Slide- CH 4 (1)

• Stakeholder engagement involves efforts by a corporation to understand and involve relevant individuals, groups, or organizations by considering their moral concerns
• Issue analysis is an effort to understand the source, nature, and extent of a question or matter in dispute facing a corporation, which will result in addressing or resolving the matter
• Basic Stakeholder Analysis involves corporations asking questions like:

  • Who are our stakeholders?
  • What are their stakes?
  • What opportunities and challenges are presented to our firm?
  • What responsibilities does our firm have to all its stakeholders?
  • What strategies or actions should our firm use to deal with stakeholder challenges and opportunities?
• Freeman's Stakeholder Management Capability refers to the ability of managers to identify stakeholders and their influence, develop organizational practices to understand stakeholders, and undertake direct contact with stakeholders
• Stakeholder Matrix Mapping is a technique of categorizing an organization’s stakeholders by their influence according to two variables and plotting them on a two-by-two matrix:

  • Y Axis: Oppose or support corporation
  • X Axis: Importance of stakeholders
  • Allows managers to assess the power of stakeholders to achieve their demands and whether they have the means or resources to influence
• The Position/Importance Stakeholder Matrix categorizes stakeholders into:

  • Problematic stakeholders: oppose the organization’s course of action and are relatively unimportant
  • Antagonistic stakeholders: oppose or are hostile to the organization’s course of action and are very important
  • Low priority stakeholders: support the organization’s course of action and are relatively unimportant
  • Supporter stakeholders: support the organization’s course of action and are important
• The Diagnostic Typology of Organizational Stakeholders classifies stakeholders into four types based on their potential to threaten or cooperate with the organization:

  • Type 1: Supportive stakeholder and strategy
  • Type 2: The marginal stakeholder and strategy
  • Type 3: The non-supportive stakeholder and strategy
  • Type 4: The mixed-blessing stakeholder and strategy
• Stakeholder Identification and Salience is based on stakeholder possession of attributes like power, legitimacy, and urgency, enabling managers to categorize stakeholder-management relationships systematically
• Stakeholder Influence Strategies involve stakeholders acting to influence the organization's decision-making or behavior, often through resource dependence where a stakeholder supplies a resource and can exert control over it
• Stakeholder influence strategies:

  • Resource dependence: exists when a stakeholder supplies a resource and can exert control over it
  • Means of control: withholding strategies (discontinuing a resource to change behavior) and usage strategies (specifying how a resource is used)
  • Relationships between stakeholders can lead to influence pathways where strategies are used by an ally of the stakeholder with whom the organization has a resource dependence
• Stakeholder collaboration aims to establish and maintain relationships that allow organizations to tap into powerful sources of energy, ideas, and wider networks
• Approaches to corporate-stakeholder relations:

  • Stakeholder management: fragmented among various departments, focuses on managing relationships, linked to short-term business goals
  • Stakeholder collaboration: integrated management approach, focuses on building relationships, linked to long-term business goals
• FOSTERing framework for organizations to develop collaborative stakeholder relationships involves six steps: creating a foundation, organizational alignment, strategy development, trust building, evaluation, repeat the process
• Issue management process includes six steps: identification of issues, analysis of issues, ranking or prioritizing of issues, formulating issue response, implementing issue response, monitoring and evaluating issue response
• Issue analysis involves two approaches: the issues management process and issue salience (materiality) analysis
• Issue materiality (sustainability materiality) refers to a question or matter that is sufficiently important to warrant management's attention, reported if it reflects the organization's significant economic, environmental, and social impacts and influences stakeholders' assessments and decisions
• Issue materiality matrix ranks issues in decreasing order of importance, with priority given to upper right-hand corner issues, followed by upper left and lower right corner issues, while issues in the lower left corner are of little importance to stakeholders or management
• Frooman's influence strategies provide a perspective on understanding stakeholders, emphasizing that stakeholders can influence one another and the corporation directly and indirectly, through withholding or specifying usage conditions
• Collaboration changes the approach from managing stakeholders to dialoguing with them, fostering a more integrated and company-wide responsibility for stakeholder collaboration assigned to senior executives
• Issue materiality analysis has a logical connection to stakeholder analysis, examining stakeholders and issues together to increase management understanding of the environment in which the corporation operates