Who Are the Stakeholders in a Business?Best Full Guide (2026)

Who Are the Stakeholders in a Business?Best Full Guide (2026)

Last Updated: September 15, 2026

Disclosure: This article contains no affiliate links or sponsored content. It is independent educational content based on established business education resources and publicly available information.

Introduction

Every business decision affects someone. A price increase affects customers. A new hiring policy affects employees. A new facility can affect the surrounding community. Investors may be affected by changes in financial performance.

So, who are the stakeholders in a business?

Business stakeholders are people, groups, or organizations that can affect a business or are affected by its decisions, activities, or performance. Stakeholders can be inside the company, such as employees and managers, or outside the company, such as customers, suppliers, government agencies, and local communities.

Understanding stakeholders helps business owners and managers make better decisions, communicate with the right groups, and recognize how business activities can affect different people.

In this guide, you will learn:

• What a stakeholder is
• Who the main business stakeholders are
• The difference between primary and secondary stakeholders
• Whether employees and customers are stakeholders
• What an external stakeholder is
• How communities become stakeholders
• The difference between stakeholders and shareholders
• How businesses can manage stakeholder relationships

Table of Contents

1. What Is a Stakeholder in a Business
2. Why Stakeholders Matter
3. Primary vs. Secondary Stakeholders
4. Are Employees Stakeholders?
5. Are Customers Stakeholders?
6. What Is an External Stakeholder?
7. How the Community Becomes a Stakeholder
8. Corporate Stakeholders vs. Shareholders
9. How to Manage Stakeholders Step by Step
10. Common Stakeholder Mistakes to Avoid
11. Frequently Asked Questions
12. Conclusion

What Is a Stakeholder in a Business?

A stakeholder is an individual, group, or organization that can affect or is affected by a business and its activities.

Stakeholders can have different types of interests. An employee may depend on a business for wages and job security. A customer may depend on the company for products or services. An investor may be concerned with financial returns. A local community may be affected by employment opportunities, traffic, environmental effects, or changes to a business location.

 OpenStax explanation of business stakeholders

The modern concept of stakeholder theory is strongly associated with R. Edward Freeman’s book Strategic Management: A Stakeholder Approach, originally published in 1984. Freeman’s work helped establish stakeholder relationships as an important part of strategic management. Cambridge University Press page for Strategic Management: 

A simple way to identify a stakeholder is to ask:

Can this person or group affect the business, or can the business affect them?

If the answer is yes, that person or group may be a stakeholder.

Why Stakeholders Matter

Understanding stakeholders is important because businesses do not operate in isolation.

A company depends on employees to perform work, customers to purchase products or services, suppliers to provide necessary goods or services, investors to provide capital, and government agencies to establish and enforce applicable rules.

Stakeholders can also influence a company’s reputation and operations.

For example:

• Customers can change their purchasing decisions.
• Employees can influence productivity and workplace culture.
• Suppliers can affect costs and product availability.
• Investors can influence financial decisions.
• Regulators can require businesses to meet legal standards.
• Communities can raise concerns about local business activities.

OpenStax identifies customers, employees, shareholders, suppliers, communities, government, media, and other groups as stakeholders that can have an interest in a business.

Businesses therefore need to understand not only who their stakeholders are but also what each group needs, expects, and can influence.

Primary vs. Secondary Stakeholders

The terms primary stakeholders and secondary stakeholders are commonly used to organize stakeholder groups, although the exact classification can vary depending on the framework being used.

Primary Stakeholders

Primary stakeholders generally have a direct relationship with the business and may have a significant effect on its ability to operate.

Examples can include:

• Owners and shareholders
• Employees
• Customers
• Suppliers
• Managers
• Business partners

These groups may be directly involved in the company’s operations, financial relationships, or exchange of products and services.

Secondary Stakeholders

Secondary stakeholders may have a less direct relationship with the company but can still affect or be affected by business activities.

Examples can include:

• Government agencies
• Media organizations
• Trade associations
• Local communities
• Advocacy groups
• The general public

The distinction should not be treated as a fixed ranking. A stakeholder’s importance can change depending on the situation, the company’s industry, and the specific decision being made.

Primary vs. Secondary Stakeholders Table

The most appropriate level of attention depends on the stakeholder’s interests, influence, and relationship with the particular business decision.

Are Employees Stakeholders?

Yes. Employees are stakeholders in a business.

Employees have a direct interest in the organization because their employment can affect their income, working conditions, career development, and job security.

Employees can also affect the business through:

• Productivity
• Customer service
• Product quality
• Workplace culture
• Innovation
• Employee retention
• Company reputation

Employees can therefore be both affected by business decisions and capable of influencing business performance.

OpenStax describes employees as internal stakeholders and explains that they can play important roles in the success of an organization.

Are Customers Stakeholders?

Yes. Customers are stakeholders because they have a direct relationship with businesses and are affected by the products and services those businesses provide.

Customers influence businesses through their purchasing decisions, reviews, feedback, referrals, and expectations.

For example, customers may influence:

• Product design
• Pricing
• Customer service
• Product quality
• Marketing
• Business reputation

A business that consistently ignores customer needs may lose sales or damage its reputation.

Customers can also have other relationships with a company. For example, a customer may become a repeat buyer, leave reviews, recommend the company to others, or stop purchasing because of a poor experience.

What Is an External Stakeholder?

An external stakeholder is a person or group outside the organization that can affect or be affected by the business.

Examples include:

1. Customers
2. Suppliers
3. Government agencies
4. Local communities
5. Investors who are not involved in daily management
6. Media organizations
7. Trade associations
8. Advocacy groups

External stakeholders may not work for the company, but they can still have a significant influence on its operations.

For example, a government agency may establish requirements that a company must follow. A supplier may affect the availability of important materials. Customers can influence revenue through their purchasing decisions.

It is also possible for a stakeholder to have multiple roles. For example, someone could be an employee, customer, and shareholder of the same company.

How the Community Becomes a Stakeholder

A local community can become a stakeholder when business activities affect the people living or working in that area.

For example, a new business facility may create jobs and increase local economic activity. At the same time, it could affect traffic, noise, water use, land use, or other community concerns.

A 2018 Michigan example involving Nestlé’s proposed increase in groundwater withdrawals illustrates how community concerns can become part of a business and regulatory discussion. Michigan Public reported that the Michigan Department of Environmental Quality received more than 80,000 public comments opposing the proposed increase.

 Michigan Public report on the Nestlé Michigan water withdrawal case

The example demonstrates why businesses should understand the interests of communities affected by their operations.

Community stakeholders may be interested in:

• Local employment
• Environmental effects
• Traffic and infrastructure
• Public safety
• Noise
• Local economic development
• Transparency and communication

Corporate Stakeholders vs. Shareholders

A shareholder is a person or organization that owns shares of a company.

A stakeholder is a broader term referring to people or groups that have an interest in, can affect, or are affected by the business.

This means that shareholders are stakeholders, but not every stakeholder is a shareholder.

For example, an employee may have no ownership in a company but still be a stakeholder because the company’s decisions affect the employee’s job and income.

OpenStax similarly defines a shareholder as a type of stakeholder while recognizing that stakeholder groups extend beyond shareholders.

How to Manage Stakeholders Step by Step

Effective stakeholder management starts with identifying the groups that matter to a particular business decision.

Step 1: Identify the Stakeholders

Make a list of everyone who can affect or be affected by the business.

For a small business, this could include:

• Employees
• Customers
• Suppliers
• Owners
• Investors
• Government agencies
• Local community members

Step 2: Understand Their Interests

Different stakeholders care about different outcomes.

Employees may care about compensation and working conditions. Customers may care about price and quality. Investors may focus on financial performance. Communities may focus on local effects.

Understanding these differences makes communication more useful.

Step 3: Assess Influence and Interest

Consider how much influence each stakeholder has over the decision and how strongly they are affected by it.

A simple high-interest and high-influence framework can help a business decide where more communication may be necessary.

Step 4: Communicate Clearly

Use communication methods that fit each stakeholder group.

For example:

• Employees may receive internal updates.
• Customers may receive emails or website announcements.
• Investors may receive financial reports.
• Community members may receive public notices or attend meetings.

Step 5: Review Stakeholder Relationships

Stakeholder interests can change as a business grows or changes direction.

Review the stakeholder list when the company:

• Launches a new product
• Opens a new location
• Changes suppliers
• Expands into a new market
• Changes its workforce
• Makes a major operational decision

 What Does a Business Consultant Do?

A business consultant may help organizations analyze operations, identify problems, and develop strategies, which can include considering the needs and interests of different groups connected to the business.

Common Stakeholder Mistakes to Avoid

Businesses can make several common mistakes when dealing with stakeholders.

1. Focusing Only on Shareholders

Shareholders are important stakeholders, but they are not the only people affected by a business.

2. Ignoring Employees

Employees can have a direct effect on productivity, customer service, quality, and company culture.

3. Ignoring Customer Feedback

Customers provide information about what is working and what needs improvement.

4. Communicating Only During Problems

Regular communication can help businesses identify concerns before they become larger issues.

5. Forgetting External Stakeholders

Government agencies, communities, suppliers, and other external groups can affect business operations even when they are not part of the organization.

6. Treating Every Stakeholder the Same

Different stakeholders have different interests and levels of influence. Communication should be appropriate to the specific relationship.

Frequently Asked Questions

What is a stakeholder in a business?

A stakeholder is a person, group, or organization that can affect or is affected by a business, its decisions, or its activities. Examples include employees, customers, shareholders, suppliers, communities, and government agencies.

Who are the main stakeholders in a business?

Common stakeholders include owners, shareholders, employees, customers, suppliers, managers, investors, government agencies, local communities, and other groups affected by the company’s activities.

Are employees stakeholders in a company?

Yes. Employees are stakeholders because business decisions can affect their income, working conditions, job security, and career opportunities. Employees can also influence company performance.

Are customers considered stakeholders?

Yes. Customers are stakeholders because they are affected by the products, services, prices, and customer experience provided by a business. Their purchasing decisions can also affect company revenue.

What is the difference between primary and secondary stakeholders?

Primary stakeholders generally have a more direct relationship with the business, while secondary stakeholders may have a less direct relationship but can still affect or be affected by the company.

What is an external stakeholder?

An external stakeholder is a person or group outside the organization that has an interest in the business or is affected by its activities. Examples include customers, suppliers, regulators, communities, and media organizations.

How does the community fit into stakeholder theory?

A community can be a stakeholder because business activities can affect local employment, infrastructure, environmental conditions, traffic, and other aspects of community life.

Is a shareholder the same as a stakeholder?

No. A shareholder owns shares in a company and is therefore a type of stakeholder. However, many stakeholders, including employees, customers, and community members, do not own shares.

Why is stakeholder management important?

Stakeholder management helps businesses understand the people and organizations connected to their decisions. It can improve communication, identify potential concerns, and help companies respond to different interests more effectively.

Can stakeholders influence company strategy?

Yes. Stakeholders can influence strategy through purchasing decisions, employee feedback, investment decisions, regulatory requirements, supplier relationships, community concerns, and other forms of influence.

Conclusion

Understanding who are the stakeholders in a business means recognizing the people, groups, and organizations that can affect a company or be affected by its activities.

Employees, customers, suppliers, shareholders, investors, government agencies, communities, and other groups can all have different relationships with a business.

The most useful approach is not simply to create a list of stakeholders. Businesses should also understand each group’s interests, influence, expectations, and relationship with the company.

If you are analyzing your own business, start by identifying your major stakeholders, understanding what each group needs, and creating a clear communication plan.

Stakeholder management is an ongoing process because business relationships and priorities can change as the company grows.

Author Bio

This article was written by a business content specialist covering management, entrepreneurship, and small business topics for US-based audiences. The article is based on established business education resources, academic literature, and publicly available reporting. It contains no affiliate links or sponsored content.

Sources and References

• Freeman, R. Edward. Strategic Management: A Stakeholder Approach. Pitman, 1984. Cambridge University Press source
• OpenStax, Business Ethics, stakeholder definitions and stakeholder relationships.  OpenStax
• Michigan Public, reporting on Nestlé’s Michigan groundwater withdrawal permit and public comments. Michigan Public

Information reviewed and updated: September 15, 2026.