Simplifying Business Strategies

Stakeholders ModelStakeholders Model

The stakeholder model provides a way of thinking about different types of stakeholders and how they can help or impede progress on projects, products, or services. As a manager, it is vital to understand the various stakeholders involved in achieving success for your organization. 

In this blog post, we will be taking a closer look at what the stakeholder model is and the benefits and challenges that come with it, as well as some possible examples that demonstrate how these models can be applied.

By understanding how you can maximize the potential leverage gained from your organization using this model successfully, you’ll be better equipped to ensure everyone remains satisfied while managing considerable complexity in your organization’s activities.

What is a Stakeholder Model?

A stakeholder management model is an approach that takes into consideration the interests and needs of all stakeholder parties involved in a business operation.

It involves looking beyond the shareholders and considering the impact of the company on employees, customers, suppliers, and the wider community.

An effective stakeholder model ensures that all important stakeholders have a voice and are included in decision-making processes that may affect them.

By prioritizing stakeholders over short-term profit, companies can create long-lasting relationships and contribute positively to society.

The stakeholder model emphasizes the need for organizations to be accountable for their impact on the environment, social justice, and sustainability. In essence, it creates a more ethical and responsible approach to business management that benefits everyone involved.

What are the Benefits?

One key benefit of this model is that it fosters strong relationships with customers, employees, and community members.

By prioritizing the needs and interests of all stakeholders, businesses are able to understand their unique perspectives and cater to their specific needs.

This leads to increased customer loyalty, a more motivated and satisfied workforce, and a positive reputation within the community.

Additionally, the stakeholder model often leads to more ethical and socially responsible business practices, as companies take into consideration the impact of their business ethics and their decisions on the wider community and environment.

What are the Disadvantages?

One of the biggest setbacks is that it can be difficult to determine who exactly counts as a stakeholder.

This lack of clarity can lead to confusion and conflict within a company, as everyone tries to push their individual interests and needs.

Additionally, prioritizing the needs of the other stakeholders over those of shareholders can result in lower financial returns, which could harm the overall growth and success of the business.

Stakeholder Theory Examples

Stakeholder theory is a critical concept in business management, and it has immense relevance in corporate social responsibility.


Stakeholder theory recognizes that employees have a vested interest in the well-being of the organization by virtue of their employment and that their needs and concerns should be taken into account when making strategic decisions.

Employees bring knowledge, skill, and dedication to the workplace and invest time and energy into achieving the company’s goals.

Ultimately, a satisfied and engaged workforce leads to increased productivity and profitability, benefiting both the company and its employees.

Therefore, it is important to treat employees as stakeholders and provide them with opportunities for growth and development, fair compensation, and a safe and supportive work environment.

Manufacturers, Suppliers, etc.

By providing essential goods and services, these stakeholders help create value for customers and keep the economic wheels turning.

But their importance goes beyond just sales figures and profit margins. Indeed, manufacturers and suppliers often have a broader impact on society, impacting everything from the environment to labor conditions to public health.

For this reason, many businesses are adopting a stakeholder theory mindset, in which they see themselves as accountable not just to shareholders but also to the wider community they serve.

By taking this approach, manufacturers and suppliers of raw materials can ensure that their actions are responsible, sustainable, and beneficial for everyone involved.


Customers play a crucial role in any business. They are the ones who purchase products or services and drive revenue for a company.

As such, they are a key component of stakeholder theory, which suggests that a business should consider all parties with a stake in its operations, not just shareholders.

Customers have a vested interest in a company’s success and are directly impacted by changes in its strategy, pricing, and product offerings.

By prioritizing their needs and building strong relationships with them, businesses can create a loyal customer base that supports their growth.


Shareholders are often considered one of the prime examples of stakeholder theory. This is because they hold a significant stake in a company, both in terms of financial investment and potential gain or loss.

As owners of a portion of the company, they have a vested interest in its success and are often willing to actively engage with company leadership to ensure their voice is heard.

At the same time, shareholders are also subject to risk and uncertainty, which means they have a tangible interest in the company’s ability to withstand challenges and maintain profitability.

In this way, shareholders exemplify the idea that businesses should consider the needs and concerns of all stakeholders.

Members of a Community

When we think about the concept of stakeholder theory, it’s easy to see how members of the stakeholder groups within a community exemplify it.

After all, what is a community, if not a group of individuals who are invested in the well-being of their shared environment and the people who live there?

Each member plays a unique role, whether it’s through volunteering, supporting local businesses, or simply being an active participant in community events.

Essentially, they have a stake in the success and prosperity of their surroundings. When it comes to making decisions that affect the community, their voices must be heard and considered.


Knowing how to incorporate the stakeholder model into your organization’s activities can be quite a challenge. Understanding the various stakeholders, their needs, morals, and values, and how to get their buy-in is vital in order to create effective outcomes for all involved.

However, with practice and knowledge, anyone can learn to manage these complexities and gain insight into how to maximize potential leverage in achieving success.

If you are looking for further advice on understanding the risks associated with managing stakeholders, then it’s worth taking time to review the information presented here.

Devoting resources towards mastering this skill set is certainly worthwhile if you want your organization to reach its ultimate potential.

With that being said, we encourage all managers out there to think about how incorporating the stakeholder and project management model can propel them towards long-term objectives of success.

To learn more about the Stakeholders’ Model, Disney Business Model, and other business models, contact Strategy Capstone today!