be interested in its success or failure (e.g. media).

It's important to consider all four types of stakeholders when developing your map; however, primary and secondary stakeholders should be given special attention as they have the most direct impact on your product or project.

Stakeholder interest

Grouping stakeholders by level of interest (or involvement) can help you understand and prioritize the stakeholders you’ll be working with most closely. These are the three levels of stakeholder involvement:

• High-involvement stakeholders are those who have a significant interest in your project or organization and who could be significantly impacted by its success or failure. 
• Medium-involvement stakeholders are those who have some interest in your project or organization but who are not as invested as high-involvement stakeholders.  ‍
• Low-involvement stakeholders are those who have little interest in your project or organization and who are not likely to be affected by its success or failure.

Internal vs. external stakeholders

Internal stakeholders and external stakeholders are two different categories of individuals or groups who are affected by an organization or project. The main difference between the two is their relationship with the organization or project.

Internal stakeholders

Internal stakeholders are team members or groups who are directly related to the organization or project, and are typically involved in its day-to-day operations or decision-making processes. Internal stakeholders have a vested interest in the success of the organization or project, and their involvement is crucial to its achievement. 

Internal stakeholders may include employees, managers, board members, and shareholders.

External stakeholders

External stakeholders, on the other hand, are individuals or groups who are not directly related to the organization or project, but are affected by its actions and decisions. External stakeholders have a varying degree of influence on the organization or project, and their involvement can have a significant impact on its success or failure. 

External stakeholders can include customers, suppliers, regulatory agencies, community groups, and the general public.

How do you map the relationships between stakeholders?

Once you've identified all of your potential stakeholders, it's time to start mapping out their relationships with each other. 

The basic components of a stakeholder map include a framework, evaluation criteria, your stakeholders, and how they’re involved. You can also include any additional information relevant to your specific project.

There are two main ways to do this: by using a grid system or by creating a network diagram. Learn more about these below:

Grid stakeholder map

A grid system is best for large projects with many stakeholders; it allows you to see all of the relationships at a glance and identify any potential conflicts early on in the process. 

This can be helpful to determine each stakeholder’s level of interest or involvement. Try to organize stakeholders from high interest to low interest to guide your communication plan.

Network diagram

A network diagram is best for smaller projects with fewer stakeholders; it provides a more detailed look at how each stakeholder interacts with others and how they might be impacted by changes throughout the process.

Stakeholder map example

Below is a template for stakeholder mapping, with three key components:

• An area for brainstorming who your stakeholders are
• An interest vs. influence matrix that allows you to plot all your stakeholders across four quadrants: Monitor, Actively Engaged, Keep Informed, and Keep Satisfied 
• A visual of your stakeholder map, with the new product or feature at the center and the various levels of stakeholders radiating outward from the middle.

How to create a stakeholder map in five steps

1. define the purpose of the stakeholder map..

The first step in creating a stakeholder map is to define the purpose of the map. Are you creating a new product or feature? Are you preparing to enter a new market or niche within your existing market?  What information do you want to include? Once you have a clear idea of the purpose of the map, you can move on to the next step.

2. Brainstorm and identify who your stakeholders are.

The next step is to identify who your stakeholders are, which means it’s time to brainstorm with your team . A stakeholder is any individual or group that has an interest in your project or organization. When identifying your stakeholders, it is important to think carefully about everyone potentially involved, at every stage of the process — and that means both internal and external stakeholders. 

Remember: Internal stakeholders are individuals or groups within your organization, while external stakeholders are those outside of your organization.

3. Determine what level of involvement each stakeholder has.

Once you have identified your stakeholders, you need to determine what level of involvement each one has, and at what stages of the project. As a refresher, there are three levels of involvement: high, medium, and low. 

For example, in this Mural stakeholder mapping template built by the LUMA Institute , we use the radar approach to map not only the level of involvement but also the connection between stakeholders. 

Think carefully about which buckets each stakeholder belongs in, keeping in mind that high-involvement stakeholders may be external to your organization, while low-involvement stakeholders may be your colleagues, depending on the nature of the project.

4. Identify each stakeholder's interests and goals.

The next step is to identify each stakeholder's interests and goals. What does each stakeholder stand to gain from your project? What are their goals? What are their main concerns or issues that could get in the way?  How might different stakeholders have competing priorities ?

Once you have identified these areas of interest and specific goals, you can begin to think about how best to engage with each stakeholder.

5. Develop an engagement plan.

The final step is to develop a plan for engagement. How will you engage with each stakeholder as you develop your map and begin your project? What communication channels will you use? What type of information will you share? Once you have developed an engagement plan, you can begin implementing it and working towards achieving your goals.

The bottom line

Stakeholder maps provide the necessary documentation to effectively communicate thought processes, plans, and analyses in both directions (whether asynchronously or in real time), ensuring that leadership understands the reasoning behind new product or feature development, as do the employees tasked with carrying out the individual tasks. 

This is why stakeholder mapping is an essential tool for any Scrum master, Agile coach, consultant, or project leader looking to foster high-impact innovation and ensure successful execution of their product development plans.

Stakeholder mapping steps:

• Define the purpose of your stakeholder map — what belongs in the center?
• Brainstorm to build your list of stakeholders
• Determine each stakeholder’s level of involvement
• Determine each stakeholder’s interests and goals
• Build an engagement plan based on stakeholder personas

By taking the time to map out all of your stakeholders and their relationships with each other, you can create a communication and engagement plan that meets everyone's needs, ensuring smooth sailing from start to finish!

Build a free stakeholder map with Mural

Mural is the visual work platform that allows all kinds of teams to do better work together — from anywhere. Team members get aligned faster with templates, prompts, and proven methods that guide them to quickly solve any problem. They can gather their ideas and feedback in one spot, allowing them to see the big picture of any project and act decisively.

Whether you’re looking to transform how your team works , or just get started with a stakeholder mapping tool , look no further than Mural.

Get started with one of Mural's free templates that drive empathy and understanding , included with any Free Forever account , and invite unlimited members so that everyone on your team can participate.

About the authors

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How To Create the Perfect Stakeholder Management Plan

April 19, 2022 - 7 min read

A stakeholder management plan is a strategy document that will help you ensure project deliverables and expectations align and that your project is seen as a success. Without a plan to regularly update stakeholders, resources, funding, employees or materials can be impacted. 

Learning how to create the perfect stakeholder management plan can be difficult, so within this article, we’ve explained in detail what should be included in a stakeholder management plan, who should write the document, and what might happen if you choose not to make one. 

We’ve also built a handy communication plan template that makes creating a stakeholder management plan simple and straightforward. It will help you keep stakeholders informed and aligned with a regular series of communications.

What is a stakeholder management plan?

A stakeholder management plan is a written document that outlines how your team plans to manage the goals and expectations of key stakeholders during the project lifecycle. 

What are stakeholders ? A stakeholder is anyone who might be impacted by your project or has a business interest in how your project turns out. Common stakeholders include:

• Project team members
• Project sponsors
• Company executives
• Clients and customers
• End-product users
• Suppliers and vendors
• Contractors
• Community members

Key project stakeholders are stakeholders who not only have an interest in the project outcome but also have the power to influence communication plans , policy, and other procedures. This influence can be exercised through levels of participation, review cycles, and more. 

Typically, key stakeholders include your client, project team, sponsor, resource managers, and executive committee. 

Project stakeholder management involves creating a stakeholder management strategy that addresses expectations, resolves conflicts, and ensures stakeholder needs are met. 

An effective stakeholder management plan also typically identifies vital information about your key stakeholders and outlines your strategy and plan for managing each one. 

Who creates a stakeholder management plan?

The project manager usually creates the stakeholder management plan. However, that doesn’t mean the PM completes it in isolation. You must gather input from everyone involved in your project to identify the key stakeholders and assess their needs, expectations, and level of influence.  

What is covered in a stakeholder management plan?

The primary components of a stakeholder management plan are:

• Prioritization of stakeholders:  Rank stakeholders based on their ability to influence your project and how much they care about its outcome. 
• Stakeholder expectations:  You cannot manage expectations if you don’t know what they are. You must document everything, including how they prefer to communicate and what they want to be involved with. 
• Communication rules:  The plan should outline the level, frequency, and type of communication with each stakeholder as well as who on the team is their point of contact. 
• Action plans:  This is the meat of your plan — It’s where you outline how you will manage stakeholder involvement and what steps to take to ensure expectations are met. 

Why is a stakeholder management plan important?

Effective stakeholder management is critical to a project’s success. Key stakeholders often have control over project resources, such as project funds, employees, materials, or knowledge critical to its success. 

A documented stakeholder management plan of action ensures your stakeholders’ interests and expectations are understood so that you can properly manage them. A plan enables you to articulate to a project team how communication will work, including who will be told what and when. 

Going through the process of creating a plan also helps you analyze your stakeholders and better understand them. This can help you better anticipate their needs and proactively address any concerns. 

What happens if you don't have a stakeholder management plan?

If key stakeholders aren’t engaged, or worse, if they’re actively working against your project, your chances of failure drastically increase. 

Successfully dealing with difficult stakeholders requires knowledge of what motivates them. Without a stakeholder management plan , you may not understand the underlying factors driving them, meaning you will be unsuccessful in getting them on your side. 

Plus, without having assessed and prioritized your stakeholders in your stakeholder management plan, you could waste a lot of time dealing with stakeholders with little power while overlooking those with the authority to tank your project.

Top tips for how creating a stakeholder management plan

Here are eight tips for how to create the perfect stakeholder management plan:

• Use a template:  A stakeholder management template guide  or a pre-built RACI template will save you time creating your plan, ensure no information fields are overlooked, and create consistency, as every stakeholder plan in your company will look the same. 
• Start early:  Key stakeholders can influence your project before it’s even off the ground. Identifying and involving stakeholders early can make all the difference to their level of engagement and your success.
• Update regularly:  Stakeholders change throughout your project. Some may leave positions while others may join. Plus, their level of engagement and expectations may evolve as time goes on. Review your plan at least monthly to ensure it’s up-to-date. 
• Ensure transparency:  Transparency builds trust, and when you have your stakeholders’ trust, you’re much more likely to have their cooperation and support. When creating your communication guidelines in your plan, keep in mind that open, frequent, two-way communication creates project transparency. 
• Make priority clear:  Including a grid or matrix of stakeholders based on interest and influence can help you quickly see and understand where to focus your efforts. 
• Be concise:  For your plan to be successful, you need to get to the root of what people care about and document it in concise, easy-to-understand terms that anyone who reads it can grasp. 
• Plan for conflict:  You will inevitably have stakeholders with conflicting needs. Be proactive about how you will resolve issues and document this approach in your plan so that everyone is aware of it beforehand. 
• Publish it:  Your stakeholder management plan shouldn’t be a secret. Store it somewhere accessible and share it with stakeholders. Not only does this increase transparency, but it also helps ensure no stakeholders or key factors were overlooked. 

Sample stakeholder management plan template

It can be difficult to know where to begin when it comes to creating a stakeholder management plan of your own. Here is a simple template to refer back to when you need a helping hand. In this example, the project in question is a new email marketing campaign involving a number of stakeholders across the wider marketing team.

While this is a basic template to help you fill your own, it makes much more sense to use a collaborative work management platform like Wrike to involve all your stakeholders in a single source of truth on all projects.

How to plan a stakeholder management strategy with Wrike

It can be difficult to keep track of your stakeholder management plan and ensure it’s accessible to those who need it. Not only does Wrike help companies create this type of strategy, our powerful work management software gives you a single location for your stakeholder management plan so it can be located easily 

Because we know that creating these documents from scratch can be time-consuming, we’ve created a communication plan template guide  and a pre-built RACI template that are the perfect places to start when planning your stakeholder management strategy. 

With Wrike, you can plan and execute your stakeholder management strategy all in one place. Sign up for a free trial today and discover how it will improve your stakeholder management!

Jessica Everitt

Jessica is a former contributor of Wrike, specializing in project management topics.

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How to Create Stakeholder Management and Communication Plans

By Kate Eby | December 9, 2016

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Stakeholders include anyone with a vested interest in your project, as well as those who can influence the project’s budget and future. Every kind of stakeholder needs management and communication, ranging from an occasional “light touch” to detailed, frequent updates and checkins. Once you’ve identified your stakeholders and analyzed their level of interest and involvement, the next step is to make a strategic plan to both manage and communicate with them.

It’s helpful to create both your stakeholder management plan and stakeholder communication plan in an easily sharable, updatable, adaptable format, so that your plans can be easily adjusted as stakeholders leave or join the project. It can also be helpful for some projects to combine the two documents into one two-layer plan that can perform double duty.

In this article, we’ll explain how to create a stakeholder management plan and a stakeholder communications plan, and, if desired, how to combine them into one organic document that can help you manage all the key “touches” to your important stakeholders. 

Definitions: What Are Stakeholder Management and Stakeholder Communication?

For optimal results in any project, it’s key to identify your most important as well as extended stakeholders. Once you have identified your key players in a stakeholder matrix, you can weigh their respective needs and influence and begin to assess how to manage them. In larger projects, you may want to list “extended” stakeholders, who, under stakeholder theory, may include company employees, customers, vendors, and more. 

Stakeholder communication is a component of stakeholder management, though it is not the only one. Keeping the right people in the loop - at the right stages of your project, with the right amount of detail - is critical to making stakeholders feel valued, involved, heard, and appreciated. 

What Are Stakeholder Management and Stakeholder Communication Plans?

After you identify your key stakeholders (and extended ones if desired), it’s important to capture how best to manage them. A stakeholder management plan can be a simple grid or spreadsheet that lists the stakeholders along one axis and their points of interest and influence  along the other. In the individual boxes, note key milestones or deliverables that a stakeholder might have special interest in, as well as financial and emotional needs tied to the project. 

The project manager or account director may create and maintain the stakeholder management plan, but the plan would likely be shared among the project team, especially among those who meet regularly with stakeholders. In some cases, the plan is also shared with top managers. A stakeholder management plan is not typically shared with the actual stakeholders listed.

A stakeholder communication plan typically grows out of the information and findings in the management plan. It should list the key stakeholders who need to receive communications, including type, frequency, and detail. It may make sense to write the communications plan immediately after the management plan, or as two parts of one plan. Again, stakeholders will not typically have access to the communication plan, though over time may become accustomed to receiving the output of your plan - for example, their bi-weekly email update on the project mentioned in your plan.

Who Is a Stakeholder? Anyone with a Vested Interest in the Project

For more detailed information about stakeholders, read our stakeholder analysis and mapping article and our stakeholder theory article . To get started, here is a brief list of potential project stakeholders:

• External: The client, including the main client team, their managers, and their division director. In an agency environment, there are typically one or two stakeholders identified as a liaison from the client project team. On a company project, there will be a small number of critical leaders who are considered the key stakeholders.
• Internal: The project team, including contractors and vendors, as well as top management, resourcing directors, accounting department members, and others who want to see the project run efficiently and profitably.
• ‘Expanded’ Stakeholders: These may include the industry evangelists, customers, employees, manufacturers, vendors, environmental and other community activists, and more. Maintaining strong, consistent communications with all types of stakeholders ensures a smooth project with much more buy-in and better public relations.

Vivian Kloosterman, Managing Director at VK Consulting Environmental Engineers Ltd. in New Zealand, and founder of the online business school Continuing Professional Development, which offers courses on stakeholder management, says, “It’s critical to allow for evolution of your project - and the stakeholders. Some stakeholders may be deeply involved early on, and then ‘drop off’ in later stages, while others may join the project long after it’s underway.” 

For instance, Kloosterman adds, a building project may involve architects and city planners heavily at first, and much less so later on, while community environmental groups - who are also stakeholders under stakeholder theory - may come into play much later, as the building is erected and begins to function.

Factors to Consider in a Stakeholder Management Plan

Once you have identified all the types of stakeholders related to your project, you can begin to plan how to manage them over the lifecycle of your project. It’s time to ask key questions, and remember to be honest when assessing your stakeholders and their needs. 

Important Factors to Consider 

• Who are the stakeholders who have the most influence on your project? Typically, these people tend to be mostly on the client side and include their project team, the project sponsor, and the executive sponsor. 
• Which stakeholders will be most affected by your project? While this group can also include those on the client side, it may also include outside people. With a construction project , for example, those in the neighborhood, environmental activists, and potential residents of the final building could be in this group.
• How should you handle important people who actually won’t be considered stakeholders? Keep these people minimally involved since they could have the power to raise concerns or create roadblocks. These people can often be key leaders in their department, and who may need to be kept in the loop on certain things. 
• Who controls the resources? These stakeholders will likely be on the client side as well as on your agency’s side. You would go to these people if you need to request a scope or budget change or require more allocated resources from a certain discipline.
• What are the top motivations and interests of your stakeholders? When deciding the driving force of stakeholders consider:
• Who has a financial stake/interest?
• Who has an emotional interest (don’t underestimate this; if this project was someone’s “baby,” keeping them happy and in the loop is critical)?
• What are the top motivations for each stakeholder?
• Who are the biggest supporters of the project?
• Who are the biggest non-supporters or naysayers?

Creating a Stakeholder Management Plan

Once you’ve completed the exercises above, you should have enough information to begin addressing the management needs of each of your stakeholders and stakeholder groups. List all your stakeholders along one side of the grid (typically the far-left column), and the factors and needs and interests along the top. 

Stakeholder Management Plan Example In this scenario, we’re creating a stakeholder management plan for a building project for a wind farm for hydroelectric power for a regional electrical utility company.

Benefits of Creating a Stakeholder Management Plan When you use the opinions and influence of your most powerful stakeholders to help shape the project, you and the project will be better equipped for success. Best of all, you won’t waste precious time and resources communicating with those who simply don’t require the information.

In addition, your key stakeholders with the most weight and influence can help you gain resources, prioritize competing demands for resources or timelines, and clear potential roadblocks. So, keeping them happy and feeling positive about the project and its progress is critical.

Stakeholder Communications: Who Needs to Know What and When?

As you identify the stakeholders and how to manage them most efficiently, you will also start to have the beginnings of your communications plan. Begin with a simple grid filled out with the stakeholders you’ve ranked, and jot down what kinds of communications they would expect and need.

When you are creating this plan, be mindful that while high-level executives want to be kept in the loop on high-profile projects, their time is also quite valuable. A good project manager knows how to balance communications that keep someone important feeling informed, but not bogged down with granular details. Likewise, “extended” stakeholders don’t need to have access to everything about the project, as long as they feel they are being heard and have input. Here is a sample plan:

Download Stakeholder Communication Plan Template - Microsoft Word

The grid could include rounds of copy and design review as well as daily, weekly, or monthly updates on progress, budget, and upcoming tasks. 

You can share the plan with your clients by saving the grid to a shared drive, and use an automated tool to send email updates to the right people at the right frequency. You might do a weekly high-level report for the clients via a personal email from the project manager. Internal stakeholders likely will also want to see a burn report - hours forecasted vs. hours spent, and time likely to be spent in the near future.

Some stakeholders (like the executive leads) may need a more formal, less frequent type of communication. Perhaps these stakeholders would prefer a monthly PowerPoint presentation that reports on the status, the features and updates that have been published, the input and feedback that’s been received to date, and so on. 

While working on the communications plan, it is also helpful to think about how risk and feedback from stakeholders is handled. If there is a timeline change in the wind-farm project, for instance, which stakeholders need to know that, and in what fashion? If a big storm causes damage, again, who needs to be apprised and how? The same goes for positive events, like a local environmental group releasing a statement saying it’s pleased with the wildlife protection guidelines the utility has put in place.

Benefits of a Stakeholder Communication Plan

Keeping strong, succinct lines of communication going throughout a project is key to ensuring it runs smoothly, and to the stakeholders’ feeling of confidence in you and the project. There are other key benefits to creating, and continuing, a stakeholder communication plan:

• No more winging it. You can always be prepared and two steps ahead in planning on how and when to communicate to your important stakeholders. A project manager that looks buttoned up and strategically planned is a project manager who inspires confidence from her stakeholders.
• You can anticipate needs of stakeholders and answer them before they become issues. If you have a regular cadence for communications, you already have a vehicle for sharing news and updates, and for reducing any risks or confronting any roadblocks.
• The plan can be shared so the whole project team knows who is learning what and when. Granting access to the whole team - perhaps even creating a section for project team notes and suggestions - gives everyone a feeling of ownership and accountability.
• The plan can be adapted to account for new stakeholders, shifting goals, new phases of the project, etc. The plan exists to help you and your project team inspire the utmost confidence from the stakeholders, so make sure to create an organic document.

Smartsheet Can Help You Create Stakeholder Management and Communication Plans

From simple task management and project planning to complex resource and portfolio management, Smartsheet helps you improve collaboration and increase work velocity -- empowering you to get more done. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed.

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time. Try Smartsheet for free, today.

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8 Steps to Write a Useful Internal Business Plan

Noah Parsons

7 min. read

Updated October 27, 2023

One of the best uses for a business plan is as an internal management tool to help you run your business. Now, this doesn’t mean that you need to write a full business plan that you’d traditionally use to pursue funding or pitch to investors. 

Instead, you can stick with a simple internal business plan model that keeps your document lean and easy to communicate. 

• What is an internal business plan?

An internal business plan keeps your team in sync with your business strategy, sets financial goals and budgets, and helps you track business performance so you can manage your business better. It’s a document that can easily be distributed across multiple communications channels, encourages employee engagement, and leans into uncovering issues and competitive advantages for your business.

To simplify the planning process, I recommend using a growth planning method to create an internal business plan. This method focuses on creating simpler, shorter business plans that are designed to function as internal communications plans. 

Growth plans are useful tools for internal business planning because they’re shorter, easier to update, and focused on succinctly describing your business strategy and financial goals. Think of it as a more robust and expansive executive summary that is meant to be analyzed, updated, and referenced consistently. 

What is the difference between an internal and external business plan?

An internal business plan is a tool that is built to serve you and make your business easier to manage. It’s the most effective business plan for internal analysis and should be the focal point for regular strategy sessions. Internal business plans are also frequently used to quickly explore new business ideas to determine if they are viable. 

The audience for an internal business plan is typically your business partners and employees. It is usually not shared beyond the close circle of people who are involved in your business on a day-to-day basis. With the limited audience and the focus on business strategy and management, internal business plans are typically less formal. They don’t include much of what is included in an external business plan. 

External business plans, on the other hand, are used to present your business to people outside of your organization. They are typically part of the fundraising process and are used to communicate your business strategies and your team to lenders and investors. External business plans are also used when you are buying or selling a business.

Because of the focus on educating outsiders about your business, external business plans usually include more detailed information about the team behind the business, the business history, and milestones that have been achieved. The format is also more formal and typically a little longer than an internal business plan.

• What is the internal purpose of a business plan?

Within your business, an internal business plan is used to define your business strategy, define who your ideal customers are, outline a more detailed marketing plan, and set your revenue goals and expense budgets.

Business planning is often associated with fundraising and startups, but there’s a lot of value for existing businesses to create a simple internal business plan:

Define your business strategy

A solid business strategy is key to a successful business. Defining your strategy also helps you maintain focus as you grow. Opportunities are always presenting themselves and as a business owner, you need to know what your strategy is and determine if an opportunity fits with your strategy or not. 

There are also times when you may want to shift your strategy, but this should be done thoughtfully. With a defined business strategy, you’ll have the guidance you need to steer your business in the right direction.

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Bring everyone up to speed

Especially as your team grows, it’s important that everyone works towards the same goal. It can be easy for different people to have different visions of where your business is going. These different visions can make your business less efficient as people work towards disparate goals. 

A good internal business plan keeps everyone aligned and can encourage more consistent and valuable employee communication. In many ways, it should be the document that helps define your internal communications strategy and even your company culture. After all, if you have a clear vision that you can easily convey, the easier it will be to engage and grow your business.

Focus on forecasts and performance

One of the most important management tools at your disposal is a budget and forecast. An internal business plan should always include a forecast that sets revenue goals for your business as well as budgets to guide spending. These forecasts and budgets should be reviewed on a regular basis, at least monthly, and refined as you go based on how your business is performing.

• How to write an internal business plan

Internal business plans are simple and direct. Ditch the long paragraphs and lengthy explanations and instead focus on simple bulleted lists and short sentences. Remember, the plan is for you, so make it a tool that you’ll use and update on a regular basis. Long documents are rarely updated while simple, one-page business plans are easy to keep current and use.

Here’s what to include in your internal business plan:

1. Value proposition

This is a one-sentence summary of your business. What value do you provide and to whom do you provide it? You can use this section to share your mission statement – it’s a reminder to your team about the overarching purpose of your business.

2. The problem and your solution

It’s often easy to describe the products and services you offer. However, the most important part of this section is defining the problem that you solve for your customers. A strong definition of the problems you help your customers solve will keep you focused as you explore new revenue opportunities.

3. Target market and the competition

As important as defining your customers’ problems is to define who your target customers are. This helps ensure that marketing campaigns are focused and that your team knows who you are trying to reach. You should also track the alternatives that your customers might consider and why they might choose a competitor over you.

4. Sales channels and marketing activities

Your internal business plan should define how you sell your products and services and what marketing channels you’ll use to reach your customers. If you’re expanding into new markets, your internal business plan can help you guide that activity.

6. Financial projections

At the very least, you’ll want to forecast sales and set expense budgets to guide your team. Beyond that, cash flow forecasts provide crucial insights into if and when you should consider raising additional funding or opening a line of credit to support business growth. 

7. Milestones

Milestones define key goals and objectives for your team. This isn’t about setting day-to-day tasks but setting a few key goals for the upcoming months. You’ll keep your team focused on the most important objectives by setting milestones.

8. Your team

If your team isn’t growing, you can skip this section for internal business planning. But, if a key part of your business strategy is to hire and add important team members, identify your key team growth areas.

• Make use of your internal plan

Are you ready to write a business plan? Download our One-Page Plan Template to start building your own internal business plan. This framework will help you produce a simple, one-page business plan that will outline your strategy and key milestones.

From there, build out your financial forecasts and budgets. Start with a sales forecast and expense budget so you can generate a complete profit & loss statement. Ideally, you should also create a cash flow forecast.

Now it’s time to put your plan to use. Start a regular plan review process with a monthly plan review meeting. Go over your strategy and compare your sales forecast and expense budget to your actual results.

During your monthly review, you can tweak your strategy and update your revenue goals to reflect what is actually happening in your business. You can also adjust expense budgets based on actual spending and changing revenue goals. If you find yourself needing a more robust tool to help with this analysis, you may want to check out LivePlan’s reporting and forecasting features .

The key to good internal planning is to keep it lightweight and nimble. A good internal plan is the tool you need to bring together smart strategic management and fiscal responsibility so you can grow your business. Still not convinced? Check out these key reasons why writing a business plan is worth your time .

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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Best Practices to Manage Internal Stakeholders

By Andre Wyatt on July 9, 2018 — 6 minutes to read

• External vs. Internal Stakeholders Part 1
• Challenges of Internal Stakeholder Management Part 2
• Handling Common Internal Stakeholder Issues Part 3
• Internal Stakeholder Management Best Practices Part 4

External vs. Internal Stakeholders

Stakeholders are people or entities who are influenced by or can be influenced by the actions of a business. They are usually in two categories: internal and external. External stakeholders  are individuals or groups who are outside of the company that is still impacted by the decisions and performance of the organization. These can include suppliers, customers, competitors, governmental agencies, and society as a whole. These groups hold a lot of weight concerning how the organization is seen and heard by the public. However, internal stakeholders have a broad influence that affects the culture and voice of the company before messages or products even reach the public at large.

Internal stakeholders include everyone inside of the company like employees, owners, the board of directors, managers and investors. These individuals are also known as primary stakeholders and know all the ins and outs of the profitability, performance, and significant decisions that will eventually reach the external stakeholders who are responsible for the company’s overall performance.

The Challenges of Internal Stakeholder Management

Each internal stakeholder has a different influence and role within the company, which causes each to have various interactions with each other. Additionally, because each has a purpose, these individuals have to manage each other strategically.

Board of Directors

It is imperative that business leaders assess the unique needs of each group and that challenges are well-managed.

Many management issues, regardless of the group involved, are related to a lack of communication and inefficient processes. There has to be a plan for engaging and retaining investors, meeting with the board of directors has to address the most critical issues that relate to them, and managers may need access to training that optimizes their impact with the employees they manage. A disruption in any of this makes it less likely the company as a whole will continue to be productive and in a position to strengthen their reputation with external stakeholders. It is vital that everyone is on the same page.

Handling Common Internal Stakeholder Issues

As stated above, because each group has a different role in the company, they also have unique challenges that have to be addressed to move forward.

Keep Investors Engaged

Use board meetings to create transparency, manage managers by seeing them in action, help managers meet the needs of employees, internal stakeholder management best practices, always allow time for questions in meetings, survey everyone, become an expert on conflict resolution.

Managing different groups within a company can be challenging, but with the right planning and strategy and an end goal of optimal productivity, everyone can feel heard and supported to fulfill their role in the company.

• The Ridiculously Simple Guide: Internal Knowledge Base
• 7 Actionable Techniques to Improve Internal Communication
• What Are OKRs and How to Set Them Correctly? [+ Best Practices]
• Why Asynchronous Communication Is the Future? Best Practices
• What Is Project Risk Management: Benefits, Challenges, Best Practices
• 7 Essential Functions of Best Intranet Software Tools [+ Best Practices]

Create a Strong Stakeholder Engagement Plan in 4 Steps

Learn how to create a powerful stakeholder engagement plan in 4 steps. Use it to improve communication and project outcomes for your business.

Do you find your business struggling to engage with all the people involved? Does your team seem like they are in perpetual panic or uncertainty? How about your clients, do they even know that you exist?

Clear (consistent) communication helps to keep everyone who's part of your project either excited or informed. Without good communication, you're not setting clear expectations. Collaboration can become haphazard, and project outcomes unpredictable. It's a problem that eats away at productivity, profitability, and, at times, your peace of mind.

Speaking of communications, the Project Management Institute (PMI) contends that it is  one of the four most essential power skills  that help project professionals fulfill organizational objectives. In this article, we'll review the four steps to creating a valuable and impactful stakeholder engagement plan.

What are stakeholders?

Stakeholders are individuals and groups with a vested interest and influence in your projects or what your company does. Their interest typically lies in the company's objectives, and overall prosperity. Some examples are investors, creditors, managers, and the employees who keep the wheels turning.

The relationship that stakeholders have with your business is a two-way street. It's a dynamic relationship where their actions and your project or business shape the outcome together.

Internal stakeholders vs. external stakeholders

Stakeholders may fall into two categories.

Internal stakeholders  are your in-house people and include:

• Project sponsors  provide the necessary support, resources, and guidance as they are typically the full or partial owner of the project.
• Project managers  help to keep the project on track, on time, and within budget by managing the project scope and team. They also get their hands dirty when needed to help push work through. They do the detailed project planning and track the work while also managing resources, clients and any other technicalities.
• Project team members  (or development team members) are the ones rolling up their sleeves and putting in the hard work to turn plans into reality.

‎On the flip side, external stakeholders are, well, external parties who have a stake in your project but aren't part of your project's “inner circle.” They include:

• Government bodies  enforce government regulations and policies that can impact your project.
• Contractors  from outside your organization, such as suppliers, contractors, or service providers.
• Customers  hold a unique (and valuable) position as external key stakeholders. Their satisfaction and feedback can make or break the success of your project or business.
• Competitors  are also external stakeholders, as they can help you learn about new trends.

Since stakeholders have the power to influence your business or projects, you'll need a plan for how to engage them.

What is a stakeholder engagement plan?

A stakeholder engagement plan (SEP) is like a communication playbook. It's a “living” document that contains the strategy for how you intend to communicate with your stakeholders.

The purpose of this document, alongside a  project plan , is to get financial and business support for a project or venture.

In practical terms, a stakeholder engagement plan is your communication compass.

While project teams usually create engagement plans before starting a project, they're not set in stone. Why? Because the level of engagement and interest can vary for each stakeholder, especially as the project progresses.

Since the SEP is a living document, you can adjust your communication approach to suit each stakeholder's unique needs and accommodate changes.

A SEP goes well with a stakeholder analysis.

The stakeholder analysis helps you identify project stakeholders and what makes them tick. The engagement plan guides your communication with them.

Key elements you need before writing a SEP

Because the SEP is usually created after the  project charter  (and other project artifacts), you can steal information from them to help with your SEP.

Here's a look at what you can use:

• Scope  gives you a clear understanding of what is included in the project (in scope) and what isn't (out of scope). This delineation can help you identify who the relevant stakeholders are and what their interests might be.
• Constraints are the limitations within which your project must operate. These constraints (such as  time  or cost) can affect your stakeholder’s expectations.
• Milestones  are significant points in your project's timeline. They can help you identify when and how to engage with stakeholders.
• Timelines  help you show stakeholders project progress vs. schedule and project plans.

4 steps to create an effective stakeholder engagement plan

Here are four easy steps to creating your own SEP. Note that these steps are similar to what you might do for stakeholder analysis and a  communication plan .

1. Identify your key stakeholders

Here's a Jedi mind trick—think of stakeholders as “customers”. And then group your customers into different categories. This will help you dive deeper into their expectations (and help you tailor your strategies accordingly).

Here are 4 buckets to group them by:

• Leaders  are the heavyweights whose influence can carry the most impact. They often include internal stakeholders like the project sponsor or external players like legal bodies.
• Contributors  are essential to the creation of your project or venture. They could be key suppliers, dedicated team members, or officials.
• Influencers  are individuals or groups who may become engaged, either in support or opposition, as your project advances. Examples might be the media, community associations, or other organizations.
• Paying Customers  are those who you serve (and pay for the product or service you produce).

2. Define the motives of your stakeholders

With each stakeholder now identified, you now need to define their motivations. It's important that you understand why and how they're involved in the project so you can plan how to engage them.

To do this, place yourself in their shoes and ask yourself these questions:

• For leaders, paying customers, and contributors:  What outcome are they expecting from the project? Does it align with the outcome you are going to provide? Are they looking for financial gain, improved efficiency or service, or maybe other benefits?
• For influencers:  What could prompt them to become involved? What would be their goal? To what extent would they be willing to support/oppose your project?

3. Rank them on an influence and interest grid

Next, prioritize your stakeholders on an influence/interest grid (which will help you see where to focus).

The grid is based on two factors:

• The amount of power they hold over the project
• The amount of interest they have in the project

‎With an influence/interest matrix, sort your stakeholders into one of these four categories:

• High interest and high influence  are the stakeholders that play the most significant role in your project. This category includes stakeholders from your "leaders," "paying customers," or "contributors." They require regular communication and education about your product, so they'll need the most engagement.
• High interest and low influence  may also come from your "leaders" or "contributors" categories, but they have less direct influence. While they may not drive decision-making, you should keep them informed and engaged.
• High influence and low interest  hold a lot of power, but your project doesn't interest them. They only need engagement from time to time.
• Low influence and low interest  are the passive stakeholders with the least power or interest. While you don't need to engage them often, it's good practice to send them occasional updates.

4. Create your engagement strategy

With your stakeholder analysis complete, you're ready to draft your engagement strategy.

Determine the most suitable channels to reach each stakeholder group. For instance:

• For leaders:  schedule regular face-to-face meetings or video conferences.
• For paying customers and contributors:  use a combination of email updates and team meetings.
• For influencers:  use social media, press releases, or community events.

Then, define how often you'll communicate with each group. For example:

• For high interest and high influence , use frequent updates, such as weekly or bi-weekly meetings.
• For high-interest and low-influence , monthly or quarterly updates will work.
• For high influence and low interest , use occasional updates like project milestones.
• For low influence and low interest , you can also update them about milestones or once the project is complete.

‎Use Motion to engage your stakeholders

Motion is an AI project management tool with features that can help you engage your stakeholders.

You can use Motion as your central communication hub for all your project-related information and engagement activities, including:

• Project status updates
• Project check-ins
• Internal stakeholder updates
• Milestones updates
• Deliverable updates

Motion's AI meeting assistant can lock in critical project team meetings. It integrates with most calendars (like Google Calendars) and finds the best time for all participants. If there is a change of plan, then it can reschedule the meetings automatically.

Sign up for your 7-day  free trial .

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Project Stakeholder Management

This guide to managing project stakeholders is presented by projectmanager, project & work management software trusted by 35,000+ users..

What Is a Project Stakeholder?

• Internal & External Stakeholders

What Is Stakeholder Management?

What is a stakeholder management plan.

• How to Make a Stakeholder Management Plan

Project Stakeholder Management Video

Stakeholder management process, how projectmanager helps with stakeholder management, stakeholder management templates & more.

A stakeholder is an individual, group or organization that is impacted by the outcome of a business venture or project. Project stakeholders, as the name implies, have an interest in the success of a project, and can be internal or external to the organization that is sponsoring the project.

Related: 10 Free Stakeholder Management Templates for Excel & Word

Stakeholder relationships can have a positive or negative influence on your project life cycle, so you’ll need to identify your key stakeholders and create a stakeholder management plan to meet their requirements.

Keeping track of your key stakeholders with project management software is a great way to stay on top of things and ensure your project stakeholders remain satisfied and productive.

Who can be a project stakeholder? That’s a long list. Some examples are as follows.

• Project manager and project team members
• External customers
• Contractors and subcontractors
• Government agencies

There are two main types of project stakeholders : internal and external. Let’s see how they differ from each other and how the stakeholder management process works for each stakeholder group.

Difference Between Internal and External Stakeholders

Internal stakeholders.

An internal stakeholder is someone whose interest in the project is directly related to being a part of the organization that is managing that project. Internal stakeholders want to achieve the business goals and strategic objectives of the project. They can be project managers, team members, sponsors, owners or even investors in the organization.

External Stakeholders

External stakeholders are those who aren’t directly related to the organization, but they’re important to the business or are impacted by the project to some extent. These are usually part of the supply chain, creditors or public groups.

Related: Stakeholder Analysis Template

Stakeholder management is a project management process that consists in managing the expectations and requirements of all the internal and external stakeholders that are involved with a project.

To do so, project managers need to create a stakeholder management plan, an important project management document that explains the stakeholder management strategies that will be applied during the project.

In addition, project managers use tools and techniques such as project status reports to facilitate the stakeholder management process through each phase of the project life cycle.

It must be noted that the term stakeholder management is not exclusive to project management, but can also be related to business administration. Stakeholder relationship management is as important for a small business as it is for large corporations, medium-sized companies and even non-for-profit organizations.

Similarly, both project management teams and businesses of any size can benefit from using a project planning software such as ProjectManager for stakeholder management. That’s because ProjectManager offers robust planning tools such as Gantt charts, kanban boards, calendars and task lists.

Pro tip: The project management institute (PMI) refers to stakeholder management as a “ project management knowledge area .”

ProjectManager has stakeholder relationship management tools and team collaboration features— Learn more.

As stated above, a stakeholder management plan is a project management document that identifies your project stakeholders and the strategies that you’ll use to communicate with them and meet their requirements.

A stakeholder management plan usually includes the following elements.

• A list of all your project stakeholders along with their basic information.
• A stakeholder map or power interest matrix.
• A stakeholder prioritization section.
• A stakeholder communication plan.
• A section describing the various stakeholder management strategies to be applied in different scenarios, such as conflict resolution or project status reporting techniques.

How to Make a Stakeholder Management Plan in 5 Steps

Even though each stakeholder management approach can be different depending on the needs of your project or business, there are some best practices to manage your stakeholder relations.

Follow these five steps to make sure all of your bases in the stakeholder management plan are covered.

1. Identify your Stakeholders

The first step to any good stakeholder management plan is proper stakeholder identification. Identify who are the key individual stakeholders and stakeholder groups to your project or business. Stakeholder theory can help you better understand who your stakeholders are and how they’re affected by your project.

2. Prioritize Your Stakeholders

Note which key stakeholders are going to have a bigger influence over the project, and at which stage their influence becomes lesser or greater. You can use an onion diagram for the stakeholder prioritization process. Always keep an eye on your key stakeholder relations as they can have the highest impact in your project or business.

3. Interview Your Stakeholders

Working with new stakeholders can be tricky at the start. Knowing your stakeholders is key to effective stakeholder relationship management. Because of this it’s advisable to interview your project stakeholders, here are some examples.

• What are your expectations for this project?
• Which deliverables are you most interested in?
• What do you hope this project changes after launch?
• How quickly do you see this project rolling out?
• If you feel positively about this project, why?
• If you have worries about this project, why?

4. Create a Power Interest Grid

A power interest grid or project interest matrix is a chart that allows you to determine the level of power and interest that your stakeholders have in the project. It’s a very helpful project management tool for stakeholder analysis.

You can identify these four stakeholder groups using this tool. They’re listed by importance.

• High power, high interest stakeholders
• High power, low interest stakeholders
• Low power, high interest stakeholders
• Low power, low interest stakeholders

5. Set & Manage Expectations

Clearly identify which stages each key stakeholder will be involved in, and timelines by which their feedback is needed. Create a stakeholder engagement or stakeholder communication plan to define how you’ll manage your stakeholder relations. As always, be realistic, transparent and honest at every project management phase.

Setting and managing expectations is perhaps the most important aspect of any stakeholder management plan. Stakeholders are invested in the project and will have a lot of opinions on how it should proceed, both good and bad. To learn more about how to manage stakeholder relationships, we’ve embedded a tutorial video below.

1. Stakeholder Analysis

Stakeholder analysis is not a single step but a series of steps, stakeholder identification, stakeholder mapping and stakeholder prioritization. In simple terms, stakeholder analysis could be defined as the process of understanding who your project stakeholders are, what’s their level of influence and involvement, and their importance for your project or business.

2. Stakeholder Identification

Stakeholder identification is the first step in the stakeholder analysis process and it’s the base of your stakeholder management plan. As its name implies, this process consists in identifying all your internal and external stakeholders. Later these stakeholders will be analyzed, prioritized and engaged.

Here are some things project managers should consider during the stakeholder identification process:

• Review project planning documents such as your project charter to help you find stakeholder information.
• Look for any government regulations that might apply to your project. If so, those government agencies become project stakeholders.
• Ask your team members and other internal stakeholders for feedback.
• Identify all the people and organizations involved with your supply chain.

3. Stakeholder Mapping

Now that you’ve identified all your internal and external stakeholders, it’s time to determine their level of interest and the power or influence they have over the project. This is an important step in the stakeholder relationship management process, because this is when you’ll get the information needed for stakeholder prioritization.

The easiest way to do this is to create a power interest grid or power interest matrix. Try ProjectManager’s free stakeholder map template.

4. Stakeholder Prioritization

Once you have a thorough list, you can begin prioritizing your project stakeholders by their importance to the project. Decide who among them have the most influence on the project and are affected by it.

Once you’ve determined who your key stakeholders are, it will be easier to keep an eye on them and determine which are the best stakeholder management strategies to keep them satisfied .

5. Stakeholder Engagement

Finally, with the information created in your stakeholder map, you figure out how to engage your stakeholders. This is the process by which you decide how you’ll communicate and interact with your project stakeholders.

This leads to a stakeholder communication plan that outlines the channels and frequency of communications between you and each project stakeholder. You can use our communication plan template to get started.

Stakeholder analysis, stakeholder management and stakeholder communications can be complex. It’s like a project grafted onto the existing project, which can make things more difficult. Luckily, you can use project management software tools to help you with the stakeholder management process. ProjectManager is an award-winning project management tool that organizes your projects, teams and stakeholders to help you work more efficiently.

1. Make a Schedule

Managing stakeholders begins with a schedule to capture activities and provide a space in which everyone can add their input.

Use our interactive Gantt chart to present stakeholders with the project plan and schedule. It can be easily shared and acts as a collaborative platform in which they can be included.

2. Assign Work

The schedule is just an abstraction until it’s executed. That requires the team’s involvement. Stakeholders don’t need to be involved in these details, but they should be able to view it.

3. Monitor Progress

Stakeholders are very interested in how the project is progressing. They don’t need you to get in the weeds with them, but broad strokes are important.

4. Balance Workload

Keep stakeholders happy by keeping your teams productive. You want to be able to monitor their workload and adjust it as necessary to keep them from burning out.

5. Print, Share, Gantt & Reports

Keeping stakeholders updated is the cornerstone of stakeholder management. You need a tool that gives you the flexibility to share data with stakeholders the way they want to get it.

6. Manage a Portfolio

Stakeholders are not only involved with individual projects, they can be invested in a program of like-minded projects or even a portfolio. You need a project management tool that can scale.

Track projects, programs or a portfolio with tools that give an overview of all the projects on one page. There’s also a portfolio dashboard and roadmap to align your portfolio to strategic goals.

For more resources on project stakeholders and stakeholder management, we’ve compiled a list of links for you to explore and instruct you further on stakeholder management.

• Stakeholder Management Templates Visit our blog to find out the free stakeholder management templates we have for you.
• Engaging Stakeholders for Project Success White Paper The Project Management Institute (PMI) has an informative white page on >stakeholder engagement and change management. It defines stakeholder engagement and offers a three-step approach that says you need to build a stakeholder map, prioritize and develop your project stakeholders.
• Stakeholder Management Books The Oxford University Press has a roundup of books on stakeholder theory compiled by stakeholder management professor Jeffery S. Harrison. Some of the best books on the topic are Strategic Management: A Stakeholder Approach by R. Edward Freeman, Stakeholder Theory and Organizational Ethics by Robert Phillips and Redefining the Corporation: Stakeholder Management and Organizational Wealth by James E. Post, Lee E. Preston and Sybille Sachs.
• Dealing with Difficult Stakeholders – Leadership & Management Training Video Leadership coach Susanne Madsen hosts this instructional video on how to manage difficult stakeholders. She talks about seven tips to get past conflicts with stakeholder groups. You can do everything from accepting stakeholder authority without engaging in a fight you can’t win to tailoring your communications to keep things from getting too emotional.
• Free Stakeholder Management Powerpoint This Powerpoint presentation from Imperial College in London goes through stakeholder management, the power interest grid, an empathy map and stakeholder management log. It’s a short but informative slideshow that covers the main points in managing stakeholder relations for your project or business.

As stated above, stakeholder relationship management is as important for a small business as it is for large corporations, medium-sized companies and even non-for-profit organizations. See how ProjectManager can help you improve your stakeholder engagement by taking advantage of this free 30-day trial today .

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What Is a Stakeholder?

Understanding stakeholders, example of an internal stakeholder, example of an external stakeholder, issues concerning stakeholders, stakeholders vs. shareholders.

• Stakeholder FAQs

The Bottom Line

• Investing Basics

What Are Stakeholders: Definition, Types, and Examples

A stakeholder is a person or group with an interest in an enterprise

Pete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom.

A stakeholder is a party that has an interest in a company and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors , employees, customers, and suppliers.

However, with the increasing attention on corporate social responsibility , the concept has been extended to include communities, governments, and trade associations.

Key Takeaways:

• A stakeholder has a vested interest in a company and can either affect or be affected by a business' operations and performance.
• Typical stakeholders are investors, employees, customers, suppliers, communities, governments, or trade associations.
• An entity's stakeholders can be both internal or external to the organization.
• Shareholders are only one type of stakeholder that firms need to be cognizant of.
• The public may also be construed as a stakeholder in some cases.

Investopedia / Laura Porter

Stakeholders can be internal or external to an organization. Internal stakeholders are people whose interest in a company comes through a direct relationship, such as employment, ownership, or investment.

External stakeholders are those who do not directly work with a company but are affected somehow by the actions and outcomes of the business. Suppliers, creditors, and public groups are all considered external stakeholders.

Stakeholder capitalism is a system in which corporations are oriented to serve the interests of all of their stakeholders.

Investors are internal stakeholders who are significantly impacted by the associated concern and its performance. If, for example, a venture capital firm decides to invest $5 million in a technology startup in return for 10% equity and significant influence, the firm becomes an internal stakeholder of the startup.

The return on the venture capitalist firm's investment hinges on the startup's success or failure, meaning that the firm has a vested interest .

External stakeholders, unlike internal stakeholders, do not have a direct relationship with the company. Instead, an external stakeholder is normally a person or organization affected by the operations of the business. When a company goes over the allowable limit of carbon emissions, for example, the town in which the company is located is considered an external stakeholder because it is affected by the increased pollution.

Conversely, external stakeholders may also sometimes have a direct effect on a company without a clear link to it. The government, for example, is an external stakeholder. When the government initiates policy changes on carbon emissions, the decision affects the business operations of any entity with increased levels of carbon.

A common problem that arises for companies with numerous stakeholders is that the various stakeholder interests may not align. In fact, the interests may be in direct conflict. For example, the primary goal of a corporation, from the perspective of its shareholders, is often thought to be to maximize profits and enhance shareholder value .

Since labor costs are unavoidable for most companies, a company may seek to keep these costs under tight control. This is likely to upset another group of stakeholders, its employees. The most efficient companies successfully manage the interests and expectations of all their stakeholders.

It is a widely-held myth that public corporations have a legal mandate to maximize shareholder wealth. In fact, there have been several legal rulings, including by the Supreme Court, brought on by other stakeholders, clearly stating that U.S. companies need not adhere to shareholder value maximization.

Shareholders are only one type of stakeholder . All stakeholders are bound to a company by some type of vested interest, usually for the long term and for reasons of need. A shareholder has a financial interest, but a shareholder can also sell their stock in the company; they do not necessarily have a long-term need for the company and can usually get out at any time.

For example, if a company is performing poorly financially, the vendors in that company's supply chain might suffer if the company limits production and no longer uses its services. Similarly, employees of the company might lose their jobs. However, shareholders of the company can sell their stock and limit their losses.

What Are the Different Types of Stakeholders?

Examples of important stakeholders for a business include its shareholders, customers, suppliers, and employees. Some of these stakeholders, such as the shareholders and the employees, are internal to the business. Others, such as the business’s customers and suppliers, are external to the business but are nevertheless affected by the business’s actions. These days, it has become more common to talk about a broader range of external stakeholders, such as the government of the countries in which the business operates, or even the public at large.

What Is an Example of a Stakeholder?

In the event that a business fails and goes bankrupt, there is a pecking order among various stakeholders in who gets repaid on their capital investment. Secured creditors are first in line, followed by unsecured creditors, preferred shareholders, and finally owners of common stock (who may receive pennies on the dollar, if anything at all). This example illustrates that not all stakeholders have the same status or privileges. For instance, workers in the bankrupt company may be laid off without any severance.

What Are the Stakeholders in a Business?

Stakeholders in a business include any entity that is directly or indirectly related to how a company operates, whether it succeeds, or if it fails. First the owners of the business. These can include actively-involved owners as well investors who have passive ownership. If the business has loans or debts outstanding, then creditors (e.g., banks or bondholders) will be the second set of stakeholders in the business. The employees of the company are a third set of stakeholders, along with the suppliers who rely on the business for its own income. Customers, too, are stakeholders who purchase and use the goods or services the business provides.

Why Are Stakeholders Important?

Stakeholders are important for a number of reasons. For internal stakeholders, they are important because the business’s operations rely on their ability to work together toward the business’s goals. External stakeholders on the other hand can affect the business indirectly.

For instance, customers can change their buying habits, suppliers can change their manufacturing and distribution practices, and governments can modify laws and regulations. Ultimately, managing relationships with internal and external stakeholders is key to a business’s long-term success.

Are Stakeholders and Shareholders the Same?

Although shareholders are an important type of stakeholder, they are not the only stakeholders. Examples of other stakeholders include employees, customers, suppliers, governments, and the public at large. In recent years, there has been a trend toward thinking more broadly about who constitutes the stakeholders of a business.

Stakeholders are individuals, groups or any party that has an interest in the outcomes of an organization. Stakeholders can be internal or external and range from customers, shareholders to communities and even governments.

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Stakeholder Roles and Responsibilities: A Comprehensive Guide

Dive into the intricate world of Stakeholder Roles and Responsibilities in Project Management and business operations. Discover how Stakeholders contribute to corporate ethics and growth, offering support and advocacy. Uncover their vital responsibilities, from strategic input to conflict resolution, ensuring the integrity and prosperity of your endeavours.

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Table of Contents  

1)  What is a Stakeholder? 

2) Different types of Stakeholders 

3)  Primary roles of Stakeholders 

4)  Responsibilities of Stakeholders 

5)  Conclusion 

What is a Stakeholder ?  

A Stakeholder is an individual, group, or entity with a vested interest in a project, organisation, or business. They can significantly impact or be impacted by the outcomes and decisions related to the project or business. They often have diverse interests, needs, and perspectives. Their involvement can range from financial investments to regulatory concerns. This makes them essential contributors to the success and direction of the endeavour. 

Understanding who the Stakeholders are and recognising their Roles and Responsibilities is crucial for effective Project Management and achieving organisational goals.

Different t ypes of Stakeholder s  

Stakeholder s can be broadly classified into two primary categories, each of which holds a crucial role in influencing project and business outcomes. Let's explore them below: 

Internal Stakeholder s  

Internal Stakeholders are generally individuals or groups within the organisation who are directly involved in or affected by the project or business. Let's explore some examples of internal Stakeholders:   

1)  Employees : These are the people working within the organisation, from the frontline staff to the executives. Their roles and well-being are closely tied to the success of the project or business. 

2)   Managers and leaders : Managers and leaders within the organisation who are responsible for decision-making and strategy implementation. This ensures that the project aligns with the company's goals. 

3)  Owners : In the case of a privately owned business, the owners have a significant stake in the organisation's performance and outcomes.  

External Stakeholder s  

External Stakeholders are individuals, groups, or entities outside the organisation that can influence or be influenced by the project or business. Let's explore some examples of external Stakeholders: 

1)  Shareholders : These are i ndividuals or entities who hold shares in a publicly traded company. This makes them financial Stakeholders with a keen interest in the organisation's financial success. 

2)  C ustomers : Those who purchase the products and services offered by the organisation and are critical for revenue generation and growth. 

3)  C ompetitors : Other businesses or organisations in the same industry who are external Stakeholders that can influence the organisation's competitive landscape. 

4)  R egulators and government entities : Government bodies and regulatory agencies that oversee the industry and enforce compliance with laws and regulations.  

Recognising and engaging with both internal and external Stakeholders is crucial for effective management, decision-making, and the overall success of any project or business. 

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Primary r oles of Stakeholder s  

The primary Roles of Stakeholders encompass a wide range of functions that are pivotal to the success and direction of a project or business. These Roles can be summarised as follows: 

1)   Managers : Stakeholder s actively participate in the strategic management of the organisation, shaping its overall direction, setting goals, and formulating policies that influence the entire operation. Their involvement is integral to defining the organisation's identity and mission. 

2)  Decision makers : Stakeholder s act as decision-makers. They offer valuable insights and expertise to guide choices related to project strategies, resource allocation, risk management, and overall governance. Their input ensures that decisions are well-informed and aligned with the organisation's goals. 

3)  Catalysts of growth : Stakeholder s are instrumental in propelling the growth and expansion of the project or business. They actively contribute to this process by providing crucial support, investments, and necessary resources. Their involvement is a driving force for progress and innovation. 

4)  Acting as corporate conscience : Some Stakeholders serve as a moral compass within the organisation. They ensure ethical and responsible business practices, holding the organisation accountable for its actions. Their vigilance upholds the principles and values that define the organisation's integrity. 

5)   Business supporter : Stakeholder s offer critical support in various forms, including financial investments, industry expertise, and advocacy. These forms of backing are essential for the sustained success and prosperity of the project or business. Their support extends beyond monetary contributions, encompassing the guidance and endorsement that help the organisation thrive. 

These primary roles exemplify the multifaceted nature of Stakeholders and underscore their immense significance in steering the course of any business or project. Their active participation and commitment to these roles contribute to the general success and sustainability of the endeavour at hand. 

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Responsibilities of Stakeholder s  

The Responsibilities of Stakeholders encompass a broad spectrum of actions and commitments that are indispensable for the smooth functioning of both projects and businesses. Let’s explore the Responsibilities of a stakeholder:

1)  Strategic input : Stakeholder s offer valuable insights, expertise, and guidance. They help define and refine the project's or organisation's strategic objectives. Thus, they ensure alignment with its intended goals. 

2)  Resource allocation : Stakeholder s actively participate in the allocation of resources. This includes financial, human, or technological resources that are crucial for the successful execution of the project or the efficient operations of the business. 

3)  Risk assessment : They identify potential risks and uncertainties that may impact the project or business. Stakeholders play an active role in risk management and mitigation strategies, making informed decisions to minimise adverse impacts. 

4)   Communication and collaboration : Effective collaboration is maintained through open lines of communication. This ensures that all parties involved, including other Stakeholders, project teams, and relevant entities, work together towards common objectives. 

5)  Compliance : Stakeholder s adhere to industry regulations, ethical standards, and legal requirements. This commitment ensures that the project or business operates within the boundaries of the law, maintaining its integrity. 

6)  Advocacy : Stakeholder s actively promote and support the project or business to external parties via their Stakeholder Management Plan . This involves advocating on behalf of the project to customers, regulatory agencies, investors, and the general public to build trust and support. 

7)  Feedback and evaluation : They provide constructive feedback and participate in the evaluation of the project's or business's performance. This process helps identify areas for improvement, fostering continuous growth and development. 

8)  Conflict resolution : Stakeholder s address conflicts and disputes that may arise among Stakeholders or within the project or business. They work diligently towards amicable resolutions, thereby fostering a harmonious and productive environment. 

Recognising and diligently fulfilling these Stakeholder Roles and Responsibilities is essential. Stakeholders play a constructive and impactful role in Project Management and business operations. Their active engagement and commitment to these duties are pivotal to the success and sustainability of the endeavour at hand. 

Conclusion  

We hope that after reading this blog, you have understood everything about Stakeholder Roles and Responsibilities. Understanding Stakeholders and their contributions is essential to achieving project success and business growth. They play various roles, manage organisations, make decisions, drive growth, act as the corporate conscience, and support business activities.  

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How to Lead in the Stakeholder Era

• Hubert Joly

The world is clearly facing multifaceted crises: a health crisis, an economic crisis, a societal crisis, a racial crisis, an environmental crisis, and rising geopolitical tensions. In the face of these challenges, there is a growing realization that business and society cannot thrive if employees, customers, and communities are not healthy; if our planet is on fire; and if our society is fractured. More and more leaders believe that creating a better and sustainable future requires corporations to serve all their stakeholders — not just their investors — in a harmonious fashion.

To make this transition, leaders need to evolve how they think about their mission and how they lead. According to Hubert Joly, the former chairman and CEO of Best Buy, we need leaders who, in both good times and bad, are keen to pursue a noble purpose, are ready to put people at the center of it, and are dedicated to creating an environment where every employee can blossom. In short, we need leaders who will embrace a declaration of interdependence. This is how we can create a more sustainable future. This is how business can be a force for good and do well by doing good.

Focus on purpose and people. The profits will follow.

In June 2020, I traveled back to Minneapolis for my final board meeting as chairman of Best Buy. As I drove down Hennepin Avenue, storefronts were boarded up on each side of the street. The city was still scarred from the riots and protests that followed the killing of George Floyd that May. Around the same time, forest fires were raging across Australia and, once again, in California. A few months earlier, a new virus had been identified, unleashing a pandemic that was spreading across the world.

• Hubert Joly is the former chairman and CEO of Best Buy, a senior lecturer at Harvard Business School, and the author, with Caroline Lambert, of The Heart of Business . He has been recognized as one of the top 100 CEOs in the world by Harvard Business Review, one of the top 30 CEOs in the world by Barron’s, and one of the top 10 CEOs in the U.S. by Glassdoor. Joly is now keen to add his voice and his energy to the necessary refoundation of business and capitalism around purpose and people.

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What are the key differences between internal and external stakeholders

• By Chris Taylor
• May 3, 2023
• Content Strategy

Table of Contents

Knowing who your stakeholders are and how to engage with them can make or break your success. Internal and external stakeholders play very different roles in your company, and understanding these differences is crucial for effective communication and decision-making.

In this article, I’ll explore the key differences between internal and external stakeholders and how they impact your business. You’ll also learn the importance of developing strong relationships with them and how to manage their expectations.

By the end of this article, you’ll have a clear understanding of who your stakeholders are, what they want, and how to effectively engage with them.

Definition of Internal and External Stakeholders

Understanding the differences between internal and external stakeholders is crucial in the success of a project. Here are the key differences between them:

Internal Stakeholders

• Definition: Internal stakeholders are individuals or groups within the organisation that have a direct interest in the project or are affected by its outcome.
• Examples: Employees, managers, project team members, company owners, and shareholders.
• Influence on project: Internal stakeholders generally have a high level of influence and control over the project since they are responsible for making decisions and executing tasks.
• Communication: Communication with internal stakeholders is usually more frequent and informal as they work closely together during the project.
• Responsibilities: Internal stakeholders are responsible for project planning, execution, monitoring, and closing.

External Stakeholders

• Definition: External stakeholders are individuals or groups outside the organisation who are also interested in the project or are affected by its outcome.
• Examples: Customers, suppliers, partners, regulators, competitors, and the community.
• Influence on project: External stakeholders may not have direct control over the project but can still have a significant impact on its success through their expectations, requirements, and feedback.
• Communication: Communication with external stakeholders is typically more formal and less frequent, often involving periodic updates and reports.
• Responsibilities: External stakeholders provide input, resources, or expertise to support the project, and their satisfaction is critical for the project’s success.

In summary:

Benefits of Understanding the Differences between Internal and External Stakeholders

One of the key benefits of understanding the differences between internal and external stakeholders is the ability to identify the groups that are interested in the business activities of an organisation and how they are influenced by the decisions and activities of the company.

By recognising these stakeholders, businesses can better understand their needs, priorities, and concerns.

This understanding can then assist organisations in making informed decisions, allocating resources, identifying risks, and creating stakeholder value.

For instance, by identifying the concerns and needs of internal stakeholders such as managers and employees, companies can allocate resources to areas that improve morale, job satisfaction, and productivity.

Similarly, by identifying the needs of external stakeholders such as customers and suppliers, businesses can make informed decisions about product development, marketing, and supply chain management.

Businesses that understand the differences between internal and external stakeholders are better equipped to engage with and maintain relationships with these groups. For example, they can create targeted strategies that take into account the respective concerns and needs of each stakeholder group. This can help cultivate trust and strengthen relationships, creating a more positive image of the company and facilitating long-term business success.

By considering potential stakeholder reactions to decisions and activities, companies can take steps to mitigate the risks that arise and respond promptly if issues do arise.

Being able to identify and respond to the needs of different stakeholders is imperative for businesses looking to achieve sustainable success.

10 ways to manage internal stakeholders

Managing internal stakeholders is an essential aspect of successful project management. Here are some steps to effectively manage internal stakeholders:

• Identify stakeholders: Begin by identifying all relevant internal stakeholders, such as project team members, managers, executives, and other departments involved in the project.
• Analyse stakeholder needs and expectations: Assess the needs, expectations, and priorities of each stakeholder to understand their perspective and what they expect from the project.
• Establish clear communication channels: Develop and maintain open and transparent communication channels with all internal stakeholders. Determine the best method of communication for each stakeholder, whether it’s through meetings, emails, or phone calls.
• Develop a communication plan: Create a communication plan that outlines how often you will provide updates, what information will be shared, and the format in which it will be presented. This ensures that everyone remains informed about the project’s progress and any changes that occur. Learn how to create a stakeholder engagement plan that resonates with both internal and external stakeholders.
• Engage stakeholders in decision-making: Involve internal stakeholders in the decision-making process to encourage their buy-in and support for the project. This can help to address concerns and ensure that everyone’s needs are considered.
• Manage conflicts and resolve issues: Address conflicts and issues promptly to maintain a positive working environment. Encourage open discussions and work towards mutually agreeable solutions.
• Monitor stakeholder satisfaction: Regularly assess stakeholder satisfaction throughout the project to ensure that their expectations are being met. Make adjustments as needed to keep stakeholders engaged and supportive.
• Provide training and support: Offer training and support to internal stakeholders, as necessary, to help them fulfill their roles in the project effectively.
• Celebrate successes: Recognize and celebrate milestones and achievements to maintain motivation and foster a sense of team spirit among internal stakeholders.
• Post-project evaluation: After the project is completed, conduct a post-project evaluation to gather feedback from internal stakeholders. This can help identify areas for improvement and strengthen stakeholder relationships for future projects.

10 steps you can take to manage external stakeholders

Managing external stakeholders is crucial for a project’s success and maintaining a positive relationship with those outside your organisation. Here are some steps to effectively manage external stakeholders:

• Identify stakeholders: Start by identifying all relevant external stakeholders, such as customers, suppliers, partners, regulators, and the community.
• Analyse stakeholder needs and expectations: Understand the needs, expectations, and priorities of each external stakeholder to determine how the project may impact them and what they expect from it.
• Establish clear communication channels: Develop and maintain open and transparent communication channels with external stakeholders. Determine the best method of communication for each stakeholder, such as meetings, emails, or phone calls.
• Develop a communication plan: Create a communication plan that outlines how often you will provide updates, what information will be shared, and the format in which it will be presented. This ensures external stakeholders remain informed about the project’s progress and any changes that occur.
• Engage stakeholders in decision-making (when appropriate): Involve external stakeholders in the decision-making process when it is relevant to their interests or when their input could add value to the project. This can help address concerns and ensure their needs are considered.
• Manage conflicts and resolve issues: Address conflicts and issues promptly to maintain a positive relationship with external stakeholders. Encourage open discussions and work towards mutually agreeable solutions.
• Monitor stakeholder satisfaction: Regularly assess stakeholder satisfaction throughout the project to ensure that their expectations are being met. Make adjustments as needed to keep stakeholders engaged and supportive. Discover why engaging stakeholders is the key to successful projects .
• Build and maintain trust: Establish credibility and trust with external stakeholders by being responsive, reliable, and transparent in all communications and interactions.
• Adapt to changing circumstances: Be prepared to adapt your project and communication strategy to accommodate changes in the external environment, such as new regulations, market shifts, or stakeholder priorities.
• Post-project evaluation: After the project is completed, conduct a post-project evaluation to gather feedback from external stakeholders. This can help identify areas for improvement and strengthen stakeholder relationships for future projects. Related: Discover how to set KPIs and objectives that align with the interests of different stakeholders.

Types of Internal Stakeholders

Internal stakeholders are individuals or groups that are directly involved and have a direct relationship with a business. They have a direct impact on the business, and in turn, the business has an impact on them. The types of internal stakeholders vary and can include employees, management teams, board of directors, shareholders, vendors or suppliers, and business owners, partners, or founders.

Understanding the needs and concerns of these stakeholders is important for businesses to effectively manage their affairs, allocate resources, and make informed decisions. In this section, I’ll explore each type of internal stakeholder in more detail.

Employees are an integral part of any business and as such, they are considered internal stakeholders. Their role within the organisation is to contribute to the overall success of the business by completing assigned tasks and carrying out necessary operations.

As internal stakeholders, employees have a direct interest in the success or failure of the business. If the business is performing well, employees have a greater sense of job security, whereas if the business is struggling, there may be concerns about job stability.

One of the key interests of employees is job stability. They want to know that their jobs are secure and that they can rely on their positions to provide for themselves and their families. This interest is directly tied to the success of the business. If the business is performing well, employees tend to feel more reassured about job stability. Conversely, if the business is struggling, there may be concerns about layoffs and job insecurity.

In addition to job stability, employees are also interested in receiving decent wages and bonuses for their efforts. They want to feel like their hard work is being recognized and valued by the employer. This can include regular pay increases, profit sharing, or other special bonuses and incentives.

Employees can also have a direct influence on the tasks they perform. They have the ability to contribute new ideas or suggest improvements to existing processes. This can help to increase productivity and improve the overall success of the business. For this reason, employees need to have confidence in their employer. They want to know that their input is valued and will be seriously considered.

For these reasons, it’s important for businesses to prioritise the needs and concerns of their employees.

Did you know: harmonising stakeholder interests can lead to successful digital transformation .

Management Team

The management team refers to those individuals responsible for overseeing and directing the company’s business activities and decisions. Unlike employees, who are typically lower-level stakeholders, the management team wields a significant amount of authority and control over the company’s operations.

The role and responsibilities of the management team are varied and complex, but ultimately centre around the goal of ensuring the success of the business. This involves making strategic decisions about product development, marketing, financial management, and other critical areas of the company’s operations. The management team must have a clear understanding of the company’s goals and mission in order to effectively steer the ship.

A major concern for the management team is the company’s business performance, as it directly impacts their personal incentives and interests. The performance of a company is often reflected in its stock prices, making it a key area of focus for the management team. A strong performance can attract investors and keep shareholders happy, whereas a weak performance can lead to decreased investor confidence and financial instability.

To aid in their responsibilities, the management team often relies heavily on management accounting. This discipline involves analysing financial data and providing insights that can help inform business decisions.

By providing accurate and timely information about the company’s financial performance, management accounting enables the management team to make informed decisions that can help steer the company towards success.

Learn how digital leaders manage digital transformation while balancing the interests of different stakeholders.

Board of Directors

The Board of Directors is a group of individuals who are responsible for overseeing the management team and making strategic decisions that affect the operational aspects of the company. One of their key responsibilities is to ensure the company’s success and profitability, which includes managing the financial health and market capitalisation of the company.

Their role extends beyond just the company’s financial health, as they also have a responsibility to ensure that the company’s activities align with the interests of its stakeholders, including investors, employees, customers, and the wider community. As such, the Board of Directors must adopt a stakeholder-oriented perspective, balancing the interests of various stakeholders and ensuring that their actions do not cause harm to these parties.

The Board’s main interests lie in satisfying shareholders and owners, expanding the company’s products and services, and maintaining the satisfaction of the management who have taken over the company’s operations. To achieve these goals, they must make strategic decisions that consider the long-term impact of their actions on the company’s stakeholders and their interests.

It is important to understand the Board’s influence on stakeholders, including the potential impact of their decisions on various groups. For example, decisions related to company expansion can affect employees, customers, and other stakeholders, necessitating collaboration and consultation with these parties to minimise any negative effects.

Their interests lie in satisfying investors and owners, expanding the company’s offerings, and maintaining management satisfaction. It is important to understand the Board’s influence on stakeholders and how they can work collaboratively to achieve mutually beneficial outcomes.

Shareholders

Shareholders own a portion of a company, and their primary role is to provide financial support to the business in exchange for a share of its profits. Unlike other internal stakeholders such as employees and management, shareholders do not participate in the day-to-day operations of the company. However, their investment in the company gives them the right to vote on important business decisions, such as board appointments and major mergers or acquisitions.

When it comes to making business decisions, it’s important to prioritise the interests of shareholders. Companies that fail to do so risk alienating their investors, damaging their reputation, and losing out on future investments. This means that business decisions often prioritise profits and growth over other considerations, such as employee welfare or environmental impact.

Having shareholders in a company can bring a range of potential benefits, such as increased access to capital, the ability to offer stock options as a form of compensation, and the ability to leverage voting rights to advocate for beneficial changes within the company. Shareholders can also help to stabilise a company’s finances through their purchase and ownership of stocks, which increases the company’s capitalisation and overall financial health.

Vendors/Suppliers

Vendors or suppliers play an important role in the success of a business. They provide the raw materials, logistics, and professional services that are essential for a company to operate effectively. Maintaining good relationships with vendors or suppliers is necessary to ensure that the company receives the necessary products and services on time and of good quality.

Good relationships with vendors or suppliers are built on mutual interests. For a business, maintaining a reliable supply chain is essential to delivering its products or services to its customers on time and at a competitive price. Vendors or suppliers, on the other hand, require consistent business from the company to maintain their own operations and financial stability. Both parties benefit from a well-executed partnership that is based on trust and mutual benefits.

However, there are also risks involved when dealing with vendors or suppliers. Late deliveries or inferior quality products can have a negative impact on the company’s reputation and bottom line. It is important to address these risks by maintaining open lines of communication with vendors or suppliers, setting clear expectations for delivery and quality, and having contingency plans in place in case of issues.

Maintaining good relationships with them is essential for a company’s success and requires mutual interests and trust. Different types of vendors or suppliers contribute to various aspects of a company’s operations, and risks associated with them should be addressed proactively to ensure the best possible outcomes.

Business Owners/Partners/Founders

Business owners, partners, and founders are important internal stakeholders in a company. They are directly involved in making important decisions that affect the overall direction of the business. Their decisions may have a direct impact on the business environment, as well as on other stakeholders, such as employees, customers, and creditors.

One of the primary responsibilities of business owners, partners, and founders is to ensure the success of the business. This involves setting goals, developing strategies, and overseeing the day-to-day operations of the company. They have a moral obligation to act in the best interest of the business and to ensure that all of its activities are conducted ethically and responsibly.

Business owners, partners, and founders are interdependent with other stakeholders, such as the management team and the board of directors. They work closely with these groups to ensure that all decisions are made with a comprehensive understanding of the business’s goals and objectives. The management team may handle the day-to-day aspects of the business, while the board of directors provides guidance and advice on long-term strategic planning.

In general, the roles and responsibilities of business owners, partners, and founders can vary depending on the specific circumstances of each situation. However, their impact on the success of the business cannot be overstated. They play an integral role in the decision-making processes of a company and have a direct influence on its overall direction and success.

Types of External Stakeholders

External stakeholders are individuals or groups who have an interest in the business affairs of a company but are not directly involved in its daily operations. These stakeholders may have a direct or indirect relationship with the company and may have a direct or indirect impact on its success.

There are various types of external stakeholders, including customers/clients, creditors/lenders, competitors, intermediaries, and government agencies. In the following paragraphs, I will discuss each type of external stakeholder in more detail.

Customers/Clients

Customers and clients are some of the most important external stakeholders for a business. As the primary beneficiaries of a company’s goods or services, they have a vested interest in the quality, quantity, and price of the products offered by the company.

Due to their direct interaction with the company, customers are often the most vocal and visible external stakeholders. Their feedback and opinions can be powerful drivers of a business’ success or failure. This makes it especially important for businesses to consider their customers’ needs and desires when making important business decisions.

The choices a company makes with regards to product quality, quantity, and price can have a direct impact on their customers. For example, if a company decides to lower the quality of their products, it could lead to a decrease in customer satisfaction and loyalty. On the other hand, if a company decides to increase the quantity of their products, it could lead to an increase in customer satisfaction and loyalty.

Their direct involvement in a business’ daily operations and strong influence on product development and delivery make it imperative for businesses to carefully consider their preferences and needs when making important decisions.

Creditors/Lenders

Creditors and lenders play an important role in the financial well-being of a business. They provide necessary funding to help the business grow and expand. Their interest in the organisation lies in the repayment of the debt, along with the interest charged for providing the funds. They are considered external stakeholders because they do not directly work for the business but have a vested interest in its financial performance.

There are different types of creditors and lenders ranging from family and friends to big banks. Family and friend creditors offer loans to help a business get started, while banks and financial institutions offer commercial loans, lines of credit, and other types of financing. Trade credit is also a form of debt financing where the business procures raw materials, supplies, and goods on credit from suppliers. Creditors and lenders typically require collateral or a personal guarantee to secure the repayment of their debt.

Financial accounting provides reports that are beneficial to external stakeholders, especially creditors. Financial reports such as the balance sheet and income statement provide a snapshot of the financial health of a business. Creditors can use this information to assess the ability of the business to repay its debt, the level of risk involved, and to make informed decisions about lending to the business.

With the help of financial accounting, businesses can provide accurate and reliable information to their creditors, which in turn helps to maintain a healthy relationship between the two parties.

Competitors

Competitors are a crucial external stakeholder for any business. They influence the industry, and their actions can have a tremendous impact on a company’s decision making. As such, businesses must monitor their competition closely to stay informed of the latest trends, understand consumer behaviour, and gain a comparative advantage.

There are two main types of competitors: direct and indirect. Direct competitors offer a similar product or service and target the same customer-base. Indirect competitors, on the other hand, provide substitutes or alternatives that have the potential to sway consumer decision making. Ignoring both types of competition can pose significant risks to a business, including loss of market share and decreased revenue.

It is essential for businesses to create a competitive analysis to gain insights and effectively manage risks. Competitor analysis allows companies to Analyse their competitors’ strengths and weaknesses, identify market trends, and assess potential risks. With a comprehensive analysis, businesses can determine their competitive advantage and make informed decisions to stay ahead of their competitors.

By conducting a competitive analysis, businesses can gain valuable information on emerging market trends, new technologies, and changes in consumer behaviour. Armed with this knowledge, companies can develop and implement effective marketing strategies, differentiate their products and services from the competition, and ultimately gain a competitive advantage.

Failing to monitor the competition can lead to a loss of market share and decreased revenue. By conducting a competitive analysis, businesses can gain valuable insights, manage risks, and stay ahead of the competition.

Intermediaries

Intermediaries are important external stakeholders in the business ecosystem, and they play a vital role in facilitating transactions between businesses and customers or suppliers. A middleman acts as an intermediary between two or more parties, promoting smooth negotiations and helping to build and maintain positive relationships.

Intermediaries can be individuals or organisations, such as agents, brokers, or distributors, who serve as the go-between, connecting businesses with their customers or suppliers, respectively. This not only helps businesses to reach a wider audience but also enables them to obtain the necessary raw materials and secure the products and services required for their operations.

To describe intermediaries effectively, it is essential to identify the different types of intermediaries that exist and their respective roles. For example, agents typically represent and negotiate on behalf of a business to its suppliers or clients. Brokers, on the other hand, facilitate transactions by finding buyers and sellers and arranging deals between them. Distributors serve as middlemen between a business and its customers, ensuring that products and services reach the market.

In conclusion, understanding the differences between internal and external stakeholders is crucial for any business or organisation. Internal stakeholders have a direct interest and involvement in the company, while external stakeholders have an indirect interest but can still have a significant impact on the business.

By identifying and prioritising the needs and concerns of both types of stakeholders, businesses can create a more effective communication and decision-making process. Remember, both internal and external stakeholders are essential to the success of any organisation, so it’s important to value their input and work towards creating a positive relationship with them.

Want to l earn more about stakeholder management ? Check out our other articles on the topic.

Stakeholder management – how it can lead to successful project outcomes

The secret to achieving successful project outcomes lies in the art of stakeholder management. It’s not just about managing stakeholders, it’s about orchestrating a symphony of collaboration and communication. It’s about building relationships and fostering trust with those who have a vested interest in your project.

To truly excel at stakeholder management, you must be a master of influence and persuasion. You need to understand the motivations and needs of each stakeholder and tailor your approach accordingly. It’s about finding common ground and aligning everyone’s interests towards a shared vision.

But it’s not just about managing expectations, it’s about exceeding them. It’s about going above and beyond to deliver exceptional results. It’s about being proactive and anticipating the needs of your stakeholders before they even realize it.

In the world of stakeholder management, there are no shortcuts. It requires dedication, perseverance, and a relentless focus on building strong relationships. It’s about being a strategic thinker and a skilled communicator.

When you master the art of stakeholder management, you unlock the key to successful project outcomes. You create an environment where collaboration thrives and everyone is invested in the project’s success. It’s a recipe for achieving greatness and leaving a lasting impact.

So, if you’re looking to take your project to the next level, look no further than our stakeholder management services. We’ll make sure your project is a resounding success, with all stakeholders aligned and working towards a common goal.

Chris Taylor

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Multi-Stakeholder Roundtable passes a Joint Action Plan to manage and protect water resources in Chile’s Salar de Atacama Basin

• For the first time in the Salar de Atacama, around 20 stakeholders from indigenous communities, mining, tourism, agriculture, and authorities, are working on joint solutions to water challenges
• The stakeholders have joined a Multi-Stakeholder Roundtable (Mesa Multiactor) and agreed on a Joint Action Plan
• 14 measures are currently being implemented by the Mesa Multiactor, for the purpose of managing and protecting water resources in the Salar de Atacama basin
• The stakeholders are aiming to institutionalize the Mesa Multiactor to ensure their work continues

With this Joint Action Plan, participants of a Multi-Stakeholder Roundtable (Mesa Multiactor) have agreed on a framework for natural resource management in the Salar de Atacama basin in Chile. The Action Plan was one of the crucial goals of the project funded by the Responsible Lithium Partnership of BASF, BMW Group, the former Daimler AG (now Daimler Truck AG and Mercedes-Benz Group AG), Fairphone, and Volkswagen Group.

For the first time in the Salar de Atacama, around 20 organizations (among them representatives of indigenous communities, civil society, academia and the public and private sectors) are collaborating.

The ecosystem of Salar de Atacama is fragile and there is lack of scientific knowledge on the impacts of lithium mining and other economic activities. Potential risks derived from water and brine table shifts could affect ecosystems and local livelihoods. Water availability emerged as the dominant topic in the Mesa Multiactor, thus taking a central role in the project. The protection of valuable habitat and the Salar’s unique biodiversity are further key concerns.

The local participants have agreed on 30 measures in the Action Plan, including the creation of a cadastre of water rights holders on the river basin, geological and hydrological mapping, campaigns on the challenges of water scarcity, provision of drinking water to local communities, and recycling of grey water. Several of the actions are already completed, others are underway or prioritized for the future.

Furthermore, the Mesa Multiactor has addressed scientific uncertainties surrounding water in the Salar by screening and making available more than 300 studies and reports through a public and accessible library.

The participants have extended the project until February 2025, at the same time aiming to institutionalize the roundtable to ensure their work continues beyond that time.

For more information on the Mesa Multiactor and its initiatives, visit www.mesamultiactor.cl/ .

About Responsible Lithium Partnership

Responsible Lithium Partnership (April 2021-February 2025) is a project in the Salar de Atacama (Chile) commissioned by BASF, BMW Group, Daimler Truck, Fairphone, Mercedes-Benz Group and Volkswagen Group. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is the implementing partner in Chile.

At BASF, we create chemistry for a sustainable future. We combine economic success with environmental protection and social responsibility. Around 112,000 employees in the BASF Group contribute to the success of our customers in nearly all sectors and almost every country in the world. Our portfolio comprises six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care and Agricultural Solutions. BASF generated sales of €68.9 billion in 2023. BASF shares are traded on the stock exchange in Frankfurt (BAS) and as American Depositary Receipts (BASFY) in the United States. Further information at www.basf.com .

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