What is a stakeholder?

A stakeholder is defined as an individual or group that has an interest in the success or failure of a business. This can encompass a wide range of entities, including employees, customers, investors, suppliers, and even the community at large. Stakeholders are invested in the company’s performance and have a vested interest in its decisions, strategic direction, and overall outcomes. Their interests may include financial returns, job security, product quality, or ethical practices depending on their relationship with the business.

Understanding stakeholders is critical for business operations because engaging them effectively can drive success and help address their concerns. For example, a company that pays attention to customer feedback (a stakeholder group) may improve its products and services, ultimately leading to increased sales and customer loyalty.