Many of us think that Stakeholders are the same as that of shareholders, but this is not true they both are very different from each other. A Stakeholder is constrained to a company for prevalent needs and some type of interest onto it, whereas a Shareholder has a financial interest and can buy and sell his shares and thus are not a permanent member of that firm and can get off this system anytime they want.
Here is an article that will aid you to figure out Stakeholder in a more profound manner
How to understand Stakeholders in brief?
The Stakeholder is a party that has a need and interest in a company and can affect or be affected by the business.
Stakeholders can be due to Internal or External relations.
- Internal Stakeholders are that person who has a direct interest in that firm or company and makes direct contact or relations with employees, owners, or investors of that company. Let us take an example of students who study in an institution and has direct relations with them, if the institution decides to take an exam in November rather than in December than students will be directly affected by it.
- External Stakeholders are that persons who do not directly work with the company nor have direct relations with them but are affected due to certain decisions made by the company. Let us take the example of parents who are not in direct contact with the institution in which their child is learning but are affected by the rise in the Institutional fee made by the Institution.
What are the problems countenances by the Stakeholders?
The most common problem face by a Stakeholder is to identify the Stakeholder on time and thus need a lot of time; this is due to the poor management strategies used by the company and thus need time and effort into it.
The general problems faced by the Stakeholders are:
- Expectations made by the Stakeholder are not clear and do not sound good to the company.
- Independent Interpretations made by the Project manager breaks the relations and thus the stakeholder seeks out his/her trust out of the firm.
- Stakeholder Review meetings are set up at the odd time and thus need more time and effort to manage and get the basic updates.
- Bad News first – Good News is given later to the Stakeholders and thus it disturbs their moral values and has to appraise the risks indeed.
What are the roles of Stakeholders?
Stakeholders play an important role in managing and have the capability to deal with everyone within the system. The main roles played by the Stakeholder are:
- Defining The Service – Stakeholder plays a vital role in defining and evaluating the services and has to be in direct contact with the management team. The management must approach the Stakeholder for this purpose.
- Deploying the service – Stakeholders are given the report and summary about the project and are also updated directly by the team. Stakeholders are directly involved in the service set up by the organization.
- Service operation and Monitoring – The Stakeholder are mostly affected by the operations and thus it becomes essential to make Stakeholders aware of these and take their views and concerns to get the preferred output of their choice.
In this way, it is seen that the role of Stakeholder is important and essential for the organization and thus good relations must be carried out with the Stakeholder by the management.
Types of Stakeholders
Users as Stakeholder:
These are those types of people who will use the product out by the Organization, they play an important role in defining the benefits from the output. They are a very important type of Stakeholder and directly influence the organization.
Example: let’s take the example of a customer who buys the product of a certain company, in this case, the Stakeholder will be the costumer.
Governance as Stakeholder:
These are the Group of Stakeholders who are mostly interested in the activity within the project and thus have direct contact with the management team. This sort of Stakeholder can be an Auditor, Regulator, Health & Safety executives, etc.
Example – Let’s take an example of an Auditor whose job is to monitor and get audits about the project and make their way towards the right approach from their experience.
Influencers as Stakeholder:
They are those Stakeholders who are given special roles and power in the decision making of a project indeed and have the ability to change the decision made by the management. Influencers as Stakeholders can belong to trade unions and body groups and thus can impact the project if their needs aren’t fulfilled.
Example – Let’s take an example of the workers union, they have the power to stop the chain of the system and thus will impact the management very badly.
Providers as Stakeholder:
This category of Stakeholder contains mostly the supplier and the vendors who are meant to be the soul of the firm and thus are given more preference. This group of Stakeholders also includes business partners, temporary contractors, catering staff, etc. that play a role in providing the basic resources to the Organization.
Example – Let’s take an example of a Labor Contractor who provides labor to the firm, those, in this case, the Stakeholder is Labor Contractor.
Stakeholders are said to be the soul of the project and without them, the management team is incomplete and thus plays a vital role in the decision-making body and also serves the Organization differently.