What is a Stakeholder? Types, Examples and How to Manage

The world of business and its countless projects is undoubtedly complex, but ever wonder who really pulls the strings? The key players behind any business are the numerous Stakeholders who hold a vested interest in every project's success, challenge, and decision. Stakeholders are the heartbeat of progress for any business, be it investors funding your dream project or the communities reaping the benefits. This blog unravels What is a Stakeholder and outlines how to manage Stakeholders in detail. So read on and learn about these vital players that can drive your next project's success! 

Table of Content 

1. What is a Stakeholder? 

2. Types of Stakeholders 

3. How to Manage Stakeholders? 

4. Stakeholder vs Shareholder 

5. Conclusion 

What is a Stakeholder? 

A Stakeholder is any individual, group, or organisation with a vested interest in the success of a project, business or organisation. They may be internal or external and can influence activities directly or indirectly. Primary Stakeholders include Investors, Employees, Customers, and Suppliers. 

With a constantly growing emphasis on Corporate Social Responsibility (CSR), Stakeholders now cover communities, governments, and trade associations. Their support is crucial for achieving business and project success, making Stakeholder engagement a key aspect of any modern organisational strategy. 

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Types of Stakeholders 

Stakeholders can have various connections to an organisation or project, with the most common types including the following: 

Stakeholders Categories 

How to Manage Stakeholders? 

Effectively managing Stakeholders becomes straightforward when you adopt the right strategies. Below are essential steps every Project Manager should follow to build strong, productive Stakeholder relationships and ensure project success. 

1. Stakeholder Identification 

Identifying Stakeholders is crucial for project success, as unhappy Stakeholders can jeopardise the outcome. Unhappy Stakeholders can mean unsuccessful projects. Remember the following points: 

1. Begin identifying Stakeholders during the project charter phase 

2. Review the project charter for details on objectives, budget, schedule, sponsors, and management. 

3. Examine contracts to identify potential Stakeholders mentioned within the documents 

4. Assess environmental factors and other organisational ties to uncover additional Stakeholders.   

5. Consider regulatory bodies, such as the government, as Stakeholders if they influence environmental factors or compliance standards.   

6. Understand Stakeholder interests and ensure adherence to regulations to build strong relationships. 

Prioritise this step early to align Stakeholder expectations with project goals and foster long-term success. 

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2. Stakeholder Analysis 

After identifying your project Stakeholders, you can move on to the Stakeholder analysis phase. During this stage, understand their requirements and gather relevant information. Assess their level of involvement and influence on the project. This will aid you to develop effective communication strategies and prioritise them accordingly. 

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3. Prioritising Stakeholders 

One of the major challenges in Project Management is determining how to manage Stakeholders effectively. Adding to this already complex situation, there may be numerous Stakeholders, each needing different levels of attention. Prioritising them is essential, much like other tasks on your to-do list. 

Some Stakeholders will have a greater influence on project objectives or require more attention during specific phases. As you develop your project schedule, identify these key individuals and plan when to engage with them more closely during the project lifecycle. 

The Term Stakeholder and its History 

4. Stakeholder Engagement 

Stakeholder Management involves cementing positive relationships with Stakeholders by meeting their expectations and delivering agreed-upon objectives. However, trust and strong relationships aren’t given—they must be earned. You can achieve this through proactive communication and actively listening to Stakeholders’ needs. 

A practical approach is interviewing key Stakeholders, focusing on the most important ones. Additionally, consulting experts for background knowledge on specific fields or groups can help you ensure productive discussions during one-on-one conversations with Stakeholders. 

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5. Communication Plan for Stakeholders 

Like everything else in Project Management, there’s a process for this: 

1. Document Stakeholder Communications: Note their names and roles in the organisation they represent. Documenting every conversation you have with these key project partners is of utmost importance. 

2. Enforce Process: This lets Stakeholders know that their requests are subject to review and that you have a process to follow for formal requests. 

3. Provide Frequent Status Reports: Delivering regular and timely status reports for Stakeholders is crucial, but tailoring the reports to the audience is also important. Don’t forget to follow up with Stakeholders and pose questions to see if they have any feedback. 

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6. Stakeholder Map Template 

The following map template will help you keep track of the number of Stakeholders based on priority, 

Map Template for Stakeholder Management 

Stakeholder Vs Shareholder 

The key differences between a Stakeholder and a Shareholder is summarised below: 

Distinctions Between Shareholder and Stakeholder 

Stakeholder vs Shareholder 

1. Definition: 

   a. Stakeholders are individuals or groups with an interest in or impact on a business, such as employees, customers, suppliers, and the wider community. 

   b. Shareholders are individuals or entities that own shares in a company, making them part-owners. 

2. Main Focus: 

   a. Stakeholders are concerned with the overall performance of the organisation and its impact on their interests. 

   b. Shareholders focus on the company’s profitability and their return on investment. 

3. Scope of Involvement: 

   a. Stakeholders include a broad range of groups, such as regulators and partners 

   b. Shareholders are a specific group of stakeholders with a financial stake in the business. 

4. Influence on Decisions: 

   a. Stakeholders influence decisions around sustainability, ethics, and long-term goals. 

   b. Shareholders tend to prioritise decisions that maximise financial returns 

5. Relationship with the Organisation: 

   a. Stakeholders may not have ownership but still hold significant influence 

   b. Shareholders have ownership rights and a say in major organisational decisions 

Conclusion 

In conclusion, understanding Stakeholders—employees, customers, investors, or communities—is crucial for any organisation or project. Stakeholders influence outcomes, shape decisions, and drive success. By understanding What is a Stakeholder and identifying their needs, you can align goals, build trust, and ensure long-term success for your business. 

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