51 Are there alternative theories of stakeholder categorization?

The “low” versus “high” power and interest classification used previously is useful because it generates actionable insight into the stakeholders of a business.^[1] Yet, there are many other useful ways to classify stakeholders that may generate useful insights for managers. We will consider just three alternatives that may be useful.

First, we might categorize stakeholders as either (1) normative, those that create professional standards in an area, such as trade associations, (2) enabling, those that enable the company to exist, such as legislatures or government regulators, (3) diffused, such as mass media, or (4) functional, those that make the company function, such as employees, customers, and distributors.

Second,  we could consider the influence of each stakeholder as affecting, or being affected by, the organization. For instance, (1) Dependent stakeholders are those who are affected by the company, but have little ability to influence what the company does. An individual consumer may be an example of a passive stakeholder. (2) Partner stakeholders influence the entity and may be influenced by it in a powerful way. A key supplier may be considered a partner stakeholder. (3) Controller stakeholders are those such as the board of directors that manages what the company does.

Third, we might simply classify stakeholders as simply “internal” or “external”. Internal stakeholders are those such as employees or the board of directors who are employed by or have legal responsibility for a company. External stakeholders are those outside the organization, such as consumers, communities, and regulators.

What these various ways to organize stakeholders have in common is consideration of a relatively consistent list of entities which stakeholder theory suggests considering. These typically include:

• Shareholders
• Employees
• Customers
• Communities
• Government entities
• The environment

We will consider the environment as a special stakeholder later in the text.