Stakeholders and Issues Management Approaches

PRESENTED TO:• RESPECTED COL IJAZ KHALID

PRESENTED BY:• Muhammad Shahroze Ilyas• Mubeen Abdul Shakoor• Adeel Asif• Muhammad Fahad Khan

What is a stake?• A stake is any interest, share, or

claim that a group or individual has in the outcome of a corporation’ policies, procedures, or actions towards others.

What is a stakeholder?

• Individual or group that affects all aspects of decision making in an organization.

Stakeholder’s Approach • Theory that preaches ethical

behavior in order to gain a competitive advantage.

• Strives to reach “win-win” outcomes.

• Companies that practice this theory in their industry tend to get a leg up on their competitor. i.e. Lowes v Home Depot.

Stakeholder Analysis• Assist in the understanding between an

organization and its constituents. • Due to the uniqueness of each situation, the

approach must be mapped out in order to develop a strategy.

• The framework is developed not only for individuals in high ranking positions, but also so any employee may see the corporate dealings.

Who Are Business Stakeholders?

Government Employees

Business

Community

Consumers

Owners

Who Are Business Stakeholders?

Primary and Secondary Stakeholders•Primary stakeholders are those stakeholders that have a direct stake in the organization and its success

•Secondary stakeholders are those that have a public or special interest stake in the organization

Who Are Business Stakeholders?

Core, Strategic, and Environmental Stakeholders• Core stakeholders are essential to the survival of the firm• Strategic stakeholders are vital to the organization and the threats and opportunities the organization faces• Environmental stakeholders are all others in the organization's environment

Who Are Business Stakeholders?

• Legitimacy refers to the perceived validity of the stakeholder’s claim to a stake

• Power refers to the ability or capacity of a stakeholder to produce an effect

• Urgency refers to the degree to which the stakeholder’s claim demands immediate attention

Legitimacy, Power, Urgency: A Typology of Stakeholder Attributes

Role of the CEO in Stakeholder Analysis • The role of a CEO is to get a handle of the

situation to help approach and mediate concerns from customers, media, etc.

• CEO is there to answer the who, what, where, why, when, and how of the situation

Stakeholder Analysis in 7 Steps

1. Map stakeholder relationships2. Map stakeholder coalitions3. Assess the nature of each stakeholder’s

interest4. Assess the nature of each stakeholder’s

power5. Construct a matrix of stakeholder moral

responsibilities6. Develop specific strategies and tactics7. Monitor shifting coalitions

Stakeholder Dispute Resolution Methods

• Dispute resolution is a tactic also known as “alternative dispute resolution”

• Dispute resolution is a variety of methods to help possible litigants resolve conflicts

• Ranges from parties taking control of process to giving control to a third party – i.e. face to face negotiation and litigation

Ethical Reasoning for Stakeholders

• Ethical reasoning involves trying to analyze what is fair and who is being affected by the actions.

• Involves helping and identifying the weaker and quiet stakeholders getting their voices heard in the decision process

• What can be done when stakeholder are not being treated fairly?

Moral Responsibilities • The analysis ensures that managers are prepared to

define their own moral responsibilities, as well as those of the company.

• The approach focuses the organization’s attention on both internal and external areas.

• Managers are liable for the morals of the company, that can quickly be made public due to technology.

• If a stakeholder knows the roles, it clarifies the responsibilities of the task.

Issue Management• Issue management is used to

forecast the actions to take for emerging factors that have an impact on organizations and stakeholders.

• Controversy can be avoided if proper issue management is implemented.

• The evolution of an issue can be traced with proper issue management.

•

Moral Dimension of Stakeholder and Issue Management

• Studies argue that being moral is “issue dependent”

• They argue that the severity of the issue is what triggers reasoning.

• Morals are necessary in leadership positions, as the decisions affect all stakeholders.

• Identifying issues and ensuring that they are moral is a goal for all managers to benefit their company.

The Two Frameworks • Frameworks can be used to

map and manage issues before they arise.

• Frameworks can also be used to plan and manage to prevent, or to handle issues that may have already arisen.

• Frameworks are not organization specific

• Stakeholder analysis can display why strategies and actions stunt the evolution of an organization.

First Approach• The six-step issue management

process.– Environmental scanning and

issues identification.– Issue analysis– Issue ranking prioritizing– Issue resolution strategizing– Issue response and

implementation– Issue evaluation and monitoring

.

Second Step• Seven-phase issue

development process. – A felt need arises– Media coverage is

deployed– Interest group

development – Policies are adopted by

leading political jurisdictions

– The federal government gives attention to the issue.

– Issues and policies evolve into legislation and regulation

– Issues and policies enter litigation.

•

Managing Crises • Crisis management emerged from

observing how corporations and leaders react to crises.

• Steven Fink describes crisis as “a turning point for better or worse.”

• The direction that organization moves into is dependent on the leaders’ reaction.

Four Crisis Management Stages

– Pre-crisis• Prodromal stage

– Warming; symptoms• Crisis Occurs

– Acute stage• Point of no return

• Lingering– Chronic stage

• Self-doubt, self-analysis• Health restored

– Conflict resolution stage• Return to normalcy

First Stage• Prodromal Stage• Warning stage • Does not always occur or is not evident.• This stage should be carefully observed.• Must be taken seriously in order to prevent crisis.• If does not occur, or is ignored, the point of no

return quickly occurs.

Second Stage

• Acute Crisis• Damage has already occurred• Damage control must be administered • Stage where the severe damage occurs• Considered the shortest stage

Third Stage• Chronic crisis• Clean up phase • Time of healing, recovery

,and self analysis • Studies have shown

when there is no crisis plan set companies stay in this phase 2.5 time longer

Fourth Stage

• Crisis Resolution • Final stage – Crisis Management Goal • “What can and should an

organization do to speed up this phase and resolve crisis once and for all?”

Strategic, Multifiduciary, and Synthesis Views of Stakeholders

• Strategic approach considers stakeholders primarily as factors managers should manage in pursuit of shareholder profits

• Multifiduciary approach considers stakeholders as a group to which management has a fiduciary responsibility

• Synthesis approach considers stakeholders as a group to whom management owes an ethical, but not a fiduciary responsibility

Effective Stakeholder ManagementCareful assessment of the five core

questions:• Who are our stakeholders?• What are our stakeholders’ stakes?• What opportunities and challenges do

stakeholders present? • What economic, legal, ethical, and

philanthropic responsibilities does our firm have?

• What strategies or actions should our firm take to best manage stakeholder challenges and opportunities?

Stakeholder Power:Four Gates of Engagement

• Awareness• Knowledge• Admiration• Action

Principles of Stakeholder Management

• Acknowledge • Monitor• Listen• Communicate• Adopt• Recognize• Work• Avoid• Acknowledge

conflict

Any Questions?