For a given project, the stakeholder is the entity that provides the necessary investments. So, both the primary and secondary stakeholders, often referred to as key stakeholders, are not part of the team. Also, the investment might not be of a monetary type.
Generally, any sort of value, be it stakeholder value or other, can be an investment – even a social one, which might be linked to corporate social responsibility (CSR).
While not involved in the day-to-day operations, stakeholders take part in stakeholder evaluations.
That way, they influence the brand’s immediate actions. Their stakeholder input depends on the level of their investment and whether they have a direct stake.
Therefore, there are two pressure groups: primary and secondary stakeholders. Knowing what comprises each group is part of project management and stakeholder analysis.
Next, you can tailor the business operations to prepare for the upcoming stakeholder review period.
Key takeaways
- Primary stakeholders, often seen as internal stakeholders, have significant financial stakes in a business and feel the consequences of business decisions the most, influencing company growth strategy and decisions directly.
- Secondary stakeholders, sometimes known as tertiary stakeholders, are not directly affected by the company’s actions but their support aids in the company’s growth, and they contribute to key decisions without taking on much risk.
- Employees, who invest their effort and dedication into a company, are considered primary stakeholders due to their significant role in the company’s investments and stakeholder strategy.
- Local communities play a crucial role as secondary stakeholders, as they can significantly influence a company’s success and are often aligned with the company’s values and principles, affecting the stakeholder environment.
Primary and Secondary Stakeholders – The Distinction

The project manager is in charge of stakeholder mapping and tagging each stakeholder with a badge. To do so, they will weigh in their financial stake and potentially direct financial impact. Hence, they will gauge the stakeholder’s level of involvement.
After that, both groups continue to have a say in the stakeholder decision-making process. However, not everyone will have the same values to lose/gain. So, their stakeholder roles vary accordingly.
The First Group
The primary stakeholders, often seen as internal stakeholders, have a substantial hand in how a business reaches a goal.
Their shares comprise the majority of the total funds, reflecting their stakeholder interests. Hence, aside from the business, the primary stakeholders feel each consequence the most, especially in terms of stakeholder risks.
Depending on their expenses, some primary stakeholders can even take a recurring leading role. That means overseeing all pressing matters and providing business decisions. At the same time, any unforeseen loss will translate to their funds directly.
This group of stakeholders has a very hands-on approach to the company’s growth strategy. Their votes, which are a reflection of their stakeholder influence, are often decisive and direct the next fiscal period. So, their decisions have far-reaching implications. In short, they have a lot more to lose than a regular team member.
There are two sub-groups of primary stakeholders. The internal stakeholders comprise board members, directors, and even managers. The external primary stakeholders, who might be seen as external stakeholders, don’t hold a position within the company. Instead, they invest heavily and keep on observing things indirectly, often through stakeholder communication and feedback mechanisms.
The Types of Primary Stakeholders
The Returning Clients
The company’s profit margin rests on the stakeholder engagement level. Thus, many brands deem their loyal customers, a crucial part of their stakeholder relationships, as primary stakeholders. With every purchase, they provide a stronger foundation for a business to thrive, reflecting their stakeholder value.
In return, the company should invest in the means to evolve its inventory. Thus, deriving new ways to come true for their customers, ensuring stakeholder satisfaction, is an ongoing struggle.
Otherwise, people might lose interest in a given brand, and the sales charts, a reflection of stakeholder feedback, will start declining.
The Pool of Shareholders
Investors and shareholders, often seen as external stakeholders, also feel the effects of a wrong business decision. If a company is doing well, its ROI rates, a measure of stakeholder benefits, will find a steady pace.
However, not all investments will be fertile from the start. In all cases, the shareholders’ piece of the cake, their stakeholder interests, will fluctuate depending on this performance.
The Loan Providers
In most cases, a brand will require an external influx of funds, a form of stakeholder investment, to kickstart a new campaign.
Thus, the lenders that opt to answer such a call also become primary stakeholders. Still, their focus is getting the loan and interest rate back. If the company struggles to return those funds, its overall stakeholder trust and credit score will suffer.
The Product Suppliers
Many suppliers, essential external stakeholders, keep on thriving thanks to a single business’ recurring purchases.
After a while, the supplier may decide to partner with the company, forming a stakeholder partnership. Next, the supplier’s position as a primary stakeholder means both firms must keep on growing together, ensuring mutual stakeholder value.
The Trainees and Employees
The people who devote full working weeks to a brand are also among the primary internal stakeholders. Although they’re on the company’s payroll, they also invest back in it with effort and dedication, reflecting their stakeholder commitment.
Thus, they’re both the cause and the result of the company’s ongoing investments, influencing the stakeholder strategy.
The Second Group
The secondary stakeholders, sometimes referred to as tertiary stakeholders, are not directly affected by the company’s endeavours.
However, their investments make them influential figures nonetheless. In that way, they aid a company’s growth without putting themselves at a huge risk, ensuring stakeholder security. On the other hand, brands welcome such funding, seeing it as a form of stakeholder support, just the same.
Their roles, or stakeholder responsibilities, are not as profound as the ones of the primary stakeholders, though. So, they are not really involved in the daily struggles of the organization. Instead, they pitch in when necessary to decide on a key dilemma, reflecting their stakeholder influence.
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The Types of Secondary Stakeholders
Guilds and Unions
A group of employees can act as a secondary stakeholder, representing a form of stakeholder group.
For example, trade unions can interact with a brand to ensure fair wages and improve other conditions, reflecting their stakeholder interests. In that way, they can contribute to the stakeholder decision-making process.
Next, the preservation of that success will be a shared goal, emphasizing stakeholder commitment.
Also, if a company keeps on ignoring the unions’ pleas, its stakeholder trust and public image will plummet. Therefore, earning the employees’ favour can support the company’s progress and enhance stakeholder relationships.
Competing Brands
The companies that compete for the same market shares as you also depend on your performance, showcasing the interconnectedness of stakeholder influence.
In other words, they have an interest in your results, and it can impact their fiscal reports, reflecting their stakeholder value.
Various Media Groups
Social media apps and platforms, acting as communication channels for stakeholder engagement, enjoy high respect today.
Through them, all sorts of organizations announce their standpoints. As a result, popular media can affect the limits of how fast a brand can grow, emphasizing the role of stakeholder communication.
Similarly, customers can reach out to the stakeholders via various media channels. In turn, the company may take note and start building brand awareness that way. Due to such relations, experts often cite the media as a secondary stakeholder, emphasizing their stakeholder influence.
Activists and Social Advocates
Certain groups of people aim to spread the word about various wrongdoings and unfair practices, reflecting their stakeholder advocacy.
Such reporting may even shed light on a company’s overall efficacy. Aside from that, activists may highlight a potential subpar treatment of employees, emphasizing stakeholder rights.
To promote their cause, the primary stakeholder group can engage in such communications, ensuring stakeholder involvement.
This joint effort can have a more social goal, linked to corporate social responsibility (CSR), as well as a more immediate financial gain. Either way, it’s another example of how secondary stakeholders affect a business.
Government Agencies
Official bodies form ties with prevalent brands to ensure compliance with the current regulation, emphasizing their role as external stakeholders.
For example, regarding the intended health and safety standards. Next in terms of relevance are the labor laws and a slew of similar factors, reflecting stakeholder expectations.
Furthermore, local governments have the power to make decisions that directly affect a business. Due to such deterrence, companies aim to nourish these relations and ensure a pristine public image, emphasizing the importance of stakeholder trust.
Local Communities
The surrounding area often decides the limits of potential business success, reflecting the stakeholder environment.
Also, some of the company’s members might belong to a single community. That means exposure to the same values and principles, emphasizing stakeholder values.
Therefore, communities are among the most influential external factors, showcasing their stakeholder influence.
Primary and Secondary Stakeholders – Main Differences
Regarding Decision-Making
In general, the primary stakeholders, often seen as key stakeholders, are among the best-known leaders of a company.
They’re heavily involved in ongoing projects and decide on many issues, reflecting their stakeholder influence. In comparison, the secondary stakeholders have a far lesser level of stakeholder involvement.
Another definition would be the primary stakeholders hold monetary stakes, emphasizing their stakeholder interests.
On their end, the secondary stakeholders provide social means of growth, linked to corporate social responsibility (CSR). As such, their role is often to criticize and indirectly shape an outcome, showcasing their stakeholder feedback.
The Pursue of the Long-Term Goals
For a brand to keep on evolving, it needs a healthy team of primary stakeholders. Hence, their stakeholder goals and expectations are the brand’s main objectives.
At the same time, the primary stakeholders work diligently to cross those milestones, reflecting their stakeholder commitment.
The secondary stakeholders also carry a lot of weight, though their roles are not at the forefront. Instead, their influences exist in the background, becoming vocal at strategic intervals. As a result, their interventions are what makes the brand’s stakeholder trust and public image.
Financial Implications
When it comes to funding and keeping a brand afloat, the primary stakeholders take the reins. Their sizable investments, reflecting their stakeholder value, build the grounds to support a thriving business.
At first, most of the daily expenses come from that pool. Thus, any bad financial decision affects mostly the primary stakeholders, emphasizing their stakeholder risks.
Necessary Elements
Due to their heavy involvement, the primary stakeholders are a necessity for any company, reflecting their stakeholder importance.
Without their expenditures, no brand can start competing in the market. They pilot all current and strategic moves, eventually leading to the higher stage of a stakeholder strategy and business model.
The secondary stakeholders don’t have a direct share in the company’s performance. However, they do shape the market and can set a surprising new standard. Such developments alter the current stakeholder policies of many global brands, meaning they do keep an eye on them.
The Legal Framework
The stakeholder groups visibly differ on this aspect. The key stakeholders have a legal right to a piece of the brand’s financial earnings, emphasizing their stakeholder rights. Next to them, the many secondary stakeholders hold no actual ties whatsoever.
Hence, their influence is mostly in raising awareness around a focal point, reflecting their stakeholder communication. As a result, there’s rarely direct stakeholder engagement between the two groups.
FAQ about primary and secondary stakeholders
What is a primary stakeholder?
A primary stakeholder is a person, group, or organisation that directly benefits from or has an interest in a company’s decisions and stakeholder strategy.
Employees, clients, shareholders, and suppliers, often seen as key stakeholders, are frequently considered to be major stakeholders due to their stakeholder influence.
What is a secondary stakeholder?
A person, group, or organisation that indirectly benefits from a company’s decisions or has a secondary investment in the company is referred to as a secondary stakeholder.
Governmental organisations, neighbourhoods, rival businesses, and special interest groups, which can be seen as external stakeholders, are examples of secondary stakeholders.
How are primary stakeholders different from secondary stakeholders?
While secondary stakeholders have an indirect interest in a company and are impacted indirectly, primary stakeholders have a direct interest in it and are immediately impacted by its decisions, reflecting their stakeholder commitment.
Typically, primary stakeholders play a bigger role in a company’s success, emphasizing their stakeholder value, than secondary stakeholders.
Who are some examples of primary stakeholders in a business?
Employees, clients, shareholders, and suppliers are a few examples of main stakeholders in a firm.
Workers are a key stakeholder group since they are immediately impacted by the stakeholder engagement and performance of the company. Because they are the main source of money for the company, customers are also major stakeholders.
Shareholders have a direct financial interest in the company, and suppliers also have a direct financial interest because their own success is frequently correlated with that of the company, emphasizing their stakeholder relationships.
Who are some examples of secondary stakeholders in a business?
Governmental organisations, communities, rival companies, and special interest groups, often seen as tertiary stakeholders, are a few examples of secondary stakeholders in a firm.
While not being directly involved in the business’s daily operations, these stakeholders may be impacted by its decisions or have an interest in it, reflecting their stakeholder perspective.
How do primary and secondary stakeholders affect a business?
The success or failure of a corporation is greatly influenced by its primary stakeholders because they are immediately impacted by its operations and choices, emphasizing their stakeholder interests. They have an impact on a company’s income, reputation, and bottom line.
Although they are not as directly impacted, secondary stakeholders can nevertheless have an impact on a company’s reputation, stakeholder trust, brand image, and relationships with key stakeholders, reflecting their stakeholder influence.
What is the importance of identifying primary and secondary stakeholders?
Understanding the groups that are impacted by a business’s operations and choices requires the identification of both primary and secondary stakeholders.
This stakeholder analysis enables a company to make decisions that are well-informed and take into account the wants and needs of all of its stakeholders. Also, it fosters fruitful stakeholder interactions and enhances a company’s reputation, stakeholder trust, and financial performance.
What strategies can a business use to effectively engage with primary stakeholders?
By actively listening to their wants and concerns, offering open stakeholder communication channels, and including them in stakeholder decision-making processes, businesses can effectively connect with their major stakeholders.
For these stakeholders, this may aid in fostering a sense of loyalty, trust, and long-term stakeholder partnerships.
What strategies can a business use to manage relationships with secondary stakeholders?
By being open and upfront in their communication, attending to their issues, and interacting positively with them, businesses may manage their stakeholder relationships with secondary stakeholders.
Companies should be conscious of how they affect these stakeholders, reflecting their stakeholder influence, and take precautions to lessen any unfavourable repercussions, ensuring stakeholder satisfaction.
How can a business balance the needs of primary and secondary stakeholders?
A company should give priority to the demands of its key stakeholders, reflecting their stakeholder interests, while also taking into account how its decisions will affect its secondary stakeholders in order to strike a balance between their needs.
Finding a solution that can satisfy both stakeholder groups and satisfy a middle ground, ensuring mutual stakeholder value, is required for this.
Conclusion on Primary and Secondary Stakeholders
The company’s stakeholders are a group with hefty direct and indirect ties with it. Depending on their roles, they can even have a vocal presence and represent the brand, emphasizing their stakeholder commitment and stakeholder strategy.
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