What are internal and external stakeholders?

By Aashna. Haryani2 min read · Posted Mar 31, 2025

27
Views

Stakeholder image Dylan Gillis, 2018, via Unsplash

What are stakeholders?

A stakeholder is an individual who has a vested interest in the company. A stakeholder can impact or be impacted by an organization’s day-to-day functioning, operations, and overall performance. Organizations can have internal and external stakeholders.

Who are internal stakeholders?

Internal stakeholders can be considered as those whose interest aligns directly with the actions and decisions taken by the organization. Some examples of internal stakeholders are:

  • Employees: Interested in job security, career growth, working conditions, and benefits
  • Managers and Executives: Focused on strategic goals, business performance, and operational efficiency
  • Owners and Shareholders: Concerned with profitability, return on investment, and long-term sustainability

Who are external stakeholders?

External stakeholders are individuals who are people or groups outside the organization that may be indirectly impacted by the organization’s decisions and actions. External stakeholders can also be known as secondary stakeholders, as they do not work directly with the company. Some external stakeholders are:

  • Customers: Those that buy or use products sold by the organization
  • Suppliers: Those that supply the company with necessary goods and services
  • Regulatory authorities: Government agencies or bodies that are responsible for making regulations
  • Business partners: Other businesses, organizations, or institutions that work together with the company on specific projects or initiatives

Why are stakeholders important?

Stakeholders are important because they help improve organizational engagement, thus leading to success, reputation, and sustainability of the organization. Here are a few other reasons why stakeholders play a significant role across companies:

  • Influence in decision making: Stakeholders are responsible for making tough yet important decisions that shape the future of the organization. Stakeholders also have years of expertise leading to the identification of potential risks, challenges, and roadblocks, allowing the organization to make informed decisions.
  • Access to resources: Stakeholders like investors, suppliers, distributors offer the organization with resources critical to its success, such as funding, information, etc.
  • Innovation and improvement: Stakeholders, internal or external, have years of expertise and experience relevant to the field of the organization, making them treasure troves of fresh perspectives, new technologies, and innovative ways of problem solving.
  • Building trust and reputation: Organizations that actively engage with their stakeholders tend to build stronger relationships and trust. This can enhance an organization’s reputation and credibility, making it easier to attract customers, investors, and partners.

Stakeholders are essential to the success of any organization. Providing valuable insights, resources, and expertise that drive informed decision-making, innovation, and growth are of utmost importance. By actively engaging with both internal and external stakeholders, companies can build trust, enhance their reputation, and ensure long-term sustainability.

About The Author

Aashna. Haryani

9
Articles
3094
Total Views
3
Total Likes
0
Total Shares

See more posts by Aashna. Haryani

Comments

Your generosity fuels innovation and drives success!

Our resources are assembled by a team of entrepreneurs who donate their time and energy to Pitch Labs to ensure that entrepreneurial resources are available to everyone. Unfortunately, we can't avoid major expenses such as website hosting fees. To ensure our resources remain free to access and use, we rely on donors who are able and willing to give back. Consider donating to be a part of the Pitch Labs mission today!

More in Financial


Financial » Funding

Where To Find Resources To Benefit Your Small Business

by Callie Leff ·Apr 7, 2025

21
Views

Whether it’s grant opportunities or educational seminars, it can be difficult to know where to start your search for small business resources. Read this article for some great jumping off points! Read more

Financial » Economics

What is the Consumer Confidence Index?

by Warren Patterson ·Apr 2, 2025

25
Views

You'll learn what the consumer confidence index means and how to measure it. Also, you'll discover the factors affecting consumer confidence, and where to get information about current standing and trends. Read more

Financial » Accounting

What does a business's year look like (each quarter)?

by Zainab Anjum ·Feb 28, 2025

40
Views

This article offers key insights to shape a successful business year, quarter by quarter. Dive in to understand the essential elements that drive performance throughout the fiscal year. Read more

Financial » Taxes

What is a Tax ID or exemption number?

by Asad Awan ·Feb 26, 2025

274
Views

Learn about tax IDs and exemption numbers. Learn how to claim valuable tax benefits and conduct business smoothly. Read more

Recent articles


Operations » Management

Mastering Data-Driven Decision-Making for Your Business

by Christina Molitor ·Apr 23, 2025

9
Views

Data-driven decision-making relies on inputs such as customer preferences, edge analytics, and AI, prioritizing evidence over intuition and helping automate the decision making process. Read more

Basics » Business Plans

How to describe your product or service in your business plan

by Warren Patterson ·Apr 21, 2025

15
Views

A good product or service description is important in business as it helps drive traffic, generate leads, and build sales. This article looks at what’s included in a product or service description. Read to learn more. Read more

Technology » Applications

AI and the Future of Work: Will AI replace jobs in the future?

by Tonya Parker ·Apr 18, 2025

76
Views

AI’s impact in the workplace goes beyond taking jobs. Here’s what the experts say about how future generations will coexist with AI at work. Read more

Operations » Project Management Tools

What is Merchandising in Business?

by Sunnie Souza ·Apr 16, 2025

10
Views

Merchandising involves the mechanisms a business uses to advertise and sell their products. Merchandising can be done both online, or in person. Read more

Join Our Community


Looking for something else? Get your questions answered in our free online learning community!

Entrepreneurial Resources


Jumpstart your next business with our free resource library.

Disclaimer


Our organization cannot give out official legal/fiscal guidance. All articles are written by volunteers and it may be beneficial to contact professionals to assist your understanding of the information and to guide your action. Pitch Labs bears no responsibility for the results of actions taken based off of article content or any other form of assistance given.