Notes on organisational stakeholders


By Alan Stretton 

Sydney, Australia


In 2010 I wrote a paper in PM World Today on “Identifying and classifying program/ project stakeholders” (Stretton 2010e), which attracted significant attention. That paper is reproduced in this edition of PM World Journal as a Second Edition. These notes extend the topic of that paper into the somewhat broader canvas of business organisations at large, and the ongoing challenge of attempting to balance the often conflicting needs and expectations of a very wide range of involved and interested parties.

Two broad types of interested parties are first identified – ‘stakeholders’ are those who have a positive interest in the organisation’s prosperity; and ‘constituencies” are those who don’t, but have the potential to disrupt, or even veto, some organisational activities.

We first look at a balancing process which Peter Drucker called ‘satisficing’, as applied to both constituencies, and shareholders. We then look at prioritizing key stakeholders needs/ expectations in a general context. Key stakeholders are typically clients/customers, employees and shareholders. Discussions about balancing their needs then mainly focus on what happened in Lend Lease Corporation in these contexts, with commentary. Some of the findings are related back to the project management context.


We start with identifying two types of interested parties – stakeholders and constituencies. 


In these notes, I will define stakeholders in a narrower sense than used in my Second Edition paper. In the following, stakeholders will mean only those interested parties who have a direct positive stake in the business, and in its prosperity.

Such stakeholders will normally include:

  • the people who invest in it             – shareholders and other providers of finance
  • the people who work in it   – employees, including managers
  • the people who buy from it – clients and customers
  • the people who supply it    – vendors, providers of goods and services
  • the people who live near it             – immediate neighbours; some other community group 


I will call the other type of interested party constituencies, following an old definition by Peter Drucker (Drucker 1981). This definition was not widely adopted by others, but is useful in the context of these notes. Drucker defined constituencies as

… groups accepted as entitled to a say, or at least a veto, even though they may have little or no say in the institution’s primary mission and purpose.

In Australia, constituencies may include trades unions, regulatory authorities, and some special-interest community groups.

Managers of business organizations are commonly concerned about finding a balance between the various, and often conflicting, demands and expectations of the organisation’s stakeholders and constituencies. Several different approaches to establishing such a balance can be identified. 


To read entire paper (click here) 

About the Author

flag-australiaalan-stretton-bioAlan Stretton, PhD    

Faculty Corps, University of Management

and Technology, Arlington, VA (USA)

Life Fellow, AIPM (Australia) 

Alan Stretton is one of the pioneers of modern project management.  He is currently a member of the Faculty Corps for the University of Management & Technology (UMT), USA.  In 2006 he retired from a position as Adjunct Professor of Project Management in the Faculty of Design, Architecture and Building at the University of Technology, Sydney (UTS), Australia, which he joined in 1988 to develop and deliver a Master of Project Management program.   Prior to joining UTS, Mr. Stretton worked in the building and construction industries in Australia, New Zealand and the USA for some 38 years, which included the project management of construction, R&D, introduction of information and control systems, internal management education programs and organizational change projects.  He has degrees in Civil Engineering (BE, Tasmania) and Mathematics (MA, Oxford), and an honorary PhD in strategy, programme and project management (ESC, Lille, France).  Alan was Chairman of the Standards (PMBOK) Committee of the Project Management Institute (PMI®) from late 1989 to early 1992.  He held a similar position with the Australian Institute of Project Management (AIPM), and was elected a Life Fellow of AIPM in 1996.  He was a member of the Core Working Group in the development of the Australian National Competency Standards for Project Management.  He has published over 140 professional articles and papers.  Alan can be contacted at [email protected].