Difference between Internal and External Stakeholders

Key Difference: Internal stakeholders or primary stakeholders are people that that engage in economic transactions with the business. External stakeholders are indirectly affected by the performance and do not engage in direct economic exchange with the business.

Stakeholders are common terms that are used in business, specifically Corporates. The term ‘stakeholder’ was not widely known until fairly recently and was coined in 1963 by Stanford Research Institute.

Stakeholders are people that are affected by the performance of the business as a whole. Stanford Research Institute defined stakeholders as "those groups without whose support the organization would cease to exist." The term since has broadened to include anyone that has an interest in the business. Stakeholders have been further divided into two types: Internal Stakeholders and External Stakeholders.

Internal stakeholders or primary stakeholders are people that that engage in economic transactions with the business or people without whom the business would not survive. It can also be groups that exist inside of the business. These people are directly affected by the performance of the company. These include: owners, investors, employees, etc.

External stakeholders are indirectly affected by the performance and do not engage in direct economic exchange with the business. These people have an interest in the business being successful but may not be directly affected by it. These include: customers, suppliers, creditors, the government and the society at large.

Comparison between Internal and External Stakeholders:

 

Internal Stakeholders

External Stakeholders

Definition

Internal stakeholders or primary stakeholders are people that that engage in economic transactions with the business or people without whom the business would not survive.

External stakeholders are indirectly affected by the performance and do not engage in direct economic exchange with the business.

Alternate Name

Primary Stakeholders

Secondary Stakeholders

Examples

Investors, employees, volunteers, donators, managers, partners and owners

Customers, Suppliers, creditors, the government and society

Image Courtesy: boundless.com

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