What is a stakeholder in business?

A stakeholder in business is defined as a person or group that has an interest in the success or performance of an organization. This interest can manifest in various ways, such as financial investment, involvement in decision-making, or influence on policies and practices. Stakeholders can be individuals or entities that can affect or be affected by a business's actions, objectives, and policies.

Having a stake or interest in a business implies an investment of resources—whether it's time, money, or effort—leading to a vested interest in the outcomes of that business. Stakeholders include employees, customers, investors, suppliers, the community, and even the government, all of whom have varying levels of influence and interest.

Understanding the role of stakeholders is crucial for effective business planning and strategy, as their interests can significantly impact a business's operations and long-term success. Engaging with stakeholders ensures that their needs and concerns are addressed, fostering stronger relationships and enhancing overall business performance.