What Is a Stakeholder?
“Any person interested in your company or project is known to be a stakeholder. They can make decisions that will have an impact on your business. These decisions could be related to the operations and finances of a company.”
They can impact the value of the product. Nevertheless, this could also be an individual affected by the outcome. The impact could be of two types – direct or indirect.
Why is a Stakeholder Important?
- The role of stakeholders in any business is to provide practical and finance-related support to the organization.
- Stakeholders will guide you and your team throughout the process. Hence, you won’t feel alone.
- Stakeholders have a team of their own. Here they can decide about new ideas, ways to expand the business, and many more positive discussions.
- Stakeholders help you and your team put the energy on the right track.
What Is the Role of Stakeholders?
Part of BoD
Stakeholders can direct the teams in an organization since they are regularly in touch with the board of directors. The stakeholders can easily handle teams such as HR and development.
Product management software like Chisel assists you in team alignment by providing several tools that ensure every team member is on the same page.
Stakeholders are the most prominent investors who can find and even take out the money. They make this decision of funding based on companies’ performance, financially and otherwise.
Sometimes stakeholders can add or subtract the investment they’ve made in the company, affecting the share pricing in the market, therefore, turning the cards on their side.
Makes Informed Decisions
Since stakeholders are part of the BoD, they also make significant business decisions. They also make decisions such as implementing a new idea, liquidations, and acquisition decisions.
Stakeholders can also misuse their power by pressurizing the teams and business owners to obey their decisions.
Monitor Laws and Regulations
Stakeholders who are part of the company will monitor all the activities in the business. They can also help the company make better choices by abiding by the environmental and human rights laws.
Stakeholders can also help the business grow. They can share the ways to find new markets for the products, ways to make sales, new ideas, and so on. They can also bring the other stakeholders in the market to the team.
What Are the Stakeholders’ Examples?
We cannot discuss stakeholders’ examples without including the most important people. Customers are the bread and butter of the companies.
Business owners consider their users to be loyal and critical stakeholders of the business. The revenue and profit they generate only come in when customers buy products from the company.
Top product management software like Chisel has an exclusive user research pillar offering various ways to collect and manage customer feedback which is crucial for your product and company’s success.
The Suppliers and Vendors
As we know, suppliers and vendors are externally a part of the company. But they, too, are given due importance because of how the company greatly benefits from their services.
A company’s ability to interact with customers will increase when they take insights from suppliers and vendors.
Also, the main ingredients of any product are materials and resources which come directly from the stakeholders.
The Investors, Shareholders, and Stockholders
Investors are the ones who let the company begin in the forest place. They put their money only when they saw the potential in the product.
Hence, they are also important stakeholders. It is necessary to keep them well informed about the company’s business from time to time.
The shareholders and stockholders also provide funds to run the company.
What Are Primary and Secondary Stakeholders?
The primary stakeholders invest the money directly in the company.
Since the companies are financially dependent on the primary stakeholders, they can’t function without them. They are crucial for the organization’s eventual success.
You can easily trace a company’s primary stakeholders since they significantly influence the business.
Some primary stakeholder examples are customers, vendors and suppliers, and employees.
Secondary stakeholders don’t have a direct connection to the business. But they do have a significant influence on the company’s success. Companies do not rely entirely on secondary stakeholders.
Secondary stakeholders are not readily visible in the company since their influence is lesser than primary stakeholders.
Some secondary stakeholders are trade unions, competitors, media persons, and governments.
Becoming a secondary stakeholder is more accessible than being a primary stakeholder.
In short, primary stakeholders directly benefit and get affected by all the actions taken by organizations. Be it negative or positive.
Secondary stakeholders do get affected by the organization’s steps but indirectly.
What Are the Types of Stakeholders?
You can categorize stakeholders into two types – upstream and downstream.
Upstream stakeholder(s) is a person or group associated with launching the product in the market.
On the other hand, downstream stakeholders(s) are a person or group who provide support to the product.
Downstream stakeholders are often product sellers and consumers.
It is crucial to be mindful of both types of stakeholders.
A stakeholder is a person or group of persons who hold shares in a company or a product.
They can impact the value of the product. You can classify stakeholders into two types – upstream and downstream.
Stakeholders can be helpful in several ways. They can win the support of other investors, convince potential prospects to develop an interest in the product, have a media influence for the product launch, etc. Little to no support from the stakeholders can harm the product’s success.
A stakeholder may or may not be a shareholder. However, a shareholder is a stakeholder in a company. In stock markets, shareholders can gain money from an organization’s success, but they are at risk if the company fails.
Stakeholder lists will give you a broad category of stakeholders that you can cross-check when you begin a project in your company.
Stakeholders in software development are involved in the whole process. These software stakeholders need the final product and will guide the company in suggesting features and issues that should be addressed.
A stakeholder in software development can also create workflows and use case diagrams for the teams.