Chapter 3: Responsible management

Question 1

What is responsible management?

Answer 1

voluntarily assumes professional accountability for harmonizing stakeholder value in response to social, economic and environmental issues.

Question 2

Name three common elements of responsible management?

Answer 2

1. Shareholder thinking
2. Social, environmental and economic dimensions
3. Voluntary character of assuming responsibility.

Question 3

What is a management’s social performance?

Answer 3

umbrella term for assessment methods for the degree of responsibility assumed through a management practice.

Question 4

Name four elements of a qualitative social performance assessment

Answer 4

1. Responsibility categories
2. Social responsiveness frameworks, assessing how management reacts to shareholder claims
3. Issues maturity, explaining how advanced management is in issues it covers
4. Implementation stages, which show the degree to which stakeholder responsibilities are embedded in management processes.

Question 5

Name the four responsibility categories?

Answer 5

Economic
Legal
Ethical
Discreationary

Question 6

What is a responsibility category?

Answer 6

describes the type of responsibility assumed by management and is based on Carroll’s four categories of economic, legal, ethical and discretionary responsibilities. Economic stage is most important, discretionary the least.

Question 6

Name four types of stakeholder responsiveness

Answer 6

1. Reactive: management tries to deny validity of stakeholder claims
2. Defensive: management accepts responsibilities but tries to avoid them
3. Accommodative: management accepts stakeholder claims and acts upon resulting responsibilities
4. Proactive: anticipating stakeholder claims and act before they have been publicized.

Question 6

Name four issues of maturity?

Answer 6

1. Engagement with completely institutionalized issues
2. Consolidated: management tackles issues that are not yet institutionalized but are a well-accepted management practice.
3. Emerging: addressing issues for which there is only very basic awareness
4. Latent issues: addressing issues that have yet to reach public awareness.

Question 7

What are the four implementation stages?

Answer 7

1. Rudimentary/Isolated: management applies isolated policies that are weakly integrated.
2. Managerial: consider stakeholder responsibilities in core processes and practices.
3. Strategic: additionally considers stakeholder responsibilities an integral element of strategic planning.
4. Civic: management acts as change agent for responsibility management practices externally after achieving strategic implementation.

Question 8

What is the ethical category of responsibility?

Answer 8

Ethical category are things that are required by moral standards by not formalized through laws.

Question 9

What is a discretionary category of responsibility?

Answer 9

Discretionary category includes items that are nice to do but not morally enforceable.

Question 10

What is stakeholder responsiveness?

Answer 10

describes the manner in which management answers to stakeholder claims.

Question 11

What are issues maturity?

Answer 11

describes degree of acceptance of an issue divided into institutionalized, consolidated, emerging and latent issues.

Question 12

What is stakeholder management?

Answer 12

process of managing relationships with the various groups, individuals and entities that affect or are affected by an activity.

Question 12

What are implementation stages?

Answer 12

stages describing the degree of integration of responsible management into practices, processes and structures

Question 13

What is stakeholder value?

Answer 13

degree of satisfaction of either single stakeholders or all stakeholder of a specific activity. Stakeholder value becomes easier to define once the particular relationship with each stakeholder is understood.

Question 14

What are the three guiding principles of defining stakeholder value?

Answer 14

1. Harmonization of stakeholder value in short, medium and long term
2. Consider the entire complex mesh of stakeholder relations throughout management’s sphere of influence
3. Understand that connectedness and synergies among stakeholders require a holistic understanding of stakeholder relationships.

Question 15

What are the two guiding principles for responsible decision making in management?

Answer 15

1. Maximization of stakeholder value maxim: choose option with highest total stakeholder value
2. Fairness in distribution: in case of two equal options; choose the one with most balanced trade-off between eternal and internal stakeholder value.

Question 16

What is stakeholder governance?

Answer 16

focus corporate governance mechanisms on of stakeholder-value as main governance criterion.

Question 17

What is a stakeholder assessment?

Answer 17

process of understanding stakeholders and their relationship to as specific activity. Can be subdivided into the process of stakeholder identification and prioritization

Question 18

Name the four criteria on which stakeholders are assessed?

Answer 18

1. Dependency
2. Responsibility
3. Tension
4. Influence

Question 19

What is dependency in stakeholder assessment?

Answer 19

direct or indirect dependency on management’s activities, products or services.

Question 20

What is responsibility in stakeholder assessment?

Answer 20

groups or individuals to whom management has or will have responsibilities to

Question 21

What is tension in stakeholder assessment?

Answer 21

groups or individuals who need immediate attention from management regarding issues

Question 22

What is influence in stakeholder assessment?

Answer 22

groups and individuals who can have an impact on management’s stakeholder’s strategic or operational decision-making.

Question 23

What is the difference between primary and secondary stakeholders?

Answer 23

Primary stakeholders have direct connection with company, secondary stakeholders not but are connected indirectly through primary stakeholders.

Question 24

What are social stakeholders?

Answer 24

Social stakeholders are individuals or groups of human beings currently alive, as opposed to nonsocial stakeholders such as animals or future generations.

Question 25

What are the three steps to creating a stakeholder map?

Answer 25

1. Identify focal entity providing perspective from which the stakeholder analysis is conducted. 2. List all relevant stakeholders, independently from the type or strength of relationship to focal entity 3. Group stakeholders int categories mentioned before and organize map based on those.

Question 26

What are the three most common types of approaches to stakeholder mapping?

Answer 26

1. PUL- Venn Diagram 2. Collaboration-harm grid 3. Core-strategic-environmental framework

Question 27

What is the PUL - Venn Diagram?

Answer 27

assesses stakeholders based on power (influence), urgency (tension) and legitimacy (how rightful is stakeholder’s claim.

Question 28

What is the Core-strategic-environmental framework?

Answer 28

This model assesses stakeholders on whether it has a stake in the core, the strategic, or the environmental parts of the company

Question 28

What is a collaboration-harm grid?

Answer 28

asseses stakeholders based on potential for cooperation and threat. Four outcomes: - Non-supportive: low coop, high threat  defend - Mixed blessing: high coop, high threat  collaborate - Marginal: low coop, low threat  monitor - Supportive: high coop, low threat  involve

Question 29

What is stakeholder engagement?

Answer 29

consists of practices of interaction with stakeholder and can be subdivided into stakeholder communication and the co-creation of joint activities.

Question 30

What are the principles of responsible management?

Answer 30

1. Responsible management assumes accountability for stakeholder-related issues 2. Stakeholder management consists of administration practice centred on stakeholders and harmonizing stakeholder value 3. Stakeholder value is created in many differet ways; aspiration is to create shared value between internal and external stakeholders. 4. Management social performance is a framework aimed at defining degree of responsibility achieved by management. 5. Process of stakeholder management consists of stakeholder assessment and stakeholder engagement 6. Stakeholder assessment involves practices of stakeholder identification and stakeholder prioritization. 7. Stakeholder engagement consists of practices of stakeholder communication and the co-creation of activities fostering collaboration with stakeholders.