Organizational and Manageial Communication Stakeholder Management Chapter 6

Organizational and Manageial Communication Stakeholder Management Chapter 6 Peggy Simcic Brønn

Stakeholder z Any group or individual who can affect or is affected by the achievement of an organization’s purpose. z They have a ‘stake’ in the organization. z Encompasses a broad range of groups and individuals, some with little impact, some with great impact. Edward R. Freeman, 1984, Strategic Management: A Stakeholder Approach, Marshfield, MA: Pitman. Peggy Simcic Brønn 2

Identifying Organization’s Linkages to Stakeholders z Who are organization’s stakeholders? y. No general group, but identified by common problem y. Vary from case to case y. Dependent on what organization does and how other individuals and organizations react to organization’s behavior z Key: What consequences of organization’s activities will have on its stakeholders and how do these consequences affect each other? Peggy Simcic Brønn 3

A Stakeholder Map Peggy Simcic Brønn 4

Specific Stakeholders of a Large Organization Owners Shareowners Bondholders Employees National Banks Financial Community Analysts Investment Banks Commercial Banks’ Single Issue Groups Activist Groups Safety and Health Groups Environmental Groups Big Business’ Groups Suppliers Firm #1 Firm #2 Firm #3 Etc. Government Congress/Parliament Courts Cabinet/Departments Agency #1 Agency #2 Political Groups Political Party #1 Political Party #2 National League of Cities National Council of Mayors Etc. Customers Segment #1 Segment #2 Etc. Customer Advocate Groups Consumers’ Union Council of Consumers Attac Unions Union of Workers #1 Union of Workers #2 Political Action Committees of Unions Employees Segment #1 Segment #2 Etc. Trade Associations Business Roundtable Customer Trade Org. #1 Etc. Competitors Domestic Competitor #1 Domestic Competitor #2 Foreign Competitor #1 Peggy Simcic Brønn 5

Stakes of Selected Stakeholders Customer Segment #1 High Users of Product Improvement of Product Political Parties #1 and #2 High Users of Product Able to Influence Regulatory Process Able to Get Media Attention on a National Scale Customer Segment #2 Low Users of Product No Available Substitute Consumer Advocate #1 Effects of XYZ on the Elderly Employees Jobs and Job Security Pension Benefits Consumer Advocate #2 Safety of XYZ’s Products Owners Growth and Income Stability of Stock Price and Dividends Peggy Simcic Brønn 6

Examples of Indirect or Coalition Strategies Peggy Simcic Brønn 7

Classical Stakeholder Grid Peggy Simcic Brønn 8

’Real World’ Stakeholder Grid Peggy Simcic Brønn 9

Strategic planning including stakeholders Peggy Simcic Brønn 10

The ’Stakeholder Dilemma’ Game Peggy Simcic Brønn 11

Method for Mapping Linkages of an Organization (Grunig and Hunt, 1984) Stockholders Government Regulators Boards of Director Community Leaders ENABLING INPUT Employees Associations Unions NORMATIVE Political FUNCTIONAL Suppliers Organization LINKAGES Groups LINKAGES Professional Consumers Societies OUTPUT Industrial DIFFUSED Purchasers Users of Service Environmentalists Community Residents Voters Media Minorities Women Other. Peggy Publics Simcic Brønn 12

Four Key Linkages z. Enabling Linkages z. Functional Linkages y. Input linkages y. Output linkages z. Normative Linkages z. Diffused Linkages Peggy Simcic Brønn 13

Functional Linkage z Linkage that give input and take output z Input Linkage y. Employees y. Unions y. Suppliers z Output Linkages y. Customers y. Other organizations y. Individual consumers Peggy Simcic Brønn 14

Enabling Linkage z. Organization could not exist without this linkage y. Authorities y. Shareholders y. Legal System Peggy Simcic Brønn 15

Diffused Linkage z. Elements in society that are not clearly identified as a formal member of organization y. Environmentalists y. Community Residents y. Media y. Other Publics Peggy Simcic Brønn 16

Normative Linkage z. Organizations that have common problems or similar values y. Membership organizations y. Professional groups y. Associations Peggy Simcic Brønn 17