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dian Business and Society:

Ethics & Responsibilities


Chapter
Four
Understanding Stakeholder
Relations

Copyright 2008 McGraw-Hill Ryerson Ltd.

Chapter Outline
Basic Stakeholder Analysis
Stakeholder Management Capability
Stakeholder Matrix Mapping
Diagnostic Typology of Organizational
Stakeholders
Stakeholder Identification and Salience
Examples of Stakeholder Types
Stakeholder Influence Strategies
Stakeholder Collaboration
Stakeholders and Social Capital
Chapter 4

Copyright 2008 McGraw-Hill Ryerson Ltd.

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?
Chapter 4

Copyright 2008 McGraw-Hill Ryerson Ltd.

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.
Chapter 4

Copyright 2008 McGraw-Hill Ryerson Ltd.

Stakeholder Matrix Mapping


A technique of categorizing an
organizations stakeholders by their
influence according to two variables;
usually involves plotting them on a two-bytwo matrix:
Y Axis: Oppose or support corporation
X Axis: Importance of stakeholders

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Copyright 2008 McGraw-Hill Ryerson Ltd.

The Position / Importance Matrix

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Copyright 2008 McGraw-Hill Ryerson Ltd.

Diagnostic Typology of Organizational


Stakeholders

Source: Savage et al., 1991


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Copyright 2008 McGraw-Hill Ryerson Ltd.

Stakeholder Identification and Salience


Power
ability 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

Urgency
degree to which stakeholders claim or relationship calls
for immediate attention (time sensitive and important)
Source: Mitchell et al., 1997
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Copyright 2008 McGraw-Hill Ryerson Ltd.

Stakeholder Typology

Chapter 4

Copyright 2008 McGraw-Hill Ryerson Ltd.

Examples of Stakeholder Types


Latent stakeholders
Managers may not recognize their existence

Expectant stakeholders
Require more attention from managers

Definitive stakeholders
Management must address the claims of these
stakeholders immediately

Non-stakeholders
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Source: Mitchell et al., 1997

Copyright 2008 McGraw-Hill Ryerson Ltd.

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Stakeholder Influence Strategies


Withholding strategies
stakeholder discontinues providing a resource

Usage strategies
stakeholder continues to supply resource but specifies
how it is to be used

Influence pathway
when withholding and usage strategies are used by an
ally of the stakeholder
Source: Frooman, 1999

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Copyright 2008 McGraw-Hill Ryerson Ltd.

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Typology of Influence Strategies

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Stakeholder Collaboration
Creating a foundation
Organizational alignment
Strategy development
Trust building
Evaluation
Repeat the process
Source: Svendsen, 1999
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Copyright 2008 McGraw-Hill Ryerson Ltd.

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Stakeholders and Social Capital


Definition: Any aspect of a corporations
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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Copyright 2008 McGraw-Hill Ryerson Ltd.

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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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Copyright 2008 McGraw-Hill Ryerson Ltd.

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Leads to 3 benefits
Willingness to share information
Willingness to exert ones influence or
power to benefit the other
Group cohesiveness

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Copyright 2008 McGraw-Hill Ryerson Ltd.

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