copyright © 2008 mcgraw-hill ryerson ltd.1 chapter four understanding stakeholder relations...

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ChapterFour

Understanding Stakeholder Relations

Canadian Business and Society: Canadian Business and Society: Ethics & ResponsibilitiesEthics & Responsibilities

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Chapter Outline

Basic Stakeholder AnalysisStakeholder Management CapabilityStakeholder Matrix MappingDiagnostic Typology of Organizational

StakeholdersStakeholder Identification and SalienceExamples of Stakeholder TypesStakeholder Influence StrategiesStakeholder CollaborationStakeholders and Social Capital

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Basic Stakeholder Analysis

1. Who are our stakeholders?2. What are their stakes?3. What opportunities and challenges are

presented to our firm?4. What responsibilities (economic, legal, ethical,

and philanthropic) does our firm have to all its stakeholders?

5. What strategies or actions should our firm take to best deal with stakeholder challenges and opportunities?

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Stakeholder Management Capability

The ability of managers to: (1) identify stakeholders and their

influence;

(2) develop the organizational practices to understand stakeholders; and

(3) undertake direct contact with stakeholders.

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Stakeholder Matrix Mapping

A technique of categorizing an organization’s stakeholders by their influence according to two variables; usually involves plotting them on a two-by-two matrix: Y Axis: Oppose or support corporationX Axis: Importance of stakeholders

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The Position / Importance Matrix

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Diagnostic Typology of Organizational Stakeholders

Source: Savage et al., 1991

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Stakeholder Identification and Salience

Powerability to get firm to do something that it would not

otherwise do based on force, threat, incentives, etc. Legitimacy

Perception or assumption that actions of firm are desirable, proper, or appropriate within a socially constructed set of norms, values, beliefs, and definitions

Urgencydegree to which stakeholder’s claim or relationship calls

for immediate attention (time sensitive and important)

Source: Mitchell et al., 1997

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Stakeholder Typology

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Examples of Stakeholder Types

Latent stakeholdersManagers may not recognize their existence

Expectant stakeholdersRequire more attention from managers

Definitive stakeholdersManagement must address the claims of these

stakeholders immediately

Non-stakeholdersSource: Mitchell et al., 1997

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Stakeholder Influence Strategies

Withholding strategiesstakeholder discontinues providing a resource

Usage strategiesstakeholder continues to supply resource but specifies

how it is to be used

Influence pathwaywhen withholding and usage strategies are used by an

ally of the stakeholder

Source: Frooman, 1999

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Typology of Influence Strategies

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Stakeholder Collaboration

Creating a foundationOrganizational alignmentStrategy developmentTrust buildingEvaluationRepeat the process

Source: Svendsen, 1999

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Stakeholders and Social Capital

Definition: Any aspect of a corporation’s organizational arrangement that creates value and facilitates the actions of stakeholders within and external to the corporation.

Building TRUST or GOODWILL

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3 dimensions of Social Capital

From Svendsen, Boutilier and Wheeler

1. Structural - networks that represent relationships

2. Relational - trust and reciprocity

3. Cognitive - mutual understanding

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Leads to 3 benefits

Willingness to share informationWillingness to exert one’s influence or

power to benefit the otherGroup cohesiveness