Stakeholder Groups

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STAKEHOLDER GROUPS 3

A stakeholder constitutes a person or a group of individuals in anorganization or an entity who directly influence the operations ofthe entity or are affected by the outcomes of the organization’sperformance. Initially, stakeholders were said to be the individualsor groups of individual who were ensured the existence of anorganization. However, this definition was expanded to include allthe people who are affected by the organization’s achievements.Stakeholders are divided into three broad categories namely theenvironmental stakeholders, core stakeholders, and strategicstakeholders.

The core stakeholders in an organization are the individuals withinthe entity and who directly engage in the financial transactions ofthe business. Core stakeholders are usually affected directly by theorganization’s performance, and they include the customers,suppliers, stockholders, creditors, and employees. The environmentalstakeholders in an organization are the members of the communitywithin which an organization operates, and who are concerned aboutthe decisions made by the organization regarding the environment.Lastly, the strategic stakeholders are the individuals, especially inthe management team, who ensure that the objectives and expectationsof the other stakeholders are met by effectively managing theinternal and external environments.

The placement of individuals or groups into the various stakeholdercategories depends on a number of factors. The role that astakeholder plays will determine which group he or she belongs. Forinstance, individuals who are interested in the environmental impactof the organization’s decisions will usually fall under theenvironmental stakeholders. Another factor would be whether thestakeholders are acting from within or outside the organization.Lastly, the impact that an organization has on the stakeholder willaffect the category that they belong. For example, individuals whoare directly affected by an organization will belong to the corestakeholders’ category.