Presentation on theme: "The Stakeholder Approach to Business, Society and Ethics"— Presentation transcript:
1The Stakeholder Approach to Business, Society and Ethics 3The Stakeholder Approach to Business, Society and Ethics11
2Chapter Three Objectives Define stake and stakeholderDifferentiate between production, managerial, and stakeholder views of the firmDiscuss three values of the stakeholder modelConsider the concept of stakeholder managementIdentify the essence of stakeholder managementExplain stakeholder management capability (SMC)22
3Chapter Three Outline Origins of the Stakeholder Concept Who Are Business’s Stakeholders?Strategic, Multifiduciary, and Synthesis ViewsThree Values of the Stakeholder ModelKey Questions of Stakeholder ManagementEffective Stakeholder ManagementStakeholder Management Capability(SMC)The Stakeholder CorporationStakeholder Power: Four Gates of EngagementPrinciples of Stakeholder ManagementSummaryOrigins of the Stakeholder ConceptWhat Is a Stake?What Is a Stakeholder?Who Are Business’s Stakeholders?Production, Managerial, and Stakeholder ViewsPrimary and Secondary StakeholdersCare, Strategic, and Environmental StakeholdersA Typology of StakeholdersStrategic, Mulitfiduciary, and Synthesis ViewsThree Values of the Stakeholder ModelStakeholder ManagementWho Are Our Stakeholders?What Are Our Stakeholders’ Stakes?What Opportunities and Challenges Do Our Stakeholders Present to Our Firm?What Responsibilities Does Our Firm Have to Its Stakeholders?What Strategies or Actions Should Management Take?Effective Stakeholder ManagementStakeholder Management CapabilityThe Stakeholder CorporationSummary
4Introduction to Chapter Three StakeholdersIndividuals and groups with a multitude of interests, expectations, and demands as to what business should provide to society
5Origins of the Stakeholder Concept What is a stake?An interest or a share in an undertaking and can be categorized as:Interest Right OwnershipLegalMoral
6Origins of the Stakeholder Concept What is a stakeholder?An individual who possesses a stake
7Who Are Business Stakeholders? GovernmentEmployeesBusinessCommunityConsumersOwners
8Who Are Business Stakeholders? Evolution and Development of theStakeholder ConceptViews of the FirmProduction Managerial Stakeholder
9Who Are Business Stakeholders? Production and Managerial Views
11Who Are Business Stakeholders? Primary and Secondary StakeholdersPrimary stakeholders are those stakeholders that have a direct stake in the organization and its successSecondary stakeholders are those that have a public or special interest stake in the organization
12Who Are Business Stakeholders? Core, Strategic, and Environmental StakeholdersCore stakeholders are essential to the survival of thefirmStrategic stakeholders are vital to the organizationand the threats and opportunities the organizationfacesEnvironmental stakeholders are all others in theorganization's environment
13Who Are Business Stakeholders? Legitimacy, Power, Urgency:A Typology of Stakeholder AttributesLegitimacy refers to the perceived validity of the stakeholder’s claim to a stakePower refers to the ability or capacity of a stakeholder to produce an effectUrgency refers to the degree to which the stakeholder’s claim demands immediate attention
15Strategic, Multifiduciary, and Synthesis Views of Stakeholders Strategic approach considers stakeholders primarily as factors managers should manage in pursuit of shareholder profitsMultifiduciary approach considers stakeholders as a group to which management has a fiduciary responsibilitySynthesis approach considers stakeholders as a group to whom management owes an ethical, but not a fiduciary responsibility
16Three Values of the Stakeholder Model DescriptiveInstrumentalNormative
17Key Questions In Stakeholder Management Who are our stakeholders?What are our stakeholders’ stakes?What opportunities and challenges do the stakes and stakeholders present?What economic, legal, ethical, and philanthropic responsibilities does our firm have?What strategies or actions should our firm take to best manage stakeholder challenges and opportunities?
18Key Questions In Stakeholder Management Who are our stakeholders?Management must identify generic stakeholder groups and specific subgroups
20Key Questions In Stakeholder Management What are our stakeholders’ stakes?Determine the nature/legitimacy of a group’s stakesDetermine the power of a group’s stakesDetermine specific groups within generic groups
21Key Questions In Stakeholder Management What opportunities and challenges do stakeholders present?Opportunities are to build good productive working relationships with the stakeholdersChallenges are representative of how the firm handles the stakeholders
23Key Questions In Stakeholder Management What economic, legal, ethical, and philanthropic responsibilities does our firm have to its stakeholders?Philanthropic Responsibilities Be a good corporate citizen.Ethical Responsibilities Be ethical.Legal Responsibilities Obey the law.Economic Responsibilities Be profitable.
24Key Questions In Stakeholder Management Stakeholder/Responsibility MatrixStakeholdersEconomicLegalEthicalPhilanthropicOwnersCustomersEmployeesCommunityPublic at largeSocial ActivistsOther
25Key Questions In Stakeholder Management What strategies or actions should our firm take to best manage stakeholder challenges and opportunities?Should we deal directly or indirectly with stakeholders?Should we take the offense or the defense in dealing with stakeholders?Should we accommodate, negotiate, manipulate or resist stakeholder overtures?Should we employ a combination of the above strategies or pursue a singular course of action?
26Key Questions In Stakeholder Management Types of StakeholdersStakeholder Type 4 Mixed BlessingStrategy: CollaborateStakeholder Type 3 NonsupportiveStrategy: DefendStakeholder Type 1 SupportiveStrategy: InvolveStakeholder Type 2 MarginalStrategy: MonitorHighLowStakeholder’s Potential for Cooperation With OrganizationStakeholder’s Potential for Threat to Organization?
27Effective Stakeholder Management Careful assessment of the five core questions:Who are our stakeholders?What are our stakeholders’ stakes?What opportunities and challenges do stakeholders present?What economic, legal, ethical, and philanthropic responsibilities does our firm have?What strategies or actions should our firm take to best manage stakeholder challenges and opportunities?
33Selected Key Terms Rational level Core Stakeholders Stake Stakeholder inclusivenessStakeholder management capability (SMC)Stakeholder symbiosisStakeholder view of the firmStrategic stakeholderTransactional levelUrgencyCore StakeholdersEnvironmental StakeholdersLegitimacyManagerial view of the firmPowerPrinciples of stakeholder managementProcess levelProduction view of the firm