Stakeholders are people or groups who are connected to a business and can influence or be affected by its actions. They are essential for the success of any business. Stakeholders can be divided into three types: internal stakeholders, external stakeholders, and strategic stakeholders.
Internal stakeholders are people who work within the business, like employees, managers, and owners. They directly contribute to the business’s success. External stakeholders are people outside the business, like customers, suppliers, government officials, and the local community. They are affected by the company’s actions. Strategic stakeholders are important people or groups, like investors and business partners, who play a big role in making decisions and shaping the future of the business.
Four Aspects of Stakeholder Analysis
1. Identifying Stakeholders
The first step is to find out who the stakeholders are. This includes all the people or groups who are connected to the business, such as employees, customers, suppliers, investors, and government bodies. Identifying all stakeholders ensures that no one important is missed.
2. Stakeholder Mapping
After identifying the stakeholders, they are grouped based on their power (how much they can influence the business) and interest (how much they care about the business). A common tool used is the Power-Interest Grid:
- High power, high interest: Focus on these stakeholders first.
- High power, low interest: Keep them satisfied.
- Low power, high interest: Keep them informed.
- Low power, low interest: Monitor them lightly.
3. Prioritizing Stakeholders
Once stakeholders are mapped, they are ranked based on their importance. Stakeholders with high power and interest, like investors or regulators, are the most important and need more attention. Stakeholders with less power or interest are still considered but require less focus.
4. Engaging with Stakeholders
The final step is to create ways to work with stakeholders effectively. For example, key stakeholders may need regular meetings, detailed updates, and involvement in decisions. Less-involved stakeholders can be kept informed through newsletters or occasional updates. This helps build trust and solve any problems early.
In summary, stakeholders are people who play a big role in shaping a business. Stakeholder analysis helps a business understand who they are, what they need, and how to work with them. This leads to better decisions, fewer problems, and stronger relationships.