Definitions and Classification

Question 1

Define a stakeholder in relation to Bonnafous-Boucher and Rendtorff (2016)

Answer 1

Bonnafous-Boucher and Rendtorff (2016)

All groups in which the organisation is dependent on for survival

Question 2

Define a stakeholder in relation to Freeman (1984)

Answer 2

Freeman (1984)

Individuals / group of individuals which can affect or be affected by the achievement or the organisations objectives

Question 3

What is stakeholder theory? (Phillips et al. 2003)

Answer 3

• Corporate theory strategy
• Taken up by researches in the fields of business ethics, organisation theory, political + moral philosophy, political sociology, political science

Question 4

What is stakeholder theory? (Friedman 1970)

Answer 4

• Social responsibility of business is to increase profits

- Shareholder value (short-term) can thus be contrasted to shareholder value (medium - long term)

Question 5

What is stakeholder theory? (Strategic Management)

Answer 5

• Strategic management of stakeholders is primarily based on a capacity to understand expectations
• Acknowledge their contributions to value creation
• Internal = investors, ensemble of collaboration
• External = customers, suppliers, civil society, public authorities

Question 6

How are stakeholder relations managed?

Answer 6

• Specific business strategy informed through the business purpose / who they are creating value for
• Enterprise (business) strategy:
• 1st strategy = prioritise employee, customer, shareholder value
  2nd strategy = ALL internal public’s; customers, employees, suppliers, communities, shareholders

Question 7

How are stakeholders differentiated?

Answer 7

Ask managers + stakeholders who is the most important?
Who can be affected or be affected?
Who can intervene with your objectives?
Differentiation is dependent on VALUE CREATION
Using this framework identifies the organisations primary and secondary stakeholders

Question 8

Using the hierarchy + typology of Mitchell, Agle and Wood (1997), how are stakeholders classified?

Answer 8

Definitive stakeholder = possess power, urgency, legitimacy
Dangerous stakeholder = possess power + urgency
Dependent stakeholder= Urgency + Legitimacy
Termined Dominant = possess Power + Legitimacy

Dormant stakeholder (power), discretionary (legitimacy), Demanding (urgency)

Question 9

What is a definitive stakeholder?

Answer 9

possess power, urgency, legitimacy

Question 10

What is a dependent stakeholder?

Answer 10

Possess Urgency + Legitimacy

Question 11

What is a termined dominant stakeholder?

Answer 11

possess Power + Legitimacy

Question 12

what is a primary stakeholder? (Henriques + Sadorsky 1999)

Answer 12

Active role in the survival, profitability and growth of the organisation. E.G employees, shareholders, suppliers, customers

Question 13

What is a secondary stakeholder? (Henriques + Sadorsky 1999)

Answer 13

Not essential to the survival of the organisation but can affect the organisation. E.G Competitors, media, interest groups, non-governmental groups

Question 14

What are the advantages of stakeholder theory?

Answer 14

1. Combines strategy and ethics, attempts to analyse the purpose of economic action
2. Represents management + governance in terms of negotiation and deliberation about creation value
3. Focuses on economic activity and strategy in relation to business environment

Question 15

What are the two main arguments on strategic management?

Answer 15

Advocates of the theory = Strategic managerial approach allows planning, system theory, CSR, organisational theory

Critics of the theory = argue stakeholder theory is too idealised and functions only as an operational model for corporations

Question 16

What is strategic management?

Answer 16

Strategic management is the process of making choices and being aware of the interactions between corporations, environmental and existing / potential resources

Question 17

In terms of stakeholder theory, in what does it function?

Answer 17

Functions on two levels
Corporate strategy and business strategy
Shift away from shareholder value (profits) to stakeholder value