A person, group or organization that has interest or concern in an organization. Stakeholders can affect or be affected by the organization’s actions, objectives and policies.

Groupings of stakeholders When identifying stakeholders it is not enough to focus on the formal structure of the organisation. It is necessary to have a look at informal and indirect relationships too. There are a number of ways of classifying stakeholders according to criteria based on how stakeholders relate to organisational activities. A useful model for this purpose is to visualize the stakeholder environment as a set of inner and outer circles. The different classifications of organisational stakeholders are:

1. Internal and external stakeholders
2. Narrow and wide stakeholders
3. Primary and secondary stakeholders
4. Active and passive stakeholders
5. Voluntary and involuntary stakeholders
6. Legitimate and illegitimate stakeholders
7. Financial and Non-financial stakeholders
8. Internal versus external stakeholders Here, stakeholders are distinguished depending on whether they are part of the organisation – i.e. have a formal working relationship with the organisation – or are external to the organisation. Internal stakeholders include employees, management and board of directors, and possibly trade unions. External stakeholders include customers, competitors and suppliers. It could also include all other groups which do not form part of the internal organisation’s structure.
9. Narrow versus wide stakeholders This classification describes the degree to which the stakeholder group is affected by the activities of the organisation.

Narrow stakeholders are used to describe stakeholders who are most affected or who are most dependent on organisational output. Examples of such stakeholders include shareholders, employees, management, customers and suppliers.

Wide stakeholders, on the other hand, refer to those who are less affected or dependent on the organisation’s output. This category includes government and its agencies, the wider community and non-dependent customers.