an introduction to stakeholder theory
Post on 21-Jan-2015
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- 1. Stakeholder theory Stakeholder management and strategic planning
2. Two broad stakeholder theories
3. Theory one
- Milton Friedman focus on the shareholders as they only stakeholders who matter. The business of business is making a profit and building shareholder value the prime purpose.
4. Theory two
- * The quickest way to destroy shareholder value is to ignore stakeholders
5. Where did it start?
- R. Edward Freeman (1984)
- Stakeholder theory is about identifying the groups who are stakeholders in a corporation and need to be managed
6. Why are stakeholders important?
- Corporations and organisations operate with the consent of the community.
- Communities comprise groups of stakeholders
- Winning the consent of these stakeholders provides a licence to operate
7. Who are stakeholders?
- The directly involved:
- - investors
- - employees
- - suppliers
- - customers
8. Other stakeholders
- Political parties
- Trade unions
- Community groups
- Plant neighbours
9. A key question for you
- Is the media a stakeholder?
10. Why pay attention to stakeholders?
- Moral or philosophical reasons corporate social responsibility
- Practical reasons licence to operate
- Strategic planning reasons identifying opportunities and threats
11. Some key management questions
- Why should specific companies pay attention to stakeholders?
- Who are the organisations stakeholders? How do we identify them?
- What is the basis for their interest/legitimacy?
- What do they want?
12. Some key management questions
- Which stakeholders are most important? How do we set priorities?
- Do we need separate strategies for different stakeholder groups?
- Can we reach all stakeholder groups?
- How do we balance stakeholder interests?
13. Managing stakeholders a strategic context
- The quality of relationships with stakeholders are the key determinant of corporate reputation
- Stakeholder management is the core of public affairs management
- Symmetric and asymmetric communication theory is relevant to stakeholder management
14. Managing stakeholders an communications approach
- Identify the stakeholders
- Identify the relationship you want with them
- Identify the urgency/timing need for communicating with them
- Identify their information needs
- Identify the best communication channel
15. Some practical examples
- Employees face to face as frequently as possible
- Investors as laid down by ASX/ASIC regulations
- Governments building up goodwill for the future
- The media when and where appropriate
16. Managing stakeholders a PA and issues management approach
- Craig Fleishers emerging PA model:
- Managing PA and issues management on a year round process
- Cultivating and maintaining enduring stakeholder relationships
- Influencing stakeholders using refined information
- Managing the grassroots
17. Fleisher model
- Communicating in an integrated manner
- Continually aligning values and strategies with the publics interests
- Improving external relationships using contemporary management practices
18. Using PA planning techniques
- Identify stakeholder management needs as an integral part of:
- Issues monitoring and environmental scanning
- Analysing threats and being sceptical
- Using standard analytical tools: SWOT, PEST, Porter model
19. Planning techniques
- Undertaking scenario planning: What ifs?
- Constantly testing internal perception against external realities
- Creating risk, opportunity and issues profile
- Producing issues maps and stakeholder matrices
20. Setting priorities
- Categorise stakeholders by:
- Stakeholders directly interested in your success
- Allies and potential allies
- Entrenched opponents
- Independent monitors and opinion formers
21. Management strategies
- Directly interested recruit as advocates
- Allies encourage
- Opponents neutralise
- Independents maintain dialogue
- Uninvolved monitor and anticipate
22. Some conclusions
- Two theories empirically one wrong and one right
- Focus on identifying stakeholders and why they are important
- Integrate stakeholder management into strategic planning
- Set stakeholder priorities