Interested Parties

An interested party is an individual or group that has a legitimate interest in a company, organization, or business. You may see these people and groups referred to as stakeholders in business writing and other media. The Stanford Research Institute defines stakeholders as “those groups without whose support the organization would cease to exist.”^[1] Interested parties can affect or be affected by the actions (or inactions) of a business, and they can exist both within and outside of a business.

interested parties (or stakeholders)

• Internal interested parties are groups or people who work directly within the business.
• External interested parties are groups outside a business or people who don’t work inside the business but are affected in some way by the decisions and actions of the business.

Internal interested parties include managers, employees, and owners. Managers and employees want to earn high wages and keep their jobs, so they have a vested, or personal, interest in the financial health and success of the business. For example, owners want to maximize the profit the business makes as compensation for the risks they take in owning or running a business.

Examples of external interested parties are customers, suppliers, distributors, creditors, the local community, society, and the government.

• Customers want the business to produce quality products at reasonable prices.
• Shareholders have an interest in business operations, since they are counting on the business to remain profitable and provide a return on their investment in the business. 
• Creditors that supply financial capital, raw materials, and services to the business want to be paid on time and in full.
• Federal, state, and local governments need businesses to thrive in order to pay taxes that support government services, such as education, police, and fire protection.
• The local community has a stake in the business, because it provides jobs, which generate economic activity within the community.
• Society as a whole (as well as the local community) is concerned about the impact that business operations have on the environment in terms of noise, air, and water pollution. Society also has an interest in the business with regard to the safety of the goods and services produced by the business. 
• Suppliers need the business to continue to buy their products in order to maintain their own profitability and long-term financial health.
• Distributors need the business to continue operating so that they products to distribute and operate profitably.

Often, the priorities of internal and external stakeholders may conflict. For example, Huy Fong Foods, the maker of the popular red sriracha hot sauce with the rooster on the bottle, had to address complaints by residents and business owners that its factory in Irwindale, CA was emitting fumes from chiles that caused breathing problems.^[2] Businesses need to work to resolve these competing issues if they want to continue to thrive.

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