From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999 Stakeholders...

From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999

Stakeholders

stakeholder expectations and organisational purposes


Objectives Students are to be able to evaluate the power and

levels of a variety of pertinent stakeholders of organisations.

Students are to be able to evaluate the interest levels of a variety of pertinent stakeholders of organisations.

Students are to be able to use their evaluation of the power and interest levels of a variety of pertinent stakeholders of organisations, to show how strategies can impact upon and be impacted upon by a variety of stakeholder groups.

Students are able to show how management styles play a role in stakeholdering.


Strategicanalysis

Strategicchoice

Strategyimplementation

Exhibit 1.4 A summary model of the elements of strategic management

Expectationsand purposes

Organisationstructure and

design

Managingstrategicchange

Resourceallocation and

control

Strategicoptions

Basesof strategic

choice

Strategyevaluation and

selection

Resources,competencesand capability

Theenvironment


Organisational purposes• Mission• Objectives

Exhibit 5.1 Influences on organisational purposes

Corporate governance• Whom should the organisation serve?• How should purposes be determined?

Business ethics• Which purposes should

be prioritised?• Why?

Cultural context• Which purposes are prioritised?• Why?

Stakeholders• Whom does the organisation serve?


STAKEHOLDERS

“Those who depend on the organisation for the realisation of some of their goals and in turn the organisation depends on them for the full realisation of its goals”

•Customers•Competitors•Government•Suppliers•The community•Employees•Lenders


CORPORATE GOVERNANCE AND STAKEHOLDERS

Shareholders widespread or close? institutional intermediaries? bankers? cross-shareholding?

Employees Co-determination, shareholders or employees?

Lenders partners or “contractors”?

Customers Caveat Emptor, market pressure or regulation?


(a) Within organisations Hierarchy (formal power),

e.g. autocratic decision making Influence (informal power),

e.g. charismatic leadership Control of strategic resources,

e.g. strategic products Possession of knowledge and skills,

e.g. computer specialists Control of the environment,

e.g. negotiating skills Involvement in strategy

implementation,

e.g. by exercising discretion

(b) For external stakeholders Control of strategic resources

e.g. materials, labour, money Involvement in strategy implementation,

e.g. distribution outlets, agents Possession of knowledge (skills),

e.g. subcontractors Through internal links,

e.g. informal influence

Exhibit 5.6a Sources of power


(a) Within organisations Status Claim on resources Representation Symbols

(b) For external stakeholders Status Resource dependence Negotiating arrangements Symbols

Exhibit 5.6b Indicators of power


Growth vs profitability Short term vs investment Control vs professional managers Ownership vs funding Ownership vs accountability Efficiency vs jobs Mass appeal vs quality

Exhibit 5.3 Some common conflicts of expectations


Exhibit 5.5 Stakeholder mapping: the power/interest matrixSource: Adapted from A. Mendelow, Proceedings of the Second International Conference on Information Systems, Cambridge, MA, 1991

Low High

Low

A

Minimaleffort

B

Keepinformed

High

C

Keepsatisfied

D

Keyplayers

LEVEL OF INTEREST

POWER


STAKEHOLDER MAPPING- SOME GUIDELINES

Positioning related to specific strategies Stakeholders may need to be sub-divided Distinguish the role for the individual Identify “political” priorities by:

plot how stakeholders would line up plot how stakeholders would need to line up identify mismatches include key maintenance activities


STAKEHOLDER MAPPING- ‘test’ questions

Power“If I were to pursue this strategy with disregard to theviews of this stakeholder could they stop me?”

Interest

“How high is this strategy in their priorities - are they

likely to actively support or oppose this strategy?”


STAKEHOLDER MAPPING- typical maps

Typical Map Dangers PrioritiesBattleground ‘Limbo’ Supporter dominates

Opponents retreatStalemate

Dream Ticket Complacency Keep informedKeep Satisfied

Lost Cause Lose ‘the war’ Change orientationRetreat

Lone Champion Champion Lost Broaden supportDogged Opponent Opponent prevails Change orientation

Sidepayments)Reduce powerFind Champion

Political Trap Stakeholder re-positions

Maintain in positionSeek Champion

Worthy cause No leversDrain resources

Keep informedHelp organise

Timebomb Negative lobbying Maintain positionAutocrat’s Dream Complacency Proceed


Management Styles

We need to consider how management styles differ when dealing with each stakeholder

group


Low High

Low

Direction/edict style

Regular general

communication

Symbolic signalling

Direction education style

Regular general

communication

Symbolic signalling

High

Education/intervention style

Personal memoing

Face to face

Participation/intervention

style

Face to face

communication

Power

Stakeholders and management styles

Level of interest


STYLE MEANS/CONTEXT BENEFITS PROBLEMS CIRCUMSTANCES OFEFFECTIVENESS

Education and Group briefings assume Overcoming lack of Time consuming communication internalisation of strategic (or mis)information Direction or progress

logic and trust of top may be unclear management

Collaboration/ Involvement in setting the Increasing ownership Time consuming participation strategy agenda and/or of a decision or Solutions/outcome

resolving strategic issues process May improve within existing by taskforces or groups quality of decisions paradigm

Intervention Change agent retains Process is Risk of perceived Incremental or non-crisis co-ordination/control guided/controlled manipulation transformational change delegates elements of but involvement change takes place

Direction Use of authority to set Clarity and speed Risk of lack of Transformational change direction and means of acceptance and ill- change conceived strategy

Coercion/edict Explicit use of power May be successful in Least successful Crisis, rapid through edict crises or state of unless crisis transformational change

confusion or change in establishedautocratic cultures

Incremental change or long-time horizontal transformational change

Exhibit 11.6 Styles of managing strategic change


Activity Read Johnson & Scholes (1999) section 5.3.2 of the text and

illustration 5.4 for practical advice on how to undertake a stakeholder mapping.

AND

Carry out a stakeholder mapping exercise for the Granada buy out of Forte Hotels. Support this with researched evidence (newspaper articles, journal articles, web searches etc.) Bring it to the seminar for discussion.

OR Read the Sheffield Theatres Trust case study on page 670-84, Johnson

& Scholes, 1999, Exploring Corporate Strategy 5th Ed. And carry out a stakeholder mapping exercise.

OR

Carry out a stakeholder mapping exercise for an hospitality/tourism organisation and strategy/scenario of your choice. Support this with researched evidence (newspaper articles, journal articles, web searches etc.) Bring it to the seminar for discussion.


MORETON UNIVERSITY

A case study


Low High

Low

High

POWER

LEVEL OF INTEREST

A

Students

DDirector C (-)

Vice Chancellor (0)

Chairman (-)

BDirector A (+)Competitor X (-)Principal F (-)

CFunding Body

Director E

Director S

COMPUTER SERVICES - ‘monopolist’ strategyMap A - current situation (1998)


Low High

Low

High

POWER

LEVEL OF INTEREST

A

Students

DDirector A (+)Director S (+)Director C (-)Vice Chancellor (+)

BCompetitor X (-)Principal F (0)

CFunding Body

Director E

Chairman

COMPUTER SERVICES - ‘monopolist’ strategyMap B - the preferred situation


MORETON UNIVERSITY- political priorities (monopolist strategy)

Dilute power of Director ‘C’

Lobby Directors ‘E’ and ‘S’ to increase interest

Director ‘A’ now on Governing Body

Inform Chairman of difficulties elsewhere

Improve service to colleges - silence Principal ‘F’


MORETON UNIVERSITY

- assessment of power

INTERNAL STAKEHOLDERSIndicator Director A Director C Director S ChairmanStatus H H H HResources L H M N/aRepresentation

L L L H

Symbols M H M HEXTERNAL STAKEHOLDERS

Indicator FundingBody

Principal F Students

Status H M LResourceleverage

H L M

Negotiation H L LSymbols H M L


The Political Battleground

+ + +

- - -


The Dream Ticket

+ + +

+ + +


The Potential Lost Cause

- - -

- - -


The Lone Champion

+


The Dogged Opponent

__


The Political Trap

? ? ?

? ? ?


The Worthy Cause

+ + +

+ + +


The Political Timebomb

- - -

- - -


The Autocrat’s Dream

? ? ?

? ? ?

From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999 Stakeholders...

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Transcript of From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999 Stakeholders...