Course : Strategic Issues Management (1503SIM05)

elearning.lspr.edu
Master of Arts in Communication : Corporate Communication Studies

LSPR eLearning Program

Session Topic : Stakeholder Relations

Management
Course: Strategic Issues Management
By Rudi Sukandar, Ph.D

Content

Part 1

Stakeholder

Part 2

Stakeholder Planning

Part 3

Stakeholder Attributes & Classes

Powered by HarukaEdu.com

- 1503SIM05-

Hal 3

Part1: Stakeholder

Stakeholder: Relations Management

Stakeholder relations management

Stakeholder opinions and intensity
Issue alert and response process
Main corporate stakeholder groups and their
significance
Reputation and image
Stakeholder planning
Assessing stakeholder importance and influence

Powered by HarukaEdu.com

- 1503SIM05-

Hal 5

Stakeholder: Crucial

Crucial to be aware of stakeholder views

Stakeholders opinions are vital to the success of the organisation

(Dutton & Ashford, 1993, p. 397 cited in Heath & Palanchar, 2009, p. 91).

Powered by HarukaEdu.com

- 1503SIM05-

Hal 6

Stakeholder: Dutton, Ashford, Heath & Palenchar

Robert L. Heath
Emeritus
Professor,
Communication,
Houston Univ.
Published many
award-winning
books

Michael J.
Palenchar, Ph.D.
Doctor of
Philosophy, Mass
Communication
Univ. of
Florida (2005)
Powered by HarukaEdu.com

Jane E. Dutton
Robert L. Kahn
Distinguished Univ.
Professor of
Business
Administration &
Psychology, Univ. of
Michigan

Susan J. Ashford
Professor, Mgt &
Orgs
Associate Dean,
Leadership
Development
Programming (2007
2010)
Univ. of Michigan
- 1503SIM05-

Hal 7

Stakeholder: Stakeholders & Their intensity Vary Over Time

LIFE CYCLE OF A STRATEGIC ISSUE

Public Attention - - Pressure to act

Societal
Expectations

Origin/
Potential

Political
Developments

Emerging/
Amplification

Legislative
Actions

Current/
organization

Regulation/
Litigation

Resolution/
Dormant

Affectability/
Issue Gap
Issue
Management
Curve

Time - - Options narrow. Liabilities Increase

Source: Tony Jaques
Powered by HarukaEdu.com

- 1503SIM05-

Hal 8

Stakeholder: Main Corporate

Main corporate stakeholder groups

1. Employees
2. Customers
3. Government
elected and appointed at national, provincial, regency and city level...
...plus regulatory officials
4. Suppliers
5. Communities
Discussed in terms of corporate social responsibility (CSR) or corporate community
relations (CCR).
Can also include Activist groups
6. Investors,
7. Shareholders,
8. Financial analysts,
9. Advisers,
10. Brokers
Powered by HarukaEdu.com

- 1503SIM05-

Hal 9

Stakeholder: View of The Firm

No

Stakeholder Category

Specific Stakeholders

1.

Government
Political environment

Federal, State And Local

2.

Community
Political environment

General Public, Environmental

Groups, Civic Groups

3.

Consumers
Economic environment

Average Consumers, Product

Liabilities, Social Activists

4.

Employees
Social environment

Minorities, Women
Older Employees, Unions, Activists

5.

Owners
Technological environment

Private Citizens, Institutional Groups,

Board Members

(Notice the above PEST environments are suitable for situation analysis)
(Carroll & Buchholtz, 2012, p. 68)
Powered by HarukaEdu.com

- 1503SIM05-

Hal 10

Stakeholder: Contributions to Org Wealth

No

Stakeholders

Contributions

Employees

Development of specific human capital

Collaborative relations in the workplace
Team production, routines based on understanding, trust

2.

Customers/users

Brand loyalty and reputation

Repeated/related purchases
Collaborative design, development and problem solving

3.

Governments

Macroeconomic and social policies

Supportive relationships with policymakers

4.

Communities

License to operate
Mutual support and accommodation (flexibility)
Planning, municipal services

5.

Regulatory
Authorities

Validation of products/services and quality levels

6.

Investors:
Shareholders/Lenders

Provision of capital, equity and/or debt

Financial market recognition and status (reduced borrowing
costs and risks) (Post, Preston & Sachs, 2002, p. 47)

1.

Powered by HarukaEdu.com

- 1503SIM05-

Hal 11

Stakeholder: Carroll, Buchholtz, Preston & Sachs

Powered by HarukaEdu.com

Dr. Archie B. Carroll

Professor, Mgt
Emeritus, Univ. of
Georgia
Director, Nonprofit
Program (2000 2012)

Lee E. Preston
Business Professor
& administrator.
Univ. of Maryland
Developed
specialty in
Corporate
Governance

Dr. Ann K. Buchholtz

Professor,
Leadership and
Ethics
Research Director,
Inst. for Ethical
Leadership.
Rutgers Business
School, Rutgers
Univ.

Sybille Sachs
Professor, Business
Administration.
Univ. of Zurich
Head, Inst. for
Strategic Mgt

- 1503SIM05-

Hal 12

Stakeholder: Issue Alert & Response Process

Scanning

Identifying issue
and key
stakeholders

Trend monitoring

Analysing/
understanding

Business planning
Refining corporate
responsibility
Public policy
planning
Issue communication
planning

Priority setting
Opportunities
threats

Powered by HarukaEdu.com

Heath & Palenchar, 2009, p. 98

- 1503SIM05-

Hal 13

Stakeholder: Reputation & Image

Image
Can be bought and is short term.
It is largely what an organisation says about itself.
Reputation
Defn: Earned and built over a longer period.
It is largely what others, i.e. stakeholders, say about an organisation.
Corporate reputation
Defn: The overall estimation in which an organisation is held by its
internal and external stakeholders based on,
the organisations past actions and
probability of future behaviour
(Fombrun, 1995, p. 37).
Powered by HarukaEdu.com

- 1503SIM05-

Hal 14

Stakeholder: Reputation & Image (cont.)

Reputation is the most important asset

of most organisations.
Years of hard work in building a
good reputation can be
destroyed in a few minutes.
Astute handling of issue
management helps to safeguard
reputation.
Charles J. Fombrun
Executive Director, Reputation
Inst.
Professor Emeritus, NYUs
Stern School of Business
(1984-2004)
Powered by HarukaEdu.com

- 1503SIM05-

Hal 15

Part2: Stakeholder Planning

Stakeholder Planning: Survey

We confer with our internal stakeholder groups as part of our strategic

communication planning process
= 69% of respondents
Source: 2011 USC Annenberg study 620 senior practitioners of large US
organisations participated in University of Southern California survey:
http://ascjweb.org/gapstudy/
We are paying attention to the conversations stakeholders are having among
themselves:
Yes =
82% corporate
88% government
89% not-for-profit
Source: 2011 USC Annenberg study 620 senior practitioners of large US
organisations participated in University of Southern California survey:
http://www.scribd.com/doc/86979777/GAP-VII-Report
Powered by HarukaEdu.com

- 1503SIM05-

Hal 17

Stakeholder Planning: 5 Key Question

5 Key Questions In Stakeholder Management

1. Who are our stakeholders?
Generic categories.
Specific subcategories.
What,
2. ...are our stakeholders stakes?
In terms of Legitimacy.
Power.
Urgency
(Mitchell, Agle & Wood, 1997).
3. ...opportunities and challenges do our stakeholders present?
Potential for,
...cooperation.
...threat.
Powered by HarukaEdu.com

- 1503SIM05-

Hal 18

Stakeholder Planning: 5 Key Question

4. ...responsibilities does the firm have towards its stakeholders?

Economic.
Legal.
Ethical.
Philanthropic/discretionary.
5. ...strategies or actions should the firm take to best address stakeholder
challenges and opportunities?
Deal directly/indirectly.
Offense/defence.
Accommodate/negotiate.
Manipulate/resist.
Combination of strategies.
(Carroll & Buchholtz, 2012, p. 75)

Powered by HarukaEdu.com

- 1503SIM05-

Hal 19

Stakeholder Planning: Influence of Stakeholder Groups

1. The degree of necessity of the group to public officials

2. Lobbyist - policymaker relations
3. Whether the groups lobbying focus in defensive or
offensive
4. The extent and strength of opposition to the group
5. Perceived legitimacy of the group and its demands
6. Group financial resources
7. Political, organizational and managerial skill of group
leaders
8. Size and geographic distribution of group membership
9. Potential to partner with other groups
10.Extent of group autonomy in political strategizing
11.Political cohesiveness of the membership
12.Timing and political climate (Thomas, 2011, pp. 294-295)
Powered by HarukaEdu.com

- 1503SIM05-

Hal 20

Stakeholder Planning: Importance of Individual Stakeholders

5.
Dangerous
stakeholder

4.
Dominant
stakeholder

7.
Definitive
stakeholder
6.
Dependent
stakeholder

(Mitchell, Agle & Wood, 1997)

Powered by HarukaEdu.com

- 1503SIM05-

Hal 21

Part3: Stakeholder Attributes & Classes

Stakeholder Attributes: Power, Legitimacy & Urgency

1. Power
Based on,
...physical resources of force, violence, or restraint: Coercive
...material or financial resources: Utilitarian
...symbolic resources, e.g. social power: Normative
2. Legitimacy:
Socially accepted and
Expected structures or behaviors

Powered by HarukaEdu.com

- 1503SIM05-

Hal 23

Stakeholder Attributes: Power, Legitimacy & Urgency (cont.)

3. Urgency
Calling for immediate attention or pressing
Time sensitivity
The degree to which managerial delay in attending to the
claim or
...relationship is unacceptable to the stakeholder
Criticality
The importance of the claim or
The relationship to the stakeholder.
Michell, Agle, & Wood, 1997

Powered by HarukaEdu.com

- 1503SIM05-

Hal 24

Stakeholder Classes: Latent, Expectant & Definitive

1. Latent
Dormant stakeholders
Discretionary
stakeholders
Demanding stakeholders
2. Expectant
Dominant stakeholders
Dependent stakeholders
Dangerous stakeholders

Ronald K. Mitchell
Professor, Entrepreneurship
(1994)
Chair, Entrepreneurship Div.
(2008-2009)
Bradley R. Agle
George W. Romney Endowed
Professor
Professor, Ethics & Leadership,
Marriott School of Mgt, Brigham
Young Univ. (BYU)

Donna J. Wood
David W. Wilson Chair in
Business Ethics, Univ. of
Northern Iowa
Professor, Sociology (1979)

3. Definitive
Definitive stakeholders
Michell, Agle, & Wood, 1997
Powered by HarukaEdu.com

- 1503SIM05-

Hal 25

References

1. Carroll, A., & Buchholtz, A. (2012). Business & Society: ethics, sustainability
and stakeholder management (8th ed.). Mason, Ohio: South-Western
Cengage Learning.
2. Fombrun, C (1995), Reputation: realizing value from the corporate image,
Boston, Massachusetts: Harvard Business School Press.
3. Heath, R., & Palenchar, M. (2009). Strategic Issues Management:
organizations and public policy challenges (2nd ed.). Thousand Oaks, CA:
SAGE Publications.
4. Mitchell, R., Agle, B., & Wood, D. (1997). Toward a Theory of Stakeholder
Identification and Salience: Defining the Principle of Who and What Really
Counts. The Academy of Management Review, 22(4), pp. 853-886.
5. Post, J., Preston, L., & Sachs, S. (2002). Redefining the Corporation:
stakeholder management and organizational wealth. Stanford, California:
Stanford University Press.
6. Thomas, C. (2011). Lobbying in the United States: an overview for students,
scholars and practitioners. In P. Harris & C. Fleisher (Eds.). The Handbook of
Public Affairs (pp. 281-319). London: SAGE Publications.)
Powered by HarukaEdu.com

- 1503SIM05-

Hal 26

Course : Strategic Issues Management (1503SIM05)

elearning.lspr.edu
Associate Partners :

Powered
by HarukaEdu.com
Powered
by HarukaEdu.com

- 1503SIM05-

Hal 27