Stakeholders Explained: Definition, Types, Examples

Every organization affects people and groups beyond its shareholders. Those people and groups are its stakeholders — and understanding who they are, what they want, and how much influence they have is essential for good decisions. A clear map of stakeholders helps leaders balance priorities, anticipate pushback, and design projects that actually land. This article defines stakeholders in plain terms, breaks down common types (internal vs. external; primary vs. secondary), shows simple mapping tools you can use on any initiative, and closes with practical examples across business, nonprofits, and government.

What is a stakeholder? (core definition and how it differs from a shareholder)

At its simplest, a stakeholder is any person or group with an interest in an organization’s decisions or activities. International guidance on social responsibility (ISO 26000) uses nearly that exact phrasing, defining a stakeholder as an “individual or group that has an interest in any decision or activity of an organization.” That keeps the lens wide enough to include employees, customers, suppliers, lenders, communities, and regulators — not just investors.

Business primers echo the same idea: a stakeholder is anyone who affects or is affected by a firm’s outcomes, whether or not they own shares. This includes internal groups (employees, managers) and external groups (governments, NGOs, local residents). By contrast, a shareholder is a specific type of stakeholder who owns equity; all shareholders are stakeholders, but not all stakeholders are shareholders.

Project-management standards use a similar working definition tailored to initiatives: stakeholders are individuals or organizations “actively involved in the project, or whose interests may be positively or negatively affected” by it. That language underlines a practical truth — people who can help or hinder delivery are stakeholders you must account for early.

In reporting and governance, stakeholders show up in frameworks that stress engagement and value creation. For example, the IFRS Foundation’s material around integrated reporting notes that stakeholder engagement helps companies understand effects and dependencies, informing what’s relevant to value for providers of financial capital. The point isn’t to customize reports for every stakeholder, but to understand impacts well enough to explain how the business creates long-term value.

Types of stakeholders (internal vs. external; primary vs. secondary)

Internal stakeholders work within or own part of the organization: employees, managers, executives, and owners. Their incentives are close to day-to-day operations (pay, safety, career growth, culture, profits). External stakeholders sit outside the org boundary but still care deeply: customers, suppliers, creditors, regulators, local communities, and media. Both groups can influence results — internals through execution and decision rights, externals through purchasing, policy, financing, or public voice.

Another useful split is primary vs. secondary. Primary stakeholders are directly affected by outcomes (e.g., employees whose jobs or pay change; customers relying on service; lenders exposed to repayment). Secondary stakeholders are indirectly affected but still influential (e.g., community groups, NGOs, media, industry associations). This lens helps you separate those who bear immediate consequences from those who shape the context.

On projects, typical primary stakeholders include sponsors, project teams, and users; secondary stakeholders often include adjacent departments, procurement, and external observers (auditors, agencies). You’ll adjust the list by sector and initiative scope, but the logic holds: identify who’s impacted, who can influence, and who sets rules.

Because labels vary across sources, keep your definitions explicit in documents and kickoff meetings. Write down who counts as internal vs. external in your context, and define “primary” by concrete impact (budget, timeline, jobs, safety, compliance). That shared language makes later trade-offs simpler to explain and defend.

Practical signpost: if a group can stop your plan, they’re not “secondary” in terms of engagement effort — treat them as high priority even if their exposure is indirect.

Finally, remember that one party can wear multiple hats. A founder-CEO is an employee, manager, and shareholder; a community member might also be a customer and local official. Your map should reflect roles, not just names.

How to map stakeholders (power–interest grids and engagement levels)

A quick way to prioritize is the power–interest grid. List all stakeholders, then plot each one by (1) how much power they have over your success and (2) how much interest they have in the outcome. The matrix yields four groups: Manage Closely (high power/high interest), Keep Satisfied (high power/low interest), Keep Informed (low power/high interest), and Monitor (low power/low interest). This simple tool keeps your time and updates focused where they change results.

In projects, professional bodies recommend pairing the grid with concrete engagement actions: schedule regular one-to-ones with “manage closely,” give early previews to “keep satisfied,” publish concise status updates for “keep informed,” and maintain a light-touch watchlist for “monitor.” As stakeholder positions shift (new sponsor, new regulation), you re-plot and adjust.

For ongoing businesses, apply the same grid to major decisions (pricing changes, plant openings, product sunsets). It won’t replace strategy, but it will surface where you need data, where you owe outreach, and where silent resistance is likely. Add a column for “stance” (supportive, neutral, opposed) to anticipate friction.

Tip for teams: agree on evidence behind each placement (e.g., contract clauses, regulatory authority, budget ownership). That reduces subjective debates and helps new members read the map quickly.

Two cautions. First, influence isn’t only formal — coalitions of “low-power” groups can quickly gain leverage, especially with media or regulators. Second, a box on a grid is not a relationship; combine mapping with regular, two-way engagement if you want cooperation when it counts.

Document the grid in your project brief or decision memo, keep owners for each stakeholder group, and revisit at key milestones. Small, consistent updates build trust and reduce last-minute surprises.

Examples across sectors (corporate, nonprofit, and government)

Corporate product launch. Internal stakeholders include engineering, marketing, sales, support, and finance; external stakeholders include customers, key suppliers, logistics partners, and regulators. Boards of directors oversee strategy and risk on behalf of shareholders and broader stakeholders, while boards of trustees play similar roles at certain institutions. Mapping is crucial because a single overlooked regulator or supplier dependency can derail timing.

Nonprofit health program. Internal stakeholders include program staff and the executive team; external stakeholders include beneficiaries, local health departments, community leaders, and donors. Primary stakeholders are the people served and the employees delivering care; secondary stakeholders include media and advocacy groups that can shape perception and funding. Clarifying who approves protocols (public health) vs. who provides grants (donors) guides engagement.

Public-works project. A city upgrades water infrastructure. Internal stakeholders: project office, procurement, and elected officials. External stakeholders: residents, businesses along construction routes, environmental agencies, contractors, bondholders, and local media. A power–interest grid reveals that bondholders and regulators are high power (funding and permits), residents are high interest, and businesses along the route may be high interest with seasonal spikes — so timing and mitigation plans get tailored accordingly.

Software transformation. A firm replaces its ERP system. Internal primary stakeholders: finance, operations, IT, and end users. External stakeholders: vendor, systems integrator, auditors, and banks relying on reporting. Project-management guidance stresses early identification and continuous stakeholder analysis because support can flip during cutover if training or reporting lags.

Investor reporting. Management engages investors and creditors through financial statements and calls. The integrated reporting perspective emphasizes engaging stakeholders to understand effects and dependencies, then communicating what’s material to value creation — primarily for providers of financial capital — while recognizing other stakeholders’ interests. That framing helps balance broad expectations with clear ownership of financial disclosures.