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stakeholder

STAYK-hohl-dur /ˈsteɪkhoʊldər/

nounB2GMATIELTSCAT

businesspolicy

Any person, group, or organization that has an interest in or can be affected by the actions and policies of a business or project.

Unlike a 'shareholder' (who owns stock), a 'stakeholder' includes employees, customers, suppliers, and the local community.

The story behind the word. In the 1700s, a 'stakeholder' was a neutral third party who literally held the 'stakes' (the money bet) during a wager or a race. It wasn't until the 1960s that the term was adopted by management theorists to describe people with a 'stake' in a company's success.

Word relationships

interested party: A more general term for anyone with a 'stake' in a legal or business matter.
constituent: Often used in politics to refer to the people a representative serves.

outsider: Someone with no connection to or interest in the organization.
bystander: Someone who observes but is not affected by the outcome.

Commonly confused with

shareholder: A shareholder owns a piece of the company (stock), whereas a stakeholder is anyone impacted by the company (including the shareholder).

Word family

stakeholders (noun (plural)): Multiple groups with an interest in an entity.

Collocations

stakeholder engagement
key stakeholder
stakeholder interests
internal stakeholder

Example sentences

"A stakeholder in an organization is (by definition) any group or individual who can affect or is affected by the achievement of the organization's objectives." A foundational definition from the father of stakeholder theory. (R. Edward Freeman, 1984)
"The project manager realized that the local school was a key stakeholder that had been overlooked in the initial planning." The construction company held a town hall to hear from local residents.

Memory hook

Imagine someone holding a wooden 'stake' in the ground to mark their territory. They have a physical piece of the project's success or failure. Holding a stake in the outcome.

When not to use

Avoid using this in purely social contexts; it is specifically for organizational or project-based interests.

Fun facts

The term was first used in a business sense in an internal memorandum at the Stanford Research Institute in 1963.