Week 10 - Strategy: Stakeholders, Governance and Responsibility

Question 1

Stakeholders and strategy

Answer 1

• Stakeholders are relevant to strategy as strategies and strategic decisions are influenced by the expectations of stakeholders.
  
- Stakeholders are best defined as the “individuals or groups that depend on organisations to fulfil their own goals and on whom organisations depend”.

• “Stakeholders are individuals and entities that can be influenced by, or can impact on, a firm”
• Hill and Hones (1992)

Question 2

Stakeholder mapping

Answer 2

• Stakeholder mapping is a means to understand the influence of different stakeholders/groups in strategy (and different strategic projects).
  
- Two key dimensions in stakeholder mapping to consider – extant power and perceived attention.

Question 3

Stakeholder mapping

Answer 3

• High power, high attention: The most important stakeholders who need to be prioritised– keep them happy!
  
- High power, low attention: Have some influence and organisations should work to keep these stakeholders satisfied but lack significant attention. 

• Low power, high attention: Although the power of these stakeholders is low, they have high attention and this could be useful/important to monitor.

• Low power, low attention: Stakeholders who need to be monitored and kept updated, but have little power/attention.

Question 4

Stakeholder mapping - core groups

Answer 4

• Players: Owners, leaders, top managers, shareholders, clients. 
- Subjects: Non-execs, advisors, the media, government. 

• Context-setters: Middle-managers, suppliers, consultants, customers. 

• Crowd: Customers, local media, councils/local government.

Question 5

Stakeholder mapping - four steps

Answer 5

• Step 1: Identify key stakeholders. 

• Step 2: Group and prioritise.
  
- Step 3: Buy-in, communicating/collaborating.
  
- Step 4: Review and manage over-time (repeat?)

Question 6

Stakeholders and governance

Answer 6

• Governance concerns the structures and systems of control by which managers are held accountable to those who have a legitimate stake in an organisation. 

• Governance is thus a strategic concern. 

• It is relevant to the legitimacy and responsibility actions of firms.

Question 7

CSR and strategy

Answer 7

• Corporate social responsibility is perhaps the most common term we associate with responsibility/sustainability in business. 

• Firms often incorporate CSR as part of their strategy (or less commonly have a separate CSR strategy/plan). 

• Increasingly, we see firms (forprofit/third sector) that have responsibility/sustainability at the core of their business model.

Question 8

Lyon et al (2018) - recommended reading

Answer 8

• CSR needs CPR. 

• Focus on stakeholders and responsibilities – the relationship between firms and government. 

• Firms have responsibilities to be responsible. These may be aligned to policy or be an independent strategic decision.

Question 9

Balancing profit/performance and responsibility

Answer 9

• What organisations do (or do not do!) depends on their leaders (c-suite, top managers, boards/directors).
  
- Formulating responsibility and sustainability goals (as we’re mostly discussing here).
  
- Also, for example, measuring risk assessment, fostering gender equality and inclusiveness, etc. 

• Rhetoric and different motives

Question 10

CSR and strategy example1 & 2

Answer 10

picture

Question 11

Example in disparity - FMCG (Unilever, Nestle)

Answer 11

• Strategic concerns between firms can differ hugely. 

• Some actively look to CSR as a strategic decision/commitment. 

• Others see CSR as a secondary consideration (or possibly a unwanted cost/consideration).

Question 12

Responsibilities and future of work (wetherspoon, sports direct, deliveroo)

Answer 12

• The notion of the future of work is another key (strategic) concern for organisations and their responsibility.
  
- Casual work, ’zero hours’, and the ‘gig’ economy are central to (some) modern firms. 

• Digital work represents how technology is changing the nature of work – AI, automation, algorithms?

Question 13

Organisational legitimacy

Answer 13

• Organisational legitimacy is the perception or assumption that the actions of an entity are desirable, proper or appropriate.
  
- Organisations might be in the position where they need to: - 
1) Establish legitimacy.
  
2) Defend legitimacy. 

  3) Re-establish (or build) legitimacy

Question 14

Legitimation strategies

Answer 14

• Legitimation strategies represent strategic responses of firms.
  
- They are important for how organisations can strategically manage their legitimacy over time. 

• There are three core legitimation strategies which organisations can ‘use’.
  
- Key here is the balance between organisational actions and societal expectations and how the two influence one another.

Question 15

Organisational actions vs societal expectations

Answer 15

• Organisational actions - the general (strategic) actions that organisations take to function (e.g., deliver to consumers, provide services, make profit).
  
- Societal expectations - what society comes to expect from organisations (institutions) which are the source of legitimacy judgements.

Question 16

Three legitimations strategies

Answer 16

• Three core legitimation strategies: 

  • Adaptation - adapting to meet the expectations of key stakeholders. 

  • Manipulation - attempting to control the expectations of key stakeholders. 

  • Argumentation - conversing in dialogue about expectations with key stakeholders.
  
- Combining all three is a paradox approach – able to tackle complex problems/pluralism.

Question 17

Adaptation (Nike)

Answer 17

• Societal expectations (attempt to) influence organisational actions.
  
- Particularly beneficial when corporations adjust their actions to align with the interests of their most powerful stakeholder groups.

Question 18

Manipulation (Walmart)

Answer 18

• Organisational actions (attempt to) influence societal expectations. 

• Often delivered through advertising campaigns, (mis)information, lobbying, strategic public relations, and other impression management methods.

Question 19

Argumentation (CILIP)

Answer 19

• Organisational actions and societal expectations are discussed, negotiated, refined through dialogue.
  
- Social media (other social network/communication platforms) are commonly used. 

• Idea of openness (including in strategic direction)…

Question 20

Legitimacy and critical discourse - VM

Answer 20

• Critical discourse analysis is about the (qualitative) analysis of text and spoken word.
  
- Analysis of language of different stakeholders at VW – top managers, employees, consumers, the media. 

• Language in press releases, media interviews, videos, publicly available documents.
  
- Legitimation strategies used by VW to strategically re-establish organisational legitimacy.

Question 21

Legitimation strategies over time - Puma

Answer 21

• The case of Puma – sustainable development over time and the role of legitimation strategies.
  
- Different strategic responses (legitimation strategies) used in different situations.
  
- Paradox strategy built up through experience – utilised accordingly.