stakeholder management theory

7/30/2019 Stakeholder Management Theory

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Any individual or group

Who can affect or is affected

By the actions, decisions,policies and practices or goals ofan organisation.

Two Types

Primary Secondary

Owners Media

Customers Consumers

Employees Courts and Govts.

Suppliers Competitors

Public and Society


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Government Employees

Business

Community

Consumers

Owners


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Businesses in their fiduciary relationship tostakeholders: Act in the best interests of the stakeholders Respect and fulfill the stakeholders rights

Relationship with external groups aiming atreaching win-win collaborative outcomes

Win-Win: making moral decisions that benefit thecommon good of all constituents in the givenconstraints

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Map SH relationships

Map SH coalition

Assess the nature of each SH interest

Assess the nature of each SH power

Construct a matrix of SH moralresponsibilities

Develop strategies and tactics

Monitor shifting coalitions

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Map SH relationships Current SH

Potential SH

How does each SH affect us? How do we affect each SH?

For each division and business, who are the SH?

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Map SH coalition Are formed around the stakes they have in

common

Competitors Interest Groups

Anticipate and design strategic responsestoward these groups

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Assess the nature of each SH interest Supportive

Non-supportive

Mixed blessing Marginal

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Stakeholder Type 4Mixed Blessing

Stakeholder Type 3Non supportive

Stakeholder Type 1Supportive

Stakeholder Type 2Marginal


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Assess the nature of each SH power Voting Power (exert control through number)

Political power(influence decision making)

Economic power(influence by control over resources)

Technological power (ability to influence innovations thrutechnology)

Legal power(influence laws and procedures)

Environmental power

Cultural power (influence values and norms)

Power over individuals and group)

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Identify SH Ethics and MoralResponsibilities To determine resp. and moral obligations the

company has towards each SH To develop strategies towards each shareholder

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Stakeholders Economic Legal Ethical Philanthropic

Owners

Customers

Employees

Community

Public at large

Social Activists

Other

SH RESPONSIBILITY MATRIX


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Develop specific strategies and tactics To approach each stakeholder directly or indirectly

To decide whether to do nothing, monitor, or take anoffensive or defensive position

To determine whether to accommodate, negotiate,manipulate, resist, avoid or wait and see

Finally, to decide what combination of strategies toemploy to achieve goal

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Stakeholder Type 4Mixed Blessing

Strategy:Collaborate

Stakeholder Type 3

NonsupportiveStrategy:Defend

Stakeholder Type 1Supportive

Strategy:Involve

Stakeholder Type 2

MarginalStrategy:Monitor

High

Low

StakeholdersPotential forCooperationWith

Organization

High Low

Stakeholders Potential for Threat to

Organization


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Goal is to create win - win set of outcomes

Keep mission and responsibility in mind beforeproceeding

Consider probable consequences of actions

Specific strategies can be articulated and assigned tocorporate staff for review and implementation

Remember.SR IS THE KEY VARIABLE

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Monitor shifting coalitions

Change in stakes and SH because of timeand events

Tracking external trends and events

A dynamic process that occurs over time

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Mixed Blessing-Chinese manufacturers

Non supportive-Victims who lost jobs

-Customers negatively affected bytoys

-Some competitors

-Employees negatively affected

Supportive-Mattels CEO and top level

team

-Many employees

-Many shareholders

Marginal-Some shareholders

-Some customers

-Some suppliers


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WHAT ETHICAL PRINCIPLE, CEO shouldfollow?

Utilitarian Approach?

Weigh cost and benefits of all strategies

and actions towards SH keepingcompanys interest in mind

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OR

Universalistic Approach Attempt to provide care to child harmed

Take immediate action to recall toysmanufactured in China

Have planned meetings with those in charge of

sub contractors Meet the victim families, media and powerful

govt. representatives to show concern

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A rational, systematic basis for understanding issuesand the ethics in action involved in complexrelationships between an organisation, its leaders andconstituents

Extent to which the resultant strategies and outcomesare moral and effective for a firm and its SH depends onfactors like:

Including the values offirms leaders SHs power

Legitimacy of actions

Use of available resources

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stakeholder management theory

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