An External Stakeholder is an individual or group outside an organization that has an interest in or can be affected by the organization's activities, decisions, or projects. External stakeholders can include customers, suppliers, partners, competitors, regulators, and the community in which the organization operates. While they may not be directly involved in the organization's daily operations, they can still be influenced by its actions and decisions, and their feedback and interests can impact the organization's strategies and success.
Internal vs External Stakeholders
The split is about position, not importance. Internal stakeholders sit inside the organization and take part in its daily operations and decisions. External stakeholders sit outside it but are still affected by what it does, and they still shape its choices.
| Internal stakeholders | External stakeholders | |
|---|---|---|
| Position | Inside the organization | Outside the organization |
| Example groups | Shareholders, employees, managers, board members | Customers, suppliers, creditors, governments, unions, local communities |
The relationship runs both ways: stakeholders contribute resources to the organization, and the organization's actions influence them in turn (Open University). For the other half of the pair, see internal stakeholders and how to keep both groups aligned through stakeholder alignment.
Common Types of External Stakeholders
The definition above names six groups. Here is what each one actually wants from the organization:
- Customers. Buy the product or stop buying it, and feed back on what works.
- Suppliers. Provide the inputs the business runs on, which creates dependency risk in both directions.
- Partners. Deliver alongside you. They are the one external group a company picks deliberately rather than inherits.
- Competitors. Constrain pricing and positioning, and can sometimes collaborate (see the FAQ).
- Regulators. Set the legal boundaries the company operates inside.
- The local community. Affected by operations, and grants or withholds acceptance.
This canonical list is corroborated by the Open University's stakeholder figure (customers, suppliers, creditors, governments, unions, local communities). Because partners are the chosen external stakeholder, the selection method matters more here than anywhere else. That is the job of 4C qualification and Partnership Architecture, and it is why a supplier relationship is managed differently from a partnership.
The Standard That Governs Stakeholder Engagement
There is a recognized standard for this. AA1000SES, the AccountAbility Stakeholder Engagement Standard (2015 edition), is the most widely applied framework for engaging stakeholders. Its process runs in five steps: identify stakeholders, plan the engagement, carry it out, integrate what you learn into decisions, then monitor and evaluate the result. For the partner subset of external stakeholders specifically, ISO 44001 covers collaborative business relationship management.
Frequently Asked Questions
Are competitors external stakeholders?
Yes. Competitors sit outside the organization and are affected by its actions, so they meet the definition. The Open University lists competitors among external stakeholders alongside customers, regulators, creditors, and local communities. Competitors can also become collaborators, which is the idea behind coopetition.
What are three external stakeholders?
Any three groups outside the organization that have an interest in it. The three named most often are customers, suppliers, and regulators, all of which the definition above covers. Partners, creditors, and the local community are common answers too.
What are examples of internal and external stakeholders?
Internal examples are employees, managers, and shareholders, who sit inside the organization. External examples are customers, suppliers, partners, competitors, regulators, and the local community. The comparison table above lays the two side by side, and internal stakeholders covers the other half.