The role of stakeholders in business

'Stakeholder.' This is one of the translations of the concept stakeholders… and what does this have to do with the business world? What is the importance of stakeholders in business? 

Many people may have never heard of this idea, of interest groups, but the truth is that it is not a new concept. In 1983, stakeholders were first referenced in academia at the Stanford Research Institute, to focus on those groups, beyond corporate executives, that interact with the business and whose actions could affect the company in one way or another. 

That original definition has evolved and adapted to modern times. So much so that it is an essential concept for professionals involved in project management and who operate in strategic areas within a corporate structure. The keys to truly understanding what stakeholders are and how they affect companies are outlined below.

Who are the stakeholders?

Stakeholders are considered those groups that have some interest in a company and whose actions and stance towards it partly determine the company's functioning. Which stakeholders does this concept refer to? 

• Owners,
• Executives,
• Employees,
• Suppliers,
• Clients,
• Public Administration, 
• Competitors, 
• Environmental groups,
• Society,
• Media,
• Specific interest groups,

Depending on the sector in which a company operates and its business, some interest groups will be included and others not. From a strategic management perspective, it is important to identify them to effectively propose campaigns and actions tailored to each group.

The importance of stakeholders

Stakeholders have a significant impact on every organization, from small and medium enterprises to large corporations. In what way? What is the importance of engaging these interest groups to advance? Several key points: 

1. Company image projection. The opinions generated by these groups influence the corporate image, which in turn affects the company's health and business results.
2. Empowering people. Individuals and profiles defined as business interest types feel recognized when their input is considered in decision-making, building positive relationships for both parties. 
3. Improving the organization. Understanding the needs, pros and cons of decisions, concerns, and experiences of these groups can lead to organizational improvement. 
4. Increased productivity. With all stakeholders satisfied, more operations are carried out, more products are sold, and more services are consumed. The bottom line grows, which is crucial in any business activity.

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Types of stakeholders

Several classifications of stakeholders exist. The simplest and clearest is as follows, in relation to the types of stakeholders a company may encounter: 

• Direct interest stakeholders

This refers to groups directly linked to the business, such as… 

1. Company executives
2. In-house employees
3. Unions
4. External collaborators
5. Suppliers, whether products or services
6. Business clients

• Indirect interest stakeholders 

Another level of groups also important to the corporation, which in some way could relate to the brand and affect various aspects of it. 

1. Competitors 
2. Society as a whole
3. Consumer associations
4. Public Administration
5. Environmental groups
6. Media

As mentioned earlier, this depends on the sector and the business activity. For example, environmentalists or family associations may be included depending on the company's focus, which must be determined for strategic actions.

Differences between stakeholders and shareholders

There is a term that sometimes causes confusion and it is important to clarify: shareholders. What exactly are they? This concept refers to company stock owners and it is important to understand the difference between them and stakeholders. 

• Shareholders are business owners who, logically, always show interest and involvement in the company. 
• Stakeholders are interest groups in the corporation, but they do not necessarily have to be shareholders. Shareholders are one type of stakeholder. 
• Shareholders have invested in the company, hence their economic interest in its performance and returns. 
• Stakeholders’ interest is not exclusively economic. In fact, this may not be a factor for many profiles within the interest groups of a brand. 

It is important to note that a dissatisfied stakeholder can potentially harm a business. The extent of this depends on their influence within the company, highlighting why stakeholders are key in strategic management and corporate governance. 

Professionals aiming to build careers in this field should understand these concepts, as they are crucial for their work. At EAE Business School Barcelona, several programs address stakeholders, such as the Master in Project Management. The faculty guides students in case of questions about this or other related concepts throughout the course. 

We hope this article has helped clarify a key term in strategic management and corporate governance for business professionals.