1. Chapter 3: Stakeholder Management and Communication
Corporate Communication:
A Guide to Theory & Practice

2. Overview Introduction to the concept of stakeholders
Overview of models used by organizations for communicating and collaborating with stakeholders
Contemporary organizations realize they need to communicate with their stakeholders to develop and protect their reputations
Came about in part because of government and international community promoted this perspective

3. Stakeholder initiatives
Range of schemes and initiatives have developed at industry, national and transnational level
UN Global Compact Initiative
Global Reporting Initiative
World Bank’s Business Partners for Development
OECD’s Guidelines for Multinational Companies

4. Stakeholder Management
Neo-classical theory:
purpose of organizations is to make profits
accountable to themselves and shareholders
Socio-economic theory:
other groups besides shareholders count
accountability extends to groups considered to be important for the continuity of the organization and the welfare of society
There is now widespread move away from the neo-classical theory and adoption of the stakeholder perspective.

5. Neo-classic model
The organization is the centre of the economy – investors, suppliers and employees are contributing inputs (investment, resources, labour)
Power lies with the corporation
Benefits go to customers
Contributors of inputs are compensated appropriately

6. Stakeholder model
All groups or individuals with legitimate interest in an organization do so to obtain benefits
No priority for one set of interests or benefits over another
Recognises that organizations and various stakeholder groups are mutually dependent
More groups are recognised
Far more complex and dynamic picture emerges with this version
Takes into account instrumental AND normative reasons for engaging with stakeholders

7. The nature of stakes and stakeholders
Stakeholder: any group or individual who can affect or is affected by the achievement of the organization’s purpose and objectives (Freeman, 1984)
Stake: ‘an interest or a share in an undertaking, [that] can range from simply an interest in an undertaking at one extreme to a legal claim of ownership at the other extreme’ (Carroll, A.B., 1996)

8. Types of stakes Types of stakes Description Example Equity stakes
Held by those with direct ownership
Shareholders, directors, minority interest owners
Economic or market stakes
Those who have an economic interest, but not an ownership interest
Employees, customers, suppliers, competitors
Influencer stakes
Neither equity or economic stake but have interests
Consumer advocates, environmental groups, trade organizations, government agencies
Edward Freeman was among one of the first writers to describe stakeholders.
(Freeman, 1984)

9. Types of stakeholders Type of stakeholder Description Example
Primary Stakeholder
Without their continued participation the organization cannot survive
Employees
Suppliers
Consumers
Secondary Stakeholder
Can generally influence or affect, or are influenced or affected by the organization but are not engaged in financial transactions
Do have a moral/normative interest Capacity to mobilize public opinion for or again organization
Media
Special interest groups

10. Alternative stakeholder conceptualization
Contractual stakeholders
Community stakeholders
Customers
Consumers
Employees
Regulators
Distributors
Government
Suppliers
Media
Shareholders
Local communities
Lenders
Pressure groups
Clarkham, 1992

11. Benefits of stakeholder model
To be a good citizen as an end in itself
Employee morale
Reputation of organization

12. CSR initiatives Direct outcome of shift in models
Includes philanthropy, community involvement, ethical and environmentally friendly business practices
Recognizes business needs to deliver wider societal value beyond shareholder/market value alone

13. Basic stakeholder identification analysis
1. Who are the organization’s stakeholders?
2. What are their stakes?
3. What opportunities and challenges are presented to the organization in relation to these stakeholders?
4. What responsibilities (economic, legal, ethical, and philanthropic) does the organization have to all its stakeholders?
5. In what way can the organization best communicate with and respond to these stakeholders and address these stakeholder challenges and opportunities?

14. Stakeholder salience model

15. The power–interest matrix
‘Key players’ need to be communicated with at all times
‘Keep informed’ need to have regular communication
‘Keep satisfied’ players are most challenging to maintain relations wit because they lack interest

16. Stakeholder Communication: From Awareness to Commitment

17. Organization–stakeholder communication models
Examples of informational strategy are press releases, newsletters and reports on a company website
Persuasive strategy works through campaigns, meetings and discussions with stakeholders to try to change and tune knowledge, attitudes or behaviour of stakeholders to be favourable.
Includes corporate adverting and educational campaigns
Dialogue strategy is when both parties engage in an exchange – focus is on mutual understanding and decisions
Examples include active consultation

18. Characteristics of the ‘old’ and ‘new’ approaches to organization-stakeholder relationships

19. Collaboration and Engagement
Focus on changing the relationship between the organization and its stakeholders from ‘management’ to ‘collaboration’ and from ‘exchange’ to ‘long-term relationships’.
'Collaboration’ implies a two-way symmetrical model of dialogue and consultation