1.

Briefly describe the seven steps of stakeholder analysis

Step 1 : Mapping stakeholder relationships

In 1984, R. Edward Freeman offered questions that help begin the analysis of identifying major
stakeholders. The first five questions in the figure offer a quick jump-start to the analysis. Questions 6
through 9 may be used in later steps, when you assess the nature of each stakeholders interest and
priorities.
Continue to example with me as CEO. While brainstorming about questions 1 through 5 with
employee that I had selected with the most knowledgeable, current, and close to the sources of the issues
at hand, draw a stakeholder map with blanks is filled. Stakeholder analysis is only as valid and reliable as
the sources and process to obtain the information. As a CEO in this hypothetical scenario, which is
controversial, incomplete, and in which questionable issues arise, may wish to go outside immediate
planning group to obtain additional information and perspective. The stakeholder map must be identified
and completed by inserting each relevant stakeholder involved in the particular issues that studied.
For example, examining the BP spill and you were not the CEO of the company, you would
place BP and the CEO Tony Hayward and later replaced by Robert Dudley in the center (or focal)
stakeholder box, then continue identifying the other group involved such as Halliburton, Transocean,
employees who were victims and those immediately endangered by the spill, shareholders (members of
the lawsuit), affected community victims (families), affected community businesses, the U.S. government
(the Department of Justice and the Interior), the U.S. Congress, President Obama, suppliers and
distributors, competitors, among others. In completing a stakeholders map, include real groups,
individuals, and organizations.
Step 2 : Mapping stakeholder coalitions
After identify and make a map of stakeholders who are involved with firm in the incident were
addressing, the next step is to determine and map any coalitions that have formed. Coalition among
stakeholders form around stakes that they have or seek to have in common. Interest groups and lobbyists
sometimes join forces against a common enemy. Competitors also may join forces if they see an
advantage in numbers. Mapping actual and potential coalitions around issues can help you, as the CEO ,
anticipate and design strategic response toward these groups before or after they form.
Step 3 : Assessing the nature of each stakeholders interest
Next is need to identify the nature of each stakeholders interest and responsibilities in a
particular situation. Since each stakeholder has a stake, interest or claim in the process and outcomes of
the situation, opportunity, controversy, or crisis, it is important to assess the nature of the focal
organizations responsibilities toward each stakeholder group. Based on Archie Carrolls work on the
Pyramid of Corporate Social Responsibility and the Moral Management of Organizational Stakeholders,
illustrates, addressing the legal, economic, ethical and voluntary nature of a companys responsibility
toward owners, customers, employees, community groups, the public, government, and victims brings a
moral awareness to the CEO of the focal company.

For example, BPs CEO may see the firms economic responsibility to the owners (as
stakeholders) as preventing as many costly lawsuits as possible. Legally, the CEO may want to protect
the owners and the executive team from liability and damage; this would entail proactively negotiating
disputes outside the courts, if possible, in a way that is equitable to all. Ethically, the CEO may keep the
companys stockholders and owners up to date regarding his or her ethical thinking and strategies to show
responsibility toward all stakeholders. At stake is the firms reputation as well as its profitability. In that
case of BP and the other crises, the CEOs job and future career with the company can be at risk. Missteps
in communicating with the media and visible stakeholders and showing insensitivity to victims or the
situation can cause an executive to lose his/her job during a crisis, as was the case at BP.
Step 4 : Assessing the nature of each stakeholders power
This part of the analysis asks, Whats in it for each stakeholders ? Who stands to win, lose or
draw over certain stakes? Eight types of power that different stakeholders exert and which you can use in
analysis include voting power, political power, economic power, technological power, legal power,
environmental power, cultural power and power over individuals and groups (Freeman, 1984).
The BP example suggests that shareholders, members of Congress, and individual constituents
have voting power over BPs policies and officers jobs and responsibilities. The president of the United
States, government regulatory agencies, consumers, stock market analysts, and investors all exert
economic power over BP in this situation. The U.S. government, regulatory agencies, and interest groups
also exert political power over BPs operating and manufacturing policies, processes and products.
Step 5 : Constructing a matrix of stakeholder moral responsibilities
For purposes of completing this matrix, ethical decision making of company representatives can
refer to the following ethical principles: utilitarianism (weighing costs and benefits); universalism (show
respect and concern for human beings); right (recognizing individual liberties and privileges under laws
and constitutions); justice (observing the distribution of burdens and benefits of all concerned).
Voluntarily, the CEO may advise shareholders to show responsibility by publicly announcing their plans
for resolving the issues of the firms next steps. This can also be done in more open and conscientious
marketing activities as well as in a consciously responsible distribution of products.

Step 6 : Developing specific strategies and tactics

First, consider whether to approach each stakeholder directly or indirectly. Second, decide
whether to do nothing, monitor, or take an offensive or defensive position with certain stakeholders.
Third, determine whether to accommodate, negotiate, manipulate, resist, avoid, or wait and see with
specific stakeholders. Finally, decide what combination of strategies you want to employ.
While developing specific strategies, it is important to keep the following points in mind if you
are the focal stakeholder; your goal is to create a win-win set of outcomes, if possible; keep your mission

and responsibilities in mind as you move forward; consider what the probably consequences of your
actions will be; keep in mind that the means you use are important as the ends you seek.
Using the BP oil spill case as an example, it is important to insert specific names of groups and
individuals when doing an actual analysis. Indicate other stakeholders who might be or were influenced
by BPs decision to outsource and recall products. Using your third-party objective observer
perspective, can determine the movement among stakeholder positions using the arrows. From the point
of view of the focal stakeholder, if you were CEO, you would develop specific strategies. From this now
can be articulated and assigned to corporate staff for review and implementation.
Step 7 : Monitoring shifting coalition
Because time and events can change the stakes and stakeholders, it is important to monitor the
evolution of the issues and actions of the stakeholders. According a universalistic ethic in the BP case,
you might attempt to address concern and apologies to those who were harmed and condolences to the
families of those who died in the explosion and aftermath of the disaster. Ethic is should be an integral
part of every corporations and organizations goals, objectives, strategies and actions that affect other
peoples.

2.

Explain the diagnostic typology of organizational stakeholders

Generally, officers of a firm in controversial situations, or situations that offer significant

opportunities for an organization, try to influence and move stakeholder toward type 1, the Supportive
stakeholder with a low potential for threat and high potential for cooperation. Here the strategy of the
focal company is to involve the supportive stakeholder. Think of both internal and external stakeholders
who might be supportive and who should be involved in the focal organizations strategy.
In contrast, type 3, the Nonsupportive stakeholders, who shows a high potential for threat and low
potential for cooperation, represent an undesirable stance the perspective of the influencer. The suggested
strategy in this situation calls for the focal organization to defend its interests and reduce dependence on
that stakeholder.
A type 4 stakeholder is a Mixed Blessing, with a high potential for both threat and cooperation.
This stakeholder calls for a collaborative strategy. In this situation, the stakeholder could become a
Supportive or Nonsupportive type. A collaborative strategy aims to move the stakeholder to the focal
companys interests.
Finally, type 2 is the Marginal stakeholder. This stakeholder has a low potential for both threat
and cooperation. Such stakeholders may not be interested in the issues of concern. The recommended
strategy in this situation is to monitor the stakeholder, to wait and see and minimize expenditure of
resources, until the stakeholder moves to a Mixed Blessing, Supportive or Nonsupportive position.

3.

Discuss the 7-phase issue development process using an example

Issues are believed and have been observed to follow a development life cycle. Views differ on
the stages, phases and time involved in such a life cycle. Thomas Marxs reasoning fits with the seven
phase evaluation of a publics felt need or outcry through that need or demands becoming a law.
1. A felt need arises (from emerging events, advocacy groups, books, movies)
2. Media coverage is developed (television segments, such as on 60 Minutes 20/20, Fox News,
CNN, and breaking news on the Internet from the Wall Street Journal, New York Times and
other news and blogging sources).
3. Interest group development gains momentum and grows.
4. Policies are adopted by leading political jurisdictions (cities, states, countries).
5. The federal government gives attention to the issues (hearing and studies).
6. Issues and policies evolve into legislation and regulation.
7. Issues and policies enter litigations.
BPs CEO and top-level team could have used this framework to anticipate and perhaps
prevent the explosion; and if not prevent the explosion, they could have responded to the public
in a more timely and concerned way. With the internet, it is no longer takes seven years for this
model to move from phase one to the last (litigation) phase. Once local and federal legislators
learn about a volatile news breaking public issues, especially if the media has exposed it,
company representatives may respond sooner.
While the accident could have been prevented, BP might have avoided its intense and
deserved public flogging if only it had respected the best practices for managing a crisis. Bryant
and Hunter go on to explore who is to blame for the spill.

4.

Describe the 4-stage issue life cycle approach

Marx illustrated his model with the origins of the automobile safety belt issue. The four stages of
this case, according to Marx, were reflected by the following events:
1. Social awareness: Ralph Naders now-classic book, Unsafe at Any Speed, published in 1965,
created a social expectation regarding the safe manufacturing of automobiles. The Chevrolet
Corvair, later pulled off the market, was the focus of Naders astute legal and public advocacy
work in exposing manufacturing defects.
2. Political awareness: The National Traffic and Motor Vehicles Safety Act and the resulting
safety hearings in 1966 moved this expectation into the political arena.
3. Legislative engagement: In 1966, the Motor Vehicle Safety Act was passed, and four states
began requiring the use of seat belts in 1984.
4. Litigation: Social control was established in 1967, when all cars were required to have seat
belts. Driver fines and penalties, recalls of products, and litigation concerning defective
equipment further reinforced the control stage.

5.

Identify and explain the 4-stage approach to crisis management

The prodromal stage is the warning stage. If this stage is not recognized or does not actually
occur, the second stage (acute crisis) can crush in, requiring damage control. Clues in the prodromal stage
must be carefully observed. For example, Mattel experienced several recalls with its Chinese
subcontractors. The first recall sent a warning sign that issues existed. Mattel representatives at first let
the subcontractor take the blame.
The second stage, acute crisis damage has been done. The point here is to control as much of the
damages as possible. This is often the shortest of the stages. In some crises, like the Challenger space
launch, the acute crisis stage involved the explosion of the craft and deaths of the crew. In 2005, a toddler
died from ingesting a magnet from a Mattel toy that was manufactured in China. While there were no
laws governing this type of incident and Mattel had not considered the risk of a child ingesting a magnet,
a childs death signaled a crisis.
The third stage, chronic crisis, is the clean-up phase. This is a period of recovery, self-analysis,
self-doubt and healing. Congressional investigations, audit and interviews occur during this stage, which
can linger indefinitely, according to Fink. A survey of Fortune 500 CEOs reported that companies that did
not have a crisis management plan stayed in this stage two and a half times longer than those who had
plans. Did Mattels leaders actions during its chronic stages of recalls-first with the death of a child and
the magnet recall, then with the lead paint recall-demonstrate a strong ethical concern for its stakeholders
and the public?
The final stage, crisis resolution, is the crisis management goal. The key question here is: What
can and should an organizations leaders do to speed up this phase and resolve a crisis once and for all? Is
Mattel acting more ethically responsible after its recall to date?