STAKEHOLDERS IN SUPPLY CHAIN MANAGEMENT:

Supply Chain Management (SCM) department encounters a number of different stakeholders. Many
different working relationships take place within each individual work on, from colleagues to clients,
stakeholders, and suppliers. The internal supply chain that delivers the service is complicated and
requires the co-ordination and co-operation of individuals and teams who have different skills and
priorities. Hence, understanding stakeholder needs and working effectively with them is critical to
the success of the procurement team.

Supply Chain members as stakeholders Supply chain members working in well integrated
projects share access to systems, knowledge and

A stakeholder is a person, group or organization with an interest in, or concern about, the project
and those who may influence its outcome.
Any group or individual who can affect, or is affected by, the achievement of a firm’s
purpose/project/strategy. Stakeholders include those expected to benefit from or be adversely
affected by the project/Organization/strategy.
Identifying stakeholders:
The stakeholders in supply chain management could either internal or external stakeholder.
1. Internal Stakeholders:
✓ Other functions (…finance, HR, so on)
✓ Employees
✓ Project managers
✓ Other business units
2. External Stakeholders:
✓ Suppliers
✓ Government
✓ Competitors
✓ Clients or their professional representatives
✓ Press
✓ Communities
✓ Competitors
✓ Special interest/pressure groups e.g. NEMA, Gender Advocates, Labor Unions, etc
✓ Founders
✓ Collaborators/Networks/Allies
✓ Financiers/Supporters/Donors

The Internal Stakeholders, and What Are Their Roles:

Internal stakeholders, also called primary stakeholders, are entities with a direct interest or influence in
a company as all the processes and results of the company's operations also affect them. An example of
internal stakeholders are employees of a company and its owners or investors. Obviously, different

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internal stakeholders have different roles in a company. This depends on their interest, degree of
influence in decisions, and responsibility. Therefore, these internal stakeholders are: -
Investors or shareholders: Investors or shareholders are internal stakeholders who are only responsible
for the funds they invest in the company. Their influence on decisions is indirect, but their interests
require a high priority because they must trust the company to invest their money. However, their
interest is often solely financial, as the company regularly generates profit, and its capitalization steadily
grows.
Business Owners: The owners are responsible for the company's foundation and existence, and their
influence on the decision-making can vary greatly. If they are only interested in ensuring that the
company is consistently profitable, then the influence and responsibility for decisions are transferred to
the board of directors. However, the company owners may also directly influence decisions if they are
interested in ensuring that its core ideas are consistent with all internal and external processes, products,
and services.
Board of Directors: The board of directors is responsible for making strategic decisions and directly
influences all operational aspects of the company. They are also responsible for the company's market
capitalization, which their decisions affect. Their main interest is to ensure that investors are happy with
their investments and that the owners are satisfied with their choice of persons who have taken over the
company's management and the extension of its products and services.
Managers: Managers are responsible for the quality of the employees and good performance, and they
can also influence tactical decisions and the setting of goals. Their interest is in the no risk of downsizing,
good working conditions, decent wages, and bonuses for good work in their departments.
Employees: Employees are responsible for the quality of their jobs and can sometimes be influential in
setting tasks. However, employees need to have confidence in their employer rather than check for open
positions at other companies. Therefore, the interest of employees is in the absence of risks of
downsizing, good working conditions, stable pay, and bonuses.

The External Stakeholders and their Roles:

External stakeholders, also called secondary stakeholders, have an interest in the company but have no
direct influence on its decisions and are not directly affected by its performance. Customers and local
communities, suppliers, and various government or financial institutions are examples of external
stakeholders.
Customers: Of course, individual customers often have no direct influence on a company's decisions,
although some good exceptions exist. However, the customers collectively show how successful the
company's decisions have been by giving their money and attention, allowing the company to develop
and distribute its products and services. Therefore, it is necessary to look at the interests of the customer,
which are the high quality, availability, and relevance of the company's products and services.
Local community: Although local communities do not directly influence the company's decisions, they
may still influence the company by organizing various actions and demonstrations. Their interest is that
the company doesn't negatively impact their lives in the form of environmental damage, an increase in
traffic, etc. At the same time, their interest may be that the company's activities raise the status of the

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location, attracting more people, which allows them to make higher rents, open profitable businesses,
etc.
Creditors: Creditors do not influence the company's decisions but are interested in its stable income.
That way, they can give the company a bigger loan on better terms.
Suppliers: Today's world is global, and no company is in a completely closed loop. Each company's
profits depend on other businesses, and they all provide goods or services to each other. Therefore,
suppliers are vested in the company's growth, giving them more orders, profits, and cheaper production.
Government: There is a question: Is the government an internal or external stakeholder? Here is the
answer, the government is the external stakeholder interested in companies' growth because the higher
the profits, the higher the taxes. Also, the more a company expands, the more jobs it creates, increasing
citizens' well-being and purchasing power, which positively affects the demand for goods and services
from other companies. If a government provides conditions for the active growth of companies, it makes
it attractive for others to start their own companies. In this way, it creates mutual enrichment and positive
economic trends.

Difference Between Internal Stakeholders and External Stakeholders:

Now that you know the exact definitions and examples, we can conclude the difference between internal
and external stakeholders. Internal stakeholders are individuals or groups within an organization with a
vested interest in the success of a business. External stakeholders are individuals or groups outside an
organization who are vested interest in a company's success. The main difference between internal and
external stakeholders is that internal stakeholders have more direct control, while external stakeholders
have more indirect control.

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Role: Internal stakeholders are part of a company. External stakeholders are representatives of external
companies.
Type of Priority: Internal stakeholders have a high priority and are called priority stakeholders.
External stakeholders are of secondary priority and are called secondary stakeholders.
Type of Influence: Internal stakeholders directly influence its resources, processes, and results. External
stakeholders have an indirect influence on the company.
Type of Interests: Internal stakeholders are directly interested in a company since they are immediately
affected by its activities. External stakeholders have an indirect interest in the company. They also may
have an interest in some competitors.
Information Available: Internal stakeholders have direct access to internal company information about
its decisions, processes, and performance. External stakeholders can have only limited access to such
information.
Matrix of The Influence and Importance of Stakeholders:
Based on the early analysis, you can now build a stakeholder influence and importance matrix, which
will help you to visualize their place in the hierarchy and choose the best model to interact with them.

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• Quadrant 1 includes stakeholders with a high degree of influence and importance, such as the board
of directors.
• Quadrant 2 includes stakeholders with a high degree of importance but low influence, such as regular
employees or investors.
• Quadrant 3 includes stakeholders with low importance and influence, such as the suppliers or creditors.
• Quadrant 4 includes stakeholders with a high degree of influence but low importance. For example, in
some cases, the government or local communities may be there.

However, it is important to note that the position of the stakeholders may change on the graph depending
on different situations. For example, a supplier, who is a secondary stakeholder, may move to the right
in the graph, increasing its importance if it becomes a key supplier or gets a contract with it under special
conditions. Or the government of the country where your main market is may have passed new laws
that directly affect your business.

STAKEHOLDER MANAGEMENT PROCESS:

Stakeholder management is a project management process that consists in managing the
expectations and requirements of all the internal and external stakeholders that are involved with
a project. Even though each stakeholder management approach can be different depending on the
needs of your project or business, there are some best practices to manage your stakeholder
relations.
1. Stakeholder Analysis:
Stakeholder analysis is not a single step but a series of steps. In simple terms, stakeholder analysis
could be defined as the process of understanding who your project stakeholders are, what is their
level of influence and involvement, and their importance for your project or business.
2. Stakeholder Identification:
Stakeholder identification is the first step in the stakeholder analysis process and it is the base of
your stakeholder management plan. As its name implies, this process consists in identifying all
your internal and external stakeholders. Later these stakeholders will be analyzed, prioritized and
engaged. Here are some things project managers should consider during the stakeholder
identification process: Review project planning documents such as your project charter to help you
find stakeholder information.
Look for any government regulations that might apply to your project. If so, those government
agencies become project stakeholders. Ask your team members and other internal stakeholders for
feedback. Identify all the people and organizations involved with your supply chain.
3. Stakeholder Mapping:
Now that you have identified all your internal and external stakeholders, it is time to determine
their level of interest and the power or influence they have over the project. This is an important
step in the stakeholder relationship management process, because this is when you will get the
information needed for stakeholder prioritization.

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4. Stakeholder Prioritization:
Once you have a thorough list, you can begin prioritizing your project stakeholders by their
importance to the project. Decide who among them have the most influence on the project and are
affected by it.
Once you have determined who your key stakeholders are, it will be easier to keep an eye on them
and determine which are the best stakeholder management strategies to keep them satisfied.
5. Stakeholder Engagement:
Finally, with the information created in your stakeholder map, you figure out how to engage your
stakeholders. This is the process by which you decide how you will communicate and interact with
your project stakeholders. This leads to a stakeholder communication plan that outlines the
channels and frequency of communications between you and each project stakeholder.
Factors Influencing Stakeholder Satisfaction:
Stakeholder satisfaction is a crucial aspect of any business relationship. It can encourage other
companies to value your own satisfaction, and it can influence the choices stakeholders make about
their involvement in an organization.

There are several strategies that businesses can use to promote stakeholder satisfaction. These
include being accessible to stakeholders and valuing all feedback. Additionally, promoting open
communication within the team can help recognize issues with stakeholder satisfaction and correct
them quickly.
Be Accessible: Make it easy for stakeholders to share feedback if they have ideas on how to
increase satisfaction. You can do this by having a contact form on your website or posting public
information for a company representative who respond to questions.
Value all feedback: Regardless of whether you use a customer's ideas, be respectful and thank
stakeholders when they share their experiences. Validating their thoughts can increase their
satisfaction and help them feel like a valuable part of the business.
Communicate internally: When you recognize an issue with stakeholder satisfaction, promote
open communication on your team to correct it quickly. Seeking support and working together can
increase your chances of resolving a problem.
Why Is Stakeholder Satisfaction Important?
Stakeholder satisfaction is important because it influences the choices those stakeholders make
about their involvement in an organization. Stakeholders include anyone that a company affects
with its actions, including investors, business partners, employees and consumers. Businesses with
a thorough strategy consider the satisfaction of each of these groups when making decisions about
their organization, finances and products. Working to maintain and increase stakeholder
satisfaction can have several key benefits:
Gaining Financial Support: By checking in with your stakeholders, asking about their
satisfaction with the company and making changes to meet their needs, you can gain financial
support in multiple ways. The first is earning financial support from consumers who purchase more
products because they enjoy buying items from a company that works to satisfy their needs. As

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you listen to consumers about their feedback regarding product features, they may want to
purchase other products in the future.
Another way you gain financial support through valuing your stakeholders is by retaining your
investors and shareholders. When you listen to feedback from investors, provide them with
financial returns and ensure their satisfaction by giving them input on other aspects of the
company, you may be able to secure future investments for expanding the business or investing in
other projects.
Building a Dedicated Team: Employees are key stakeholders in a business, so their satisfaction
is key to success. Investing in a thriving company culture that values the time and labor of everyone
on your team can establish a dedicated team of talented individuals who believe in the company's
mission.
By asking for feedback from team members about how to improve their experience in the
workplace and asking how to improve their satisfaction levels at work, you can reduce turnover
and increase retention. Having long-term employees also builds a team of knowledgeable people
who understand the long-term history and trajectory of the company as it grows.
Establishing a Positive Reputation: Striving to value stakeholder satisfaction can contribute to a
positive reputation for your organization among customers, shareholders and people in your
community. This provides not only a financial benefit but a loyal group of customers that can
promote the business to their personal network and reliably try new products. Many people
appreciate when organizations have systems in place to seek feedback and then apply that
information to improve the quality of the stakeholder experience. When you prioritize stakeholder
satisfaction, you develop long-lasting, authentic relationships with consumers and business
partners.
Earning Honest Feedback: When stakeholders have a high level of satisfaction with a company
and consistently see that the business leaders proactively apply feedback, they may be more willing
to share their honest opinions and feedback. Getting genuine thoughts from your customers and
employees is extremely valuable as it can help you understand trends, predict upcoming changes
in the industry and adapt your business strategies to be more innovative. Unsatisfied employees or
customers may simply choose to go to another employer or business, while satisfied stakeholders
often seek improvement because they believe in the leadership at the current business.
Developing Mutual Respect: Stakeholder satisfaction is also important within business
relationships because it can encourage other companies to value your own satisfaction. For
example, if you provide prompt responses to a supplier when placing orders and show fairness
during negotiations, they may do the same because they respect your business methods. By
prioritizing the satisfaction of your business partners, you can improve your experiences within
your industry and your interactions with other companies.
Improved Interactions with Others: Satisfied stakeholders respect the business and the way it
operates. Because of the respect they hold, they're more likely to treat the business well. For
example, a supplier may feel satisfied because the business responds promptly to orders and
negotiates fairly. As a sign of respect, the supplier is more likely to adopt the same positive
practices.

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Thank You!