Stakeholder theory

Question 1

What is a stakeholder?

Answer 1

A stakeholder in an organization is any group or individual who can affect or is affected by the achievement of the organization’s objectives.

Two-way relationship between the firm and the stakeholders

Question 2

What is stakeholder theory?

Answer 2

A theory of organizational management and ethics.

Question 3

Where can stakeholders be found?

Answer 3

Within the company, within the value chain or outside the value chain

Question 4

Give examples of corporate stakeholders

Answer 4

Top management and employees

Question 5

Give examples of stakeholders within the value chain

Answer 5

Distributors, consumers, suppliers, producers etc

Question 6

Give examples of stakeholders outside of the value chain

Answer 6

Governments, NGOs, media, activist groups, local community

Question 7

What are the stakeholder attributes that stakeholder salience positively can relate to?

Answer 7

Power
Legitimacy
Urgency
These will force managers to be present towards these stakeholders

Question 8

Explain the stakeholder attribute power

Answer 8

Power is the ability to influence a firm’s behaviour

Question 9

Explain the stakeholder attribute legitimacy

Answer 9

Legitimacy is a claim on a firm by the stakeholders for the harms and benefits generated by a firm’s actions

Question 10

Explain the stakeholder attribute urgency

Answer 10

Urgency is the degree to which a stakeholder’s claims calls for immediate attention

Question 11

What are the three types of stakeholders theories and what do they stand for?

Answer 11

1. Instrumental theory - profits are to be maximized
2. Normative stakeholder theory - managers have an obligation/right thing to do
3. Strategic stakeholder management model - reducing harm and/or enhancing benefits

Question 12

What are the reasons for adopting a stakeholder approach concerning the instrumental approach?

Answer 12

The financial performance of the firm can be enhanced, namely market-place success, profitability, stability, growth, competitiveness

Question 13

What are the reasons for adopting a stakeholder approach concerning the strategic approach?

Answer 13

Stakeholder activist can disrupt org. reputation by organize consumer boycotts, participate in protest rallies etc.
Stakeholder mismanagement: widespead, highly publicized, long lasting, and difficult to contain
Harmful: lost markets and revenues, a decline in share price, large legal fees
Beneficial: engance reputation and goodwill, increase shareholders wealth, increase trust with partners

Question 14

What are the reasons for adopting a stakeholder approach concerning the moral approach?

Answer 14

Stakeholders have instrinsic value, and therefore, ought to be treated as “ends” in themselves and not just as means to an end.
Enlightened self-interest: business and societal interests are closely intertwined
What firms ought to do or should do? What is firm’s ethical and moral standpoint? What is the “right” thing to do?

Question 15

What are the four traditions of working with stakeholders in reaserach?

Answer 15

1. Optimizing - cases like transport and logistics
2. Balancing - cases like software
3. Structuring - cases like health care, supply chains
4. Involvning - cases like information systems