Internal stakeholders of a business are people who have a vested interest in
the company i.e., they benefit financially if the company does well and vice-
versa. They include employees, managers and investors. External stakeholders
of a business include 2 groups of people:
1. People who do business with the company or are dependent on the company.
For instance, suppliers depend on business generated by the company; customers
use the products and they'll want good quality products at cheap prices;
government depends on the company for tax receipts
2. People who do not depend on the company but are indirectly affected by it.
For instance, in the case of an off-shore oil exploration and drilling
company, fishermen in the region are directly affected. Moreover, if the
drilling is close to the shore, the tourism industry in the region could be
affected. In this instance, the whole of the community living close to the
drill site are external stakeholders
The main difference between internal and external stakeholders is how much of
an effect a company has on them. The internal stakeholders are heavily
invested in the company and they will want the company to succeed at any cost.
If the company goes bankrupt, they stand to lose a lot. On the other hand, the
external stakeholders will be affected but do not have to deal with such
massive losses if a company is liquidated. They usually switch to other
companies for business. However, of late, we have witnessed the effects of
reckless decisions made by companies on external stakeholders. Examples that
come to mind are BP's Macondo oil spill, the Chernobyl disaster, Fukushima
Daiichi nuclear disaster.