Chapter 2 – Stakeholders and Issues Management

Approaches

By:

Sarah Obaidee

Joseph Olivas

Meghedi Dirghazarianmalhami

What is a stakeholder?

Individual or group that affects all

aspects of decision making in an

organization.

Primary stakeholders are individuals

immediately affected by the

organization. i.e. suppliers, owners,

employees, etc.

Secondary stakeholders include a

variety of interest groups. i.e. media,

lobbyist, etc.

What is a stake?

A stake is any interest, share, or claim that a group or

individual has in the outcome of a corporation’ policies,

procedures, or actions towards others.

Stakes of being a student at Woodbury University?

Interest?

Education,…..?

Stakeholder’s Approach

Theory that preaches ethical

behavior in order to gain a

competitive advantage.

Strives to reach “win-win”

outcomes.

Companies that practice this

theory in their industry tend to get

a leg up on their competitor. i.e.

Lowes v Home Depot.

Lowes

Home Depot

Stakeholder Analysis

Assist in the understanding between an organization and its

constituents.

Due to the uniqueness of each situation, the approach must

be mapped out in order to develop a strategy.

The framework is developed not only for individuals in high

ranking positions, but also so any employee may see the

corporate dealings.

Role of the CEO in Stakeholder Analysis The role of a CEO is to get a handle of the situation to help

approach and mediate concerns from customers, media, etc.

CEO is there to answer the who, what, where, why, when,

and how of the situation

Stakeholder Analysis in 7 Steps

1. Map stakeholder relationships

2. Map stakeholder coalitions

3. Assess the nature of each stakeholder’s interest

4. Assess the nature of each stakeholder’s power

5. Construct a matrix of stakeholder moral responsibilities

6. Develop specific strategies and tactics

7. Monitor shifting coalitions

Stakeholder Dispute Resolution Methods

Dispute resolution is a tactic also known as “alternative

dispute resolution”

Dispute resolution is a variety of methods to help possible

litigants resolve conflicts

Ranges from parties taking control of process to giving

control to a third party

i.e. face to face negotiation and litigation

Ethical Reasoning for Stakeholders

Ethical reasoning involves trying to analyze what is fair and

who is being affected by the actions.

Involves helping and identifying the weaker and quiet

stakeholders getting their voices heard in the decision

process

What can be done when stakeholder are not being treated

fairly?

Moral Responsibilities The analysis ensures that managers are prepared to define their

own moral responsibilities, as well as those of the company.

The approach focuses the organization’s attention on both

internal and external areas.

Managers are liable for the morals of the company, that can

quickly be made public due to technology.

If a stakeholder knows the roles, it clarifies the responsibilities of

the task.

Issue Management

Issue management is used to forecast

the actions to take for emerging

factors that have an impact on

organizations and stakeholders.

Controversy can be avoided if proper

issue management is implemented.

The evolution of an issue can be

traced with proper issue

management.

Moral Dimension of Stakeholder and Issue Management

Studies argue that being moral is “issue dependent”

They argue that the severity of the issue is what triggers

reasoning.

Morals are necessary in leadership positions, as the

decisions affect all stakeholders.

Identifying issues and ensuring that they are moral is a goal

for all managers to benefit their company.

The Two Frameworks Frameworks can be used to map

and manage issues before they

arise.

Frameworks can also be used to

plan and manage to prevent, or to

handle issues that may have

already arisen.

Frameworks are not organization

specific

Stakeholder analysis can display

why strategies and actions stunt the

evolution of an organization.

First Approach

The six-step issue management process. Environmental scanning and issues identification. Issue analysis Issue ranking prioritizing Issue resolution strategizing Issue response and implementation Issue evaluation and monitoring

.

Second Step Seven-phase issue

development process. A felt need arises Media coverage is deployed Interest group development Policies are adopted by

leading political jurisdictions The federal government

gives attention to the issue. Issues and policies evolve

into legislation and regulation

Issues and policies enter litigation.

Felt Need

Media Coverage

Interest Group Development and Growth

Leading Political

Jurisdictions

Federal Government

Attention

Legislation and

Regulation

Litigation

Managing Crises Crisis management emerged from observing how

corporations and leaders react to crises.

Steven Fink describes crisis as “a turning point for better or

worse.”

The direction that organization moves into is dependent on

the leaders’ reaction.

Four Crisis Management Stages Pre-crisis

Prodromal stage Warming; symptoms

Crisis Occurs Acute stage

Point of no return

Lingering Chronic stage

Self-doubt, self-analysis

Health restored Conflict resolution stage

Return to normalcy

First Stage

Prodromal Stage

Warning stage

Does not always occur or is not evident.

This stage should be carefully observed.

Must be taken seriously in order to prevent crisis.

If does not occur, or is ignored, the point of no return quickly

occurs.

Second Stage Acute Crisis

Damage has already occurred

Damage control must be administered

Stage where the severe damage occurs

Considered the shortest stage

Third Stage

Chronic crisis

Clean up phase

Time of healing,

recovery ,and self analysis

Studies have shown when

there is no crisis plan set

companies stay in this

phase 2.5 time longer

Fourth Stage Crisis Resolution

Final stage – Crisis Management Goal

“What can and should an organization do to speed up this

phase and resolve crisis once and for all?”

How Executives Have Responded to Crisis? Five phases of corporate social response to crises Used to evaluate and examine moral responsibilities of

corporate response 1. Reaction

2. Defense

3. Insight

4. Accommodation

5. Agency

Any Questions?