6 Stakeholders

Stakeholders
stakeholder expectations and organisational

purposes
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
Objectives
Students are to be able to evaluate the power and
levels of a variety of pertinent stakeholders of
organisations.
Students are to be able to evaluate the interest levels
of a variety of pertinent stakeholders of organisations.
Students are to be able to use their evaluation of the
power and interest levels of a variety of pertinent
stakeholders of organisations, to show how strategies
can impact upon and be impacted upon by a variety
of stakeholder groups.
Students are able to show how management styles
play a role in stakeholdering.
Expectations
and purposes
Resources,
competences
and capability
The
environment
Strategic
analysis
Bases
of strategic
choice
Organisation
structure and
design
Strategic
choice
Strategic
options
Strategy
evaluation and
selection
Strategy
implementation
Managing
strategic
change
Resource
allocation and
control
Exhibit 1.4 A summary model of the elements of strategic management

Corporate governance
Whom should the
organisation serve?
How should purposes be
determined?
Business ethics
Which purposes should
be prioritised?
Why?
Organisational purposes
Mission
Objectives
Stakeholders
Whom does the
organisation serve?
Cultural context
Which purposes are
prioritised?
Why?
Exhibit 5.1 Influences on organisational purposes
STAKEHOLDERS
Those who depend on the organisation for the
realisation of some of their goals and in turn the
organisation depends on them for the full realisation
of its goals
Customers
Competitors
Government
Suppliers
The community
Employees
Lenders
CORPORATE GOVERNANCE AND

STAKEHOLDERS
Shareholders
widespread or close?
institutional intermediaries?
bankers?
cross-shareholding?
Employees
Co-determination, shareholders or employees?
Lenders
partners or contractors?
Customers
Caveat Emptor, market pressure or regulation?
(a) Within organisations

Hierarchy (formal power),
e.g. autocratic decision making

Influence (informal power),
e.g. charismatic leadership
Control of strategic resources,
e.g. strategic products
Possession of knowledge and skills,
e.g. computer specialists
Control of the environment,
e.g. negotiating skills
Involvement in strategy
implementation,
e.g. by exercising discretion
(b) For external stakeholders

Control of strategic resources
e.g. materials, labour, money

Involvement in strategy
implementation,
e.g. distribution outlets, agents
Possession of knowledge (skills),
e.g. subcontractors
Through internal links,
e.g. informal influence
Exhibit 5.6a Sources of power

(a) Within organisations

Status
Claim on resources
Representation
Symbols
(b) For external stakeholders

Status
Resource dependence
Negotiating arrangements
Symbols
Exhibit 5.6b Indicators of power

Growth vs profitability
Short term vs investment
Control vs professional managers
Ownership vs funding
Ownership vs accountability
Efficiency vs jobs
Mass appeal vs quality
Exhibit 5.3 Some common conflicts of expectations

LEVEL OF INTEREST
Low
Low
High
Minimal
effort
Keep
informed
Keep
satisfied
Key
players
POWER
High
Exhibit 5.5 Stakeholder mapping: the power/interest matrix

Source: Adapted from A. Mendelow, Proceedings of the Second International Conference on Information Systems, Cambridge, MA, 1991
STAKEHOLDER MAPPING
- SOME GUIDELINES
Positioning related to specific strategies

Stakeholders may need to be sub-divided
Distinguish the role for the individual
Identify political priorities by:
plot how stakeholders would line up

plot how stakeholders would need to line up
identify mismatches
include key maintenance activities
STAKEHOLDER MAPPING
- test questions
Power
If I were to pursue this strategy with disregard to the
views of this stakeholder could they stop me?
Interest
How high is this strategy in their priorities - are they
likely to actively support or oppose this strategy?
STAKEHOLDER
MAPPING
- typical maps
Typical Map
Battleground
Dangers
Limbo
Dream Ticket
Complacency
Lost Cause
Lose the war
Lone Champion
Dogged Opponent
Champion Lost
Opponent prevails
Political Trap
Stakeholder repositions
No levers
Drain resources
Negative lobbying
Complacency
Worthy cause
Timebomb
Autocrats Dream
Priorities
Supporter dominates
Opponents retreat
Stalemate
Keep informed
Keep Satisfied
Change orientation
Retreat
Broaden support
Change orientation
Sidepayments)
Reduce power
Find Champion
Maintain in position
Seek Champion
Keep informed
Help organise
Maintain position
Proceed
Management Styles
We need to consider how management styles
differ when dealing with each stakeholder
group
Level of interest
Low
Low
Power
Direction/edict style
Direction education style
Regular general
Regular general
communication
communication
Symbolic signalling
Symbolic signalling
Education/intervention style
Participation/intervention
Personal memoing
High
High
Face to face
style
Face to face
communication
Stakeholders and management styles

STYLE
MEANS/CONTEXT
BENEFITS
PROBLEMS
CIRCUMSTANCES OF
EFFECTIVENESS
Education and
communication
Group briefings assume

Overcoming lack of
internalisation of strategic (or mis)information
logic and trust of top
management
Time consuming
Direction or progress
may be unclear
Collaboration/
participation
Involvement in setting the

strategy agenda and/or
resolving strategic issues
by taskforces or groups
Increasing ownership
of a decision or
process May improve
quality of decisions
Time consuming
Solutions/outcome
within existing
paradigm
Intervention
Change agent retains

co-ordination/control
delegates elements of
change
Process is
guided/controlled
but involvement
takes place
Risk of perceived
manipulation
Incremental or non-crisis
transformational change
Direction
Use of authority to set

direction and means of
change
Clarity and speed
Risk of lack of
acceptance and illconceived strategy
Transformational change
Coercion/edict
Explicit use of power

through edict
May be successful in
crises or state of
confusion
Least successful
unless crisis
Crisis, rapid
or change in established
autocratic cultures
Incremental change or
long-time horizontal
Exhibit 11.6 Styles of managing strategic change

Activity
Read Johnson & Scholes (1999) section 5.3.2 of the text and illustration
5.4 for practical advice on how to undertake a stakeholder mapping.
AND
Carry out a stakeholder mapping exercise for the Granada buy out of
Forte Hotels. Support this with researched evidence (newspaper
articles, journal articles, web searches etc.) Bring it to the seminar for
discussion.
OR
Read the Sheffield Theatres Trust case study on page 670-84, Johnson
& Scholes, 1999, Exploring Corporate Strategy 5th Ed. And carry out a
stakeholder mapping exercise.
OR
Carry out a stakeholder mapping exercise for an hospitality/tourism

organisation and strategy/scenario of your choice. Support this with
researched evidence (newspaper articles, journal articles, web
searches etc.) Bring it to the seminar for discussion.
MORETON UNIVERSITY
A case study
COMPUTER SERVICES - monopolist strategy

Map A - current situation (1998)
LEVEL OF INTEREST
Low
A
Low
POWER
High
High
Students
Director A (+)
Competitor X (-)
Principal F (-)
Funding Body
Director E
Director S
Director C (-)
Vice Chancellor (0)
Chairman (-)
COMPUTER SERVICES - monopolist strategy

Map B - the preferred situation
LEVEL OF INTEREST
Low
A
Low
POWER
High
High
Students
Competitor X (-)
Principal F (0)
Funding Body
Director E
Chairman
Director A (+)
Director S (+)
Director C (-)
Vice Chancellor (+)
MORETON UNIVERSITY
- political priorities (monopolist strategy)
Dilute power of Director C
Lobby Directors E and S to increase interest
Director A now on Governing Body
Inform Chairman of difficulties elsewhere
Improve service to colleges - silence Principal F
MORETON UNIVERSITY
- assessment of power
Indicator
Status
Resources
Representa
tion
Symbols
Director A
H
L
L
Indicator
Funding
Body
H
H
Status
Resource
leverage
Negotiation
Symbols
H
H
INTERNAL
Director C
H
H
L
STAKEHOLDERS
Director S
H
M
L
H
EXTERNAL
Principal F
M
STAKEHOLDERS
Students
M
L
L
M
L
M
L
L
Chairman
H
N/a
H
H
The Political Battleground
+ + +
- - From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
The Dream Ticket
+ + +
+ + +
The Potential Lost Cause
- - - - From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
The Lone Champion
+
The Dogged Opponent
__
The Political Trap
? ? ?
? ? ?
The Worthy Cause
+ + +
+ + +
The Political Timebomb
The Autocrats Dream
? ? ?
? ? ?

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Stakeholders

stakeholder expectations and organisational

Exhibit 1.4 A summary model of the elements of strategic management

CORPORATE GOVERNANCE AND

(a) Within organisations

e.g. autocratic decision making

(b) For external stakeholders

e.g. materials, labour, money

Exhibit 5.6a Sources of power

(a) Within organisations

(b) For external stakeholders

Exhibit 5.6b Indicators of power

Exhibit 5.3 Some common conflicts of expectations

Exhibit 5.5 Stakeholder mapping: the power/interest matrix

Positioning related to specific strategies

plot how stakeholders would line up

Lose the war

Direction education style

Stakeholders and management styles

Group briefings assume

Involvement in setting the

Change agent retains

Use of authority to set

Clarity and speed

Explicit use of power

Exhibit 11.6 Styles of managing strategic change

Carry out a stakeholder mapping exercise for an hospitality/tourism

COMPUTER SERVICES - monopolist strategy

COMPUTER SERVICES - monopolist strategy

The Political Battleground

The Dream Ticket

The Potential Lost Cause

The Lone Champion

The Dogged Opponent

The Political Trap

The Worthy Cause

The Political Timebomb

The Autocrats Dream

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