2 Quote of the Day A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it. - Max Planck
3 Extra Credit Hands on Portland http://www.handsonportland.org/ http://www.handsonportland.org/ Movies (Web Page)
4 Introduction to Chapter 3 Stakeholders Individuals and groups with amultitude of interests, expectations,and demands as to what businessshould provide to accommodatepeople’s lives and lifestyles
5 Origins of the Stakeholder Concept Stake An interest or a share in an undertaking and can be categorized as: An Interest A Right Ownership Legal Right Moral Right
6 Origins of the Stakeholder Concept Stakeholder An individual or a group that hasone or more of the various kinds ofstakes in the organization
7 Who Are Business Stakeholders? Business Stakeholder Groups Media Suppliers Special-Interest Groups Society General Public Competitors Customers Community Stockholders Employees
8 DuPont’s Stakeholder Groups Shareholders Customers Employees Society
9 Evolution of the Business Enterprise Production View Managerial View Stakeholder View
10 Social Stakeholders Primary social stakeholders Shareholders and investors Employees and managers Customers Local communities Suppliers and other business partners Secondary social stakeholders Government and regulators Civic institutions Social pressure groups Media and academic commentators Trade bodies Competitors
11 Production and Managerial Views of the Firm Figure 3-2
14 Core, Strategic, and Environmental Stakeholders Core stakeholders are essential for the survival of the firm Strategic stakeholders are vital to the organization’s success and the threats and opportunities the organization faces Environmental stakeholders are all others in the organization's environment that are not core or strategic
16 A Typology of Stakeholder Attributes Legitimacy refers to the perceived validityor appropriateness of thestakeholder’s claim to a stake Power refers to the ability or capacityof a stakeholder to producean effect Urgency refers to the degree to whichthe stakeholder’s claimdemands immediate attention
21 Strategic, Multifiduciary, and Synthesis Views Strategic Approach views stakeholders primarily asfactors managers should managein pursuit of shareholder profits Multifiduciary Approach views stakeholders as a groupto which management has afiduciary responsibility Stakeholder Synthesis Approach considers stakeholders as a groupto whom management owes anethical, but not a fiduciaryobligation
22 1. Who are our stakeholders? 2. What are our stakeholders’ stakes? 3. What opportunities and challenges do our stakeholders present to the firm? 4. What economic, legal, ethical, and philanthropic responsibilities does the firm have to its stakeholders? 5. What strategies or actions should the firm take to best address stakeholder challenges and opportunities? Key Questions In Stakeholder Management
24 What Are Our Stakeholders’ Stakes? Identify the nature/legitimacy of a group’s stakes Identify the power of a group’s stakes Identify specific groups within a generic group
25 What Strategies or Actions Should Management Take? Do we deal directly or indirectly with stakeholders? Do we take the offense or the defense in dealing with stakeholders? Do we accommodate, negotiate, manipulate or resist stakeholder overtures? Do we employ a combination of the above strategies or pursue a singular course of action?
26 Diagnostic Typology of Organizational Stakeholders Stakeholder Type Mixed Blessing Strategy: Collaborate Stakeholder Type Mixed Blessing Strategy: Collaborate Stakeholder Type Nonsupportive Strategy: Defend Stakeholder Type Nonsupportive Strategy: Defend Stakeholder Type Supportive Strategy: Involve Stakeholder Type Supportive Strategy: Involve Stakeholder Type Marginal Strategy: Monitor Stakeholder Type Marginal Strategy: Monitor High Low Stakeholder’s Potential for Cooperation with Organization HighLow Stakeholder’s Potential for Threat to Organization ? Figure 3-9
27 Summary of Four Stakeholder Types … managers should attempt to satisfy minimally the needs of marginal stakeholders and to satisfy maximally the needs of supportive and mixed blessing stakeholders, enhancing the latter’s support for the organization.
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