Stakeholder Analysis Flashcards
what is the difference between the stakeholder and the market capitalism model?
relationship between the entities in the model (ethics - what they see as right)
why is the stakeholder model better in practice than the market capitalism model? who said that?
- it pays off (higher profits)
- it is the right thing to do (ethically)
Freeman
define corporate governance
structures and systems of control by which managers are held accountable to stakeholders
define the models of governance for stakeholder model and for market capitalism model.
what are their main goals?
MC: shareholder model. profit first
stakeholder model: stakeholder model. ‘win-win’ situations
state 7 characteristics of the shareholder (MC) governance model.
- unabmiguous focus
- increased enterpreneurship
- easier decision-making
- principal-agent problem (aligining interests)
- short-terminisim
- vulnerable minority shareholders
- threatened legitimacy (the society’s perception of company’s legitimacy is hard to get/keep with this model)
state 7 characteristics of the stakeholder governance model
- long-term orientation
- less reckless risk-taking (careful decisions)
- reduced entrepreneurship
- inclusive management
- difficult decision-making (many stakeholders + interests + issues + goals)
- uneconomic investments
- gained legitimacy (easier)
state 4 types of corporate governance stances
- laissez-faire
- enlightened self-interest
- forum for stakeholder interaction
- shaper of society
state the following characteristics for the governance stance laissez-faire:
- key idea
- type of leadership
- level of management importance
- type of external interaction
- stakeholder relationship
- legal compliance (make profit, pay taxes)
- peripheral leadership
- responsibility on middle-management
- defensive to outside pressures
- unilateral relationship (only one group / stakeholder taken into consideration)
state the following characteristics for the governance stance enlightened self-interest:
- key idea
- type of leadership
- level of management importance
- type of external interaction
- stakeholder relationship
- sound business sense
- supportive leadership
- management sets up systems to ensure good practice
- reactive to outside pressures
- interactive relationship (to prevent conflicts)
state the following characteristics for the governance stance forum for stakeholder interaction:
- key idea
- type of leadership
- level of management importance
- type of external interaction
- stakeholder relationship
- triple bottom line = sustainable business
- champion-style leadership
- management board-level issue (organisation-wide monitoring)
- proactive interactions
- partnership with stakeholders
state the following characteristics for the governance stance shaper of society:
- key idea
- type of leadership
- level of management importance
- type of external interaction
- stakeholder relationship
- key is social and market change
- visionary leadership
- responsibility is on each individual throughout the organisation
- defining external interactions
- multi-organisation alliances with stakeholders
how did Freeman & Olson define business (throught the stakeholder model)? (exam Q)
business is a set of relationship amongst the groups that have a stake in that business.
it’s about how those groups interacte and create value.
to understand a business is to know how these relationships work.
def stakeholders
any group or individual who can affect or is affected by the achievement of an organisation’s purpose (potential beneficiaries or risk bearers)
state 6 examples of stakeholders
- employees
- government
- suppliers
- community (public)
- customers
- investors
what does stakeholder management do? (3)
- identifies stakeholders
- analyses their interests
- plans and implements actions to engage w them
why is stakeholder management useful? (5)
- enchances ability to predict the environment
- less incidents when stakeholders damage the company (e.g. strikes, bad press, boycotts)
- less conflicts and legal suits
- higher level of trust
- increased organisational flexibility (fast response to crisis)
state the 6 steps of stakeholder analysis
- identify SH (primary/secondary, internal/external)
- investigate their interests / concerns
- evaluate relationship with organisation (mover=for sth / floater = indecisive / blocker = against sth)
- identify possible coalitions with others
- asses power and interest
- plan actions to manage them
what are the 5 sources of internal stakeholders’ power?
- hierarchy (formal) or influence (informal)
- control of strategic resources
- possession of knowledge / skills
- control of human environment
- involvement in strategy implementation
what are the 4 indicators of internal stakeholders’ power?
- status (rank)
- claim on resources (budget size)
- representation
- symbols (titles)
what are te 4 sources of external stakeholders’ power?
- control of strategic resources
- involvement in strategy implementation
- possession of knowledge / skills
- access to internal links
what are the 4 indicators of external stakeholders’ power?
- status
- resource dependence
- negotiating agreements
- symbols
what are the 3 facilitators of stakeholder attention?
- criticality of issue (if it is critical for the stakeholder)
- good channels of information
- high cognitive capacity of stakeholder
what should a company do with each of these stakeholders? (power/interest grid)
- low power, low interest
- low power, medium - high interest
- medium power, low - high interest
- high power, low interest
- high power, medium interest
- high power, high interest
- ignore
- keep informed
- keep onside
- watch
- keep satisfied
- manage actively
what are the three levels of stakeholder engagement?
- informing & explaining (one way communication - news, publications, reports)
- communicating & consulting (two way communciation, but only with purpose of gather info - conferences, social media, mass emails, surveys)
- involving, collaborating, partnerships, joint ventures (two way communiction - stakeholders’ involvement in decision-making)
