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Stakeholders and their requirements

Strategy is not formulated for its own sake but to satisfy the interests of people inside and outside the organisation.

These people are called stakeholders, and they are any persons or entities interested in an organisation’s performance, and therefore have a desire to influence its activities.

Stakeholders could be internal or external. Internal stakeholders are employees, managers and owners, and external stakeholders may include suppliers, society, the government, creditors, shareholders and customers.

An image displaying internal and external stakeholders for a company. Internal stakeholders include employees, manager, and owners. External stakeholders include suppliers, society, government, creditors, shareholders and customers.

We summarise the financial and non-financial interests of these stakeholders below:

Type Financial interests Non-financial interests
Owners - Salaries, share dividends
- Fringe benefits, pensions
- Self-actualisation
- Employment for family, locality
Managers - Salaries, share dividends
- Fringe benefits, pensions
- Recognition, self-esteem
- Job security, influence, power
Employees - Secure income
- Fringe benefits, pensions
- Job security, recognition
- Health and safety
Suppliers - Prompt payment - Standard specifications
Government and society - Taxes - Employment, welfare
- Corporate citizenship
Creditors - Interest, principal payment - Power, influence
Shareholders - Share price, dividend - Reputation, positive publicity
Customers - Value for money - Quality, ethics

Understanding these constituents and their specific interests is key to effective strategy development.

Your task

Read the case study on BHS’ collapse and answer the following questions:

  • Who were BHS’ internal stakeholders? What interests did they have?
  • Who were BHS’ external stakeholders? What interests did they have?

Discuss your answers in the comments area.

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This article is from the free online course:

Strategy as a Process and Measures of Success: An Introduction

Coventry University