Week 2

Question 1

What is a stake

Answer 1

any interest, share or claim that a group or individual has in the outcome of an organization’s policies, procedures, or actions toward others (expectations of the stakeholders)

Question 2

What is a stakeholder?

Answer 2

any group or individual who can affect or is affected by the achievement of the organization’s objectives

• external driving force for sustainability

Question 3

Milton Friedman on stakeholder theory

Answer 3

a firm should create value for all stakeholders, not just shareholders

What matters: difference between social and economic goals are no longer relevant, only the survival of the organization

Question 4

Benefits of stakeholder engagement (4)

Answer 4

• Allow companies to understand the impact they are making on society
• Driver of learning and organizational change
• Means to manage and reduce risk
• Generates trust and social capital

Question 5

Greenwood on stakeholder engagement

Answer 5

practices the organization undertakes to involve stakeholders in a positive manner in organizational activities  process of consultation, communication, dialogue and exchange

Question 6

Different models of identifying stakeholders (3)

Answer 6

Internal vs external
According to their position in the supply chain
Primary stakeholders, secondary stakeholders and interested parties

Question 7

Internal vs external Friedman model

Answer 7

Internal: owners, employees, investors, board of directors
External: suppliers, customers, governments, competitors

Question 8

According to their position in the supply chain (Searcy)

Answer 8

a. Focal Firm Stakeholders (employees)
b. Supply Chain Stakeholders (suppliers)
c. Stakeholders Beyond the Supply Chain (NGO’s)

Question 9

Primary stakeholders, secondary stakeholders and interested parties (Garvare and Johansson)

Answer 9

a. Primary stakeholders: direct control of essential means of support required by the organization
b. Secondary stakeholders: do not directly provide any essential means of support for the organization but still have influence
c. Interested parties: interest in organizational activities but no ability to take action if their needs are not met

Question 10

Stakeholder salience

Answer 10

the degree to which managers give priority to competing stakeholder claims (Mitchell).

Question 11

Different salience of stakeholders

Answer 11

Latent: one attribute, low salience
Expectant: two attributes, moderate salience
Definitive: three attributes, high salience

Question 12

Determining the stakes (attributes)

Answer 12

1. Power: the ability of those who possess power to bring about the outcomes they desire.
2. Urgency: the degree to which stakeholder claims call for immediate attention.
3. Legitimacy: a generalized perception that the actions of an entity are desirable, proper or appropriate.

Question 13

Stakeholder types (7)

Answer 13

1. Dormant
2. Discretionary
3. Demanding
4. Dominant
5. Dangerous
6. Dependent
7. Definitive

Question 14

Dormant stakeholder

Answer 14

possess power to impose their will through coercive, utilitarian or symbolic means, but have little or no interaction/involvement with the firm as they lack legitimacy or urgency

Question 15

Discretionary stakeholders

Answer 15

likely to be recipients of corporate philanthropy. No pressure on managers to engage with this group, but they may choose to do so. Ex.: beneficiaries of corporate philanthropy

Question 16

Demanding stakeholder

Answer 16

those with urgent claims, but no legitimacy or power. Irritants for management, but not worth considering. Ex.: are people with unjustified grudges or serial complainers

Question 17

Dominant stakeholder

Answer 17

the group that many theories position as the only stakeholders of an organization or project. Likely to have a formal mechanism in place acknowledging the relationship with the organization or project

Question 18

Dangerous stakeholder

Answer 18

those with powerful and urgent claims will be coercive and possibly violent. Ex.: employee sabotage or coercive/unlawful tactics used by activists

Question 19

Dependent stakeholder

Answer 19

stakeholder who are dependent on others to carry out their will, because they lack the power to enforce their stake. Ex.: local residents & animals impacted by the BP oil spill

Question 20

Definitive stakeholder

Answer 20

an expectant stakeholder who gains the relevant missing attribute. Often dominant stakeholders with an urgent issue, or dependent groups with powerful legal support

Question 21

Responsibility

Answer 21

Optimal level stakeholder agency
High stakeholder engagment

Question 22

Neoclassic

Answer 22

Low stakeholder agency
Low stakeholder engagement

Question 23

Paternalism

Answer 23

High stakeholder agency
Low stakeholder engagement

Question 24

Strategic

Answer 24

Low stakeholder agency
High stakeholder engagement

Question 25

Dialogue skills and techniques for stakeholder engagement

Answer 25

• Best alternative to a negotiated agreement
• Don’t make assumptios
• Focus on shared interests and value
• Co-create solutions, avoid paternalism

Question 26

Areas and guiding questions for firms

Answer 26

Financials
Customer
Internal
People
Environment
Society

Question 27

2 types of indicators

Answer 27

• Lagging indicators
• Leading indicators
  These indicators are linked by cause and effect relationships

Question 28

Lagging indicator

Answer 28

indicate whether the strategic objectives in each perspective are achieved ➔ Reflect strategic core issues

Question 29

Leading indicator

Answer 29

express the specific competitive advantages of the firm and represent how the results – reflected by the lagging indicators – should be achieved ➔ Reflect performance drivers