DEFINITION of 'Stakeholder'

A party that has an interest in an enterprise or project. The primary stakeholders in a typical corporation are its investors, employees, customers and suppliers. However, modern theory goes beyond this conventional notion to embrace additional stakeholders such as the community, government and trade associations.


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BREAKING DOWN 'Stakeholder'

A common problem that arises with having numerous stakeholders in an enterprise is that their various self-interests may not all be aligned. In fact, they may be in conflict with each other.
The primary goal of a corporate enterprise from the viewpoint of its shareholders is to maximize profits and enhance shareholder value. Since labor costs are a critical input cost for most companies, an enterprise may seek to keep these costs under tight control. This may have the effect of making another important group of stakeholders, its employees, unhappy. The most efficient companies sucessfully manage the self-interests and expectations of its stakeholders.

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