How to identify and manage stakeholders

Who are the stakeholders in the procurement process?

Stakeholders in the procurement process can be divided into two main categories, either internal, or external.

• Internal stakeholders:
  Internal stakeholders and people that are connected to the organisation. They have a strong influence on how the organisations is run and its success. These people could be, shareholders, owners, employees, board members, directors, managers

• External stakeholders:
  External stakeholders are diverse and are not linked or contractually obligated to your organisation, however they do have an interest in the organisation's activities. These people could be local communities, investors, government, media, trade unions, competitors.

Who are the stakeholders in supply chain management?

Stakeholders in the supply chain are a more completed group and are known as connected stakeholders. Connected stakeholders are individuals, or organisations, that have a relationship in a contractual capacity to your organisation.

• Shareholders:
  Return on investment and corporate governance. Shareholders will have significant power at company meets and the ability to influence share price.
• End customers:
  Interested in the satisfaction of products, in terms of value for money, quality and service experience. End customers provide a useful source of feedback and have the power to switch or withdraw custom.
• Distributors/Retail outlets:
  Interested in ethical and efficient trading practices and sales support. These stakeholders help to promote and distribute products and have the power to withhold distribution.
• Suppliers:
  Interested in efficient transactions and relationship handling, with fair procedures and timely payment. Suppliers have a key input in quality, price and time and share their expertise for product development.
• Financial institutions:
  Financial institutions: Interested in the financial strength and stability of the organisation. They offer short- and long-term loans and have the power to restrict of withdraw any credit facilities.

The actions or inactions of one group in the chain can affect all the stakeholders in the chain. Managing this group is more complex and may require you to ‘think locally, act globally,’ whilst implementing expertise and innovation in your communication techniques.

What is an upstream or downstream stakeholder?

Upstream or downstream stakeholders refer to the groups of stakeholders that are engaged at each point in the supply chain process.

Upstream stakeholders:
The group of people that supply the goods or services to be delivered, this could include raw materials suppliers, logistic providers.

Downstream stakeholders:
The consumer or customers that receives the goods or services.

Identifying all procurement and supply chain stakeholders at the start will help you understand any impact at each stage in the process.

Eight key elements of stakeholder management

With many stakeholders involved within an organisation, knowing how to manage them is important. Here are the eight fundamental elements of stakeholder management.

• Support:
  Be supportive throughout the process
• Empathy:
  Listen to their worries, needs and concerns and act
• Transparency:
  Keep stakeholders up to date 
• Communication:
  Share information with your stakeholders
• Feedback:
  Give regular feedback on organisations activities
• Consultation:
  Ask for their feedback and consult with stakeholders before making decisions
• Engagement:
  Engage in active discussions and involve stakeholders at all levels
• Inclusion:
  Make sure stakeholders are included within organisations activities

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