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The Stakeholder Approach

Corporate Communication

NMH

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The roles of communications

• Informing

• Advocating

• Dialoguing

• Types of communication– One-way– Two-way (Symmetrical/Asymmetrical)

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Stakeholders

StockholdersGovernmentRegulatorsBoards of DirectorsCommunity leaders

StockholdersGovernmentRegulatorsBoards of DirectorsCommunity leaders

AssociationsPolitical groupsProfessional societies

AssociationsPolitical groupsProfessional societies

SuppliersUnionsEmployees

SuppliersUnionsEmployees

ConsumersIndustrial purchasersService users

ConsumersIndustrial purchasersService users

Environmentalists MediaCommunity residents VotersMinorities Women Other publics

Environmentalists MediaCommunity residents VotersMinorities Women Other publics

Normative linkages

Functional linkages

Input

OutputDiffused

Enabling

Organization’s external linkages

”...a group or individual who can have an effect on or be affected by the organization.” - Freeman (1984)

Organization

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Four Key Linkages

• Enabling Linkages

• Functional Linkages– Input linkages– Output linkages

• Normative Linkages

• Diffused Linkages

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Enabling Linkage

• Organization could not exist without this linkage– Authorities– Shareholders– Legal System

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Functional Linkage

• Linkage that give input and take output

• Input Linkage– Employees– Unions– Suppliers

• Output Linkages– Customers– Other organizations– Individual consumers

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Normative Linkage

• Organizations that have common problems or similar values– Membership organizations– Professional groups– Associations

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Diffused Linkage

• Elements in society that are not clearly identified as a formal member of organization– Environmentalists– Community Residents– Media– Other Publics

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Corporate identity and reputation

CorporateIdentity

Names,Self-Representations

CustomerImage

CommunityImage

InvestorImage

EmployeeImage

Corporate Reputation

Fombrun, C. J., Reputation, Harvard Business School Press

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Reputational risk management cycle

Corporate Citizenshi

p

Corporate Performanc

e

Safety

Net

Opportunity Platform

Reputational Capital

Fombrun, C. J. et al., “Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk,” Business and Society Review, 105:1, 85-106.

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Media

Activists

Investors

Employees

Partners

Customers

Regulators

Community

Safety

Net

Threat of BoycottThreat of Legal Action

Threat of Illegitimacy

Threat of Exposure

Threat of Misunderstanding

Threat of Defection

Threat of Rogue Behavior

Threat to Value

Managing the downside of reputational risk

Fombrun, C. J. et al., “Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk,” Business and Society Review, 105:1, 85-106.

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CommunityMedia

Activists

Investors

Employees

Partners

Customers

Regulators

Opportunity

Platform

Promise of advocacy

Promise of legal action

Promise of legitimacy

Promise of favorable coverage

Promise of loyalty

Promise of collaboration

Promise of commitment

Promise of value

Managing the upside of reputational risk

Fombrun, C. J. et al., “Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk,” Business and Society Review, 105:1, 85-106.

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What stakeholders want…

• Visibility information

• Virtue good organizational behavior

• Verifiability access to information

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The challenge...

“I’m sorry, but if you expect any self-respecting activist to believe a word you say about your commitment to human rights, then you are as arrogant as the PR firm that came up with this strategy.”

  - Unknown ‘activist’ quoted in ‘How do we stand?’ People, Planet &

Profits, A Summary of the Shell Report 2000, Newsweek.

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Mess management:

Multiple perspectives

Descriptions of perceived relevant activity

Yields choices of...

Comparison of descriptions with the perceived reality

Actions to improve the

situation

Influenced by individuals’ mental models

A real-world situation of

concern

A real-world situation of

concern

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Mental models• Deeply held images of how the world works.

Explicit understandings. Implicit understandings.

• Represent the most important factors and the relationships that link them.

• Provide the context in which to view and interpret new material.

• Determine how stored information is relevant in a given situation.

• Frequently treated as if they were the truth!

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Mental modelsThe ladder

of inferenceReflexive loop Our beliefs affect what data we select next time

I makeASSUMPTIONS

based on the meanings I add

I takeACTIONbased on my beliefs

I drawCONCLUSIONS

I addMEANING

(cultural and personal)

I selectDATA

from what I observe

Observable “data” and

EXPERIENCES(as a video recorder

might capture)

I adoptBELIEFSabout the

world

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Applying the Ladder of Inference

The ladder provides a means to ask questions... What is the observable data behind that

statement?

Does everyone agree on what the data is?

Can you run through your reasoning?

How did we get from that data to these abstract assumptions?

When you said “[your inference],” did you mean ”[my interpretation of it]”?

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Essential skills for working with mental models

Reflection Becoming more aware of your own thinking and

reasoning.

Inquiry Inquiring into others’ thinking and reasoning.

Advocacy Making your own thinking and reasoning more

visible to others.

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Working with mental models Balancing Inquiry and

Advocacy• A palette of conversational and dialogue skills.

• Protocols for balancing inquiry and advocacy.

• Conversational recipes...

Post hoc examination of conversations.

Seeking generic strategies for improving use of recipes.

Ask for other’s perspectives (inquiry).

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Co-orienting stakeholders’ mental models for improved

communication

Organization’s perception of

Stakeholder A’s views

Organization’s perception of

Stakeholder A’s views

Stakeholder A’s definition

and evaluation of an issue

Stakeholder A’s definition

and evaluation of an issue

Stakeholder A’s perception of

organization’s views

Stakeholder A’s perception of

organization’s views

Organization’s definition

and evaluation of an issue

Organization’s definition

and evaluation of an issue

UNDERSTANDINGAGREEMENT

ACCURACY

CONGRUENCYCONGRUENCY

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Co-orientation states• True consensus

– The parties know they share an agreement on their evaluation of an issue.

• Dissensus – The parties hold conflicting views and are aware of their

differences.• False consensus

– The organization believes that the stakeholder agrees with them on a particular issue, or

– The stakeholder group mistakenly believes that the organization holds the same view that they do.

• False conflict– The parties believe that they disagree on an issue when in fact

they agree.

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Dialogue as the basis for communications

• Models of communication– Shannon and Weaver (1949) – focus on the medium– Cognition-based models – focus on the message

• Dialogue “...a sustained collective inquiry into everyday

experience and what we take for granted.”Senge, et.al. (1994). The Fifth Discipline Fieldbook

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Discussion

• Ability to acquire information

• Identify threats and opportunities (proactively)

• Conduct research

• Engage in individual and organizational reflection

• Organizational changes

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Influences on multiple perspectives

Levels of analysis • Cultural

– The “Cultural Iceberg”

• Organizational– Environmental factors– Structural factors

• Individual– Cognitive factors– Personality factors

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The cultural iceberg

Primarily in awareness

Primarily out of awareness

fine arts literaturedrama classical music popular music

folk dancing games cooking dress

notions of modesty conception of beauty cosmology ideals governing childrearing rules of descent

relationship to animals patterns of superior subordinate relations definition of sin courtship practices conception of justice incentives to work

notions of leadership tempo of work patterns of decision makingconception of cleanliness attitudes towards the dependent theory of disease

approaches to problem solving conception of status mobility eye behavior

roles in relation to status by age, sex, class, occupation, kinship etc..

conversational patterns in social contexts conception of past and future

definition of insanity nature of friendship ordering of time conception of “self”patterns of visual perception preference for competition or cooperation

body language social interaction rate notions of adolescence

notions about logic and validity patterns of handling emotions facial expressions

arrangement of physical space ...AND MUCH, MUCH MORE...