Textbook- CH 4

• Stakeholder analysis in an organization involves:

  • Identifying stakeholders
  • Understanding their stakes
  • Recognizing opportunities and challenges presented to the firm
  • Acknowledging the responsibilities (economic, legal, ethical, and philanthropic) the firm has to all its stakeholders
  • Deciding on strategies or actions to best deal with stakeholder challenges and opportunities
• A stakeholder analysis worksheet includes sections for stakeholders that influence the organization and those influenced by it
• Freeman's Stakeholder Management Capability involves three levels:

  1. Identifying the organization's stakeholders and their perceived stakes

  2. Determining the organizational processes used to manage relationships with stakeholders

  3. Understanding the transactions or bargains between the organization and its stakeholders
• Stakeholder Relations strategy advises senior management on issues and risks to stakeholder relationships, networks key stakeholders to gather intelligence on their concerns, attitudes, current work, and upcoming projects
• GHD, Senior Stakeholder Engagement and Communication Specialist, Waterloo, involves building the company’s stakeholder engagement and strategic communication business by providing services such as public consultation, outreach and education, risk communication, crises communication, and stakeholder engagement
• Gibson Energy ULC, Communications & Community Engagement Analyst, Calgary, assists in the development and execution of communications and external engagement initiatives, various stakeholder engagement and corporate social responsibility activities including tracking and reporting metrics
• Coca-Cola Company, Sr. Manager, Sustainability and Community Relations, Toronto, focuses on developing and executing a strategy that elevates the company’s social license to operate and working with partnerships to maximize its position as a community and environmental leader in Canada
• Freeman’s work is the basis upon which other approaches to understanding stakeholders were formulated
• Stakeholder Matrix Mapping involves categorizing an organization’s stakeholders by their influence according to two variables, usually plotted on a two-by-two matrix
• Four categories of stakeholders result from the Position/Importance Matrix analysis:

  • Problematic stakeholders
  • Antagonistic stakeholders
  • Low priority stakeholders
  • Supporter stakeholders
• Strategies for dealing with different stakeholder categories:

  • Problematic stakeholders: target moderate stakeholders with educational programs, adjust corporate plans, prepare defensive plans
  • Antagonistic stakeholders: identify potential coalitions, prepare for objections, engage in bargaining, determine plan changes
  • Low priority stakeholders: provide educational programs, promote involvement with supporters
  • Supporter stakeholders: provide information to reinforce position, ask supporters to influence indifferent stakeholders
• The Diagnostic Typology of Organizational Stakeholders categorizes stakeholders into supportive, marginal, non-supportive, and mixed blessing types, each requiring different management strategies
• Strategies for managing relationships with stakeholders:

  • Develop objectives for the organization’s relationship with current and possible stakeholders
  • Transform stakeholder relationships from less favorable to more favorable if appropriate
  • Strategies should aim to satisfy the needs of marginal stakeholders minimally and supportive stakeholders maximally
• • Consumer groups: unlikely to act as 75% of consumers do not view as issue
  • Credit unions: some do not charge customers fees; may decide to promote this feature
  • Non-supportive/Defend Strategy:
  • New Democratic Party (NDP) raised the issue
  • House of Commons Finance Committee: may force government to take action
  • Consumers: 25% who are charged feel disadvantaged and overcharged
  • Some media, for example Toronto Star, very critical of banks
  • Society at large: general mistrust and dislike of banks due to high profits and poor service
• Stakeholder types and strategies:

  • Mixed Blessing/Collaborate Strategy:
  • Government: non-interventionist, but could make election issue
  • Minister of Finance: has power to regulate, but prefers not
  • Competing banks: have same fee structure, but one may decide to go for lower or no fee
  • Media: balanced reporting of issue, but do give voice to critics; also cover banks’ views on issue
  • Supportive/Involve Strategy:
  • Canadian Bankers Association: preparing case in support of existing fee structure
  • University finance professors: view fees as “user pay”; research indicates fees reasonable
  • Shareholders: keep informed and more concerned with dividends
  • White-label ATM providers: may be concerned with future revenue and connections with banks
  • Marginal/Monitor Strategy:
  • Consumers: 75% not charged for service; no concern
• Stakeholder attributes:

  • Power: ability to influence another social actor to do something they wouldn't otherwise do
  • Legitimacy: perception that actions of an entity are desirable within a system of norms and values
  • Urgency: degree to which a stakeholder's claim calls for immediate attention
• Influence strategies for stakeholders:

  • Resource dependence theory used to understand stakeholder influence
  • Stakeholders can use withholding strategies (discontinuing a resource) or usage strategies (specifying conditions for resource use)
  • Influence pathways can involve direct strategies (stakeholder manipulates flow of resources) or indirect strategies (stakeholder works through an ally to manipulate resources)
• Influence strategies available to stakeholders were summarized by Frooman in a typology based on stakeholder and corporation dependence, resulting in four possible strategies
• The four influence strategy possibilities are:

  • Indirect/usage: stakeholder dependent on corporation, corporation not dependent on stakeholder
  • Indirect/withholding: low interdependence, neither dependent on the other
  • Direct/withholding: stakeholder not dependent on corporation, corporation dependent on stakeholder
  • Direct/usage: high interdependence, both dependent on each other
• Managers can anticipate and understand possible influence strategies by stakeholders to counter them effectively
• Stakeholder collaboration has shifted the focus from management to collaboration, aiming to build reciprocal, evolving relationships for mutual benefit and competitive advantage
• Svendsen's FOSTERing stakeholder relationships framework involves steps like creating a foundation, organizational alignment, strategy development, trust building, evaluation, and repeating the process
• Issue analysis includes the issues management process with steps like identification, analysis, ranking, response formulation, implementation, and monitoring and evaluating
• Attachment is a strong reciprocal emotional bond between an infant and a primary caregiver

  
• Schaffer and Emerson's 1964 study on attachment:

  • Aim: identify stages of attachment / find a pattern in the development of an attachment between infants and parents
  • Participants: 60 babies from Glasgow
  • Procedure: analysed interactions between infants and carers
  • Findings: babies of parents/carers with 'sensitive responsiveness' were more likely to have formed an attachment
• Telecommunications corporations must consult with residents if tower height is over 15 meters; if less, they can erect towers without consultation
• Issue: How can telecommunications corporations erect needed cell phone towers in a socially responsible manner?
• Freud's superego is the moral component of the psyche, representing internalized societal values and standards
• Stakeholders involved in cell phone tower erection:

  • Cell phone users
  • Community residents
  • Federal government
  • Local governments
  • Competitors
  • Health professionals
  • Churches
  • Shareholders
  • Media
• Managers must identify and recognize all relevant stakeholders for their corporation and those that have influence on particular issues relating to the corporation’s operations
• Issue materiality is a question or matter sufficiently important to warrant management’s attention, reflecting significant economic, environmental, and social impacts
• Stakeholder analysis involves identifying stakeholders and assessing their influence, considering concepts like power, legitimacy, and urgency
• Corporations develop "stakeholder management capability" through:

  • Identifying stakeholders
  • Organizing processes for understanding stakeholders
  • Establishing relations
• A job description for a "manager of stakeholder relations" would involve tasks like:

  • Identifying stakeholders
  • Building relationships
  • Addressing stakeholder concerns
• Stakeholder matrix mapping helps managers visualize and prioritize stakeholders based on their power, legitimacy, and urgency
• Stakeholders can be managed through understanding their needs and concerns, building relationships, and addressing issues effectively
• Power, legitimacy, and urgency concepts assist managers in assessing stakeholder salience by determining the importance and influence of each stakeholder
• Stakeholder influence strategies impact corporations by shaping relationships, decisions, and overall reputation
• Performing stakeholder and issue analyses benefits management by providing insights into stakeholder needs, concerns, and potential impacts on the business
• Freeman's three levels of "stakeholder management capability" are illustrated by:

  • Stakeholder analysis worksheet
  • A stakeholder manager position
  • Stakeholder matrix mapping