Internal vs External Stakeholders: Difference and Comparison

A company includes various members that comprise to form a stakeholder, and the person or other factors that affect the complete organization is known to be a stakeholder who is further consisting of internal stakeholders and external stakeholders.

Key Takeaways

  1. Internal stakeholders are individuals or groups, such as employees and shareholders.
  2. External stakeholders, like customers, suppliers, and regulators, are outside an organization.
  3. Both internal and external stakeholders can influence an organization’s decisions, goals, and overall success.

Internal Stakeholders vs External Stakeholders 

Internal stakeholders are individuals affected by and interested in a company due to their direct relationships with the company, such as employment, investment, or ownership. External stakeholders are people affected by the activities of a business but are not directly related to the company, like government agencies.

Internal Stakeholders vs External Stakeholders
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This city has the highest cost of living in the world.

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Wages and taxes that a company pays are examples of:

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Modular furniture __________.

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They are the primary responsibility of the company to be looked upon. They have much interest in the ongoing business. 

External Stakeholders are the ones that don’t have to face the direct impact of the decision made by the company or the organization. As they are not affected directly, they don’t take much interest in the business.

Comparison Table

Parameters of ComparisonInternal StakeholdersExternal Stakeholders
DefinitionIndividual members or group members of any company or organization Person or group who isn’t a member but is readily affected by the company indirectly
Impact DirectIndirectly
Who are they?Individuals working for the organizationIndividuals or groups influenced by their work
Employment Given YesNo
Responsibility by the EmployeesDirectly or primaryIndirectly or secondary
Consists OfEmployees, its owner, investors, management, board, and many othersCustomer, rivalry, government, society, creditors, supplier, retailer, and many others
Knows AboutInternal matters of the companyPublicly available information

What is Internal Stakeholders?

Internal stakeholders are a single person or a group of several members that are part of the company or the organization. Some of the members known to be part of the company or organization as internal stakeholders are – employees of the company, management, directors, owner, and many others.

The varied activities performed by the company directly affect these above-mentioned members. The interest of the members of the company is more as any decision made will affect them too.

They are also aware of the internal matters taking place within the company. They employ their internal stakeholders in their organization.

What is External Stakeholders?

External stakeholders are the individual or any group that is not a part of any organization or company but still gets affected by the changes or decisions made within it.

The activities performed within the company do not affect the members of the external stakeholder directly. Although they might be looking forward to the success of the company but still got indirectly affected.

These members, although they aren’t a member of the respective company or organization but manage them externally and are mostly aware of the information that is available publicly.

Main Differences Between Internal Stakeholders and External Stakeholders

  1. The example for the internal stakeholders consists of their employees, management, board, directors, owner, and others whereas comparatively, on the other hand, the example for the external stakeholders consists of their suppliers, retailers, creditors, customers, rival companies, society, and many others.
  2. The members of the internal stakeholders know maximally about the internal matters of the company or the organization, whereas comparatively, on the other hand, the members of the external stakeholder know about the information that is publicly available about the company or the organization.  
References
  1. https://www.tandfonline.com/doi/abs/10.1080/01446190701821810
  2. https://www.sciencedirect.com/science/article/abs/pii/S026378631930866X
  3. https://www.proquest.com/openview/2c1ba4858e25e10a8c835d5bf247db64/1?pq-origsite=gscholar&cbl=18750&diss=y
  4. https://www.sciencedirect.com/science/article/abs/pii/S026378631830142X

Last Updated : 13 July, 2023

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