Somrita Sen

UH13050

XIMB

Trends in Stakeholder

Management

Who is a stakeholder? A stakeholder can be defined as a party that has an

interest in an enterprise or project.

The word ‘stakeholder’ first appeared in themanagement literature in an internal memorandum atthe erstwhile Stanford Research Institute in 1963. Itwas meant to refer to stockholders as the only groupto whom management need be responsive.

Initially defined as “those groups without whosesupport the organization would cease to exist”

A corporate stakeholder can affect or be affected bythe actions of a business as a whole- typically theinvestors, employees, customers and suppliers.

Modern theory goes beyond this conventional notionto embrace additional stakeholders such as thecommunity, government and trade associations.

Some stakeholders

Government Employees

Business

Community

Consumers

Owners

Stakeholder Management

Earlier focus used to be only on the customers.

But with the passing years, emphasis has been

laid on an inclusive approach to managing the

various groups and individuals, keeping in mind

the overall health of the organization.

Thus, Stakeholder Management, as a concept,

refers to the necessity for an organization to

manage the relationships with its specific

stakeholder groups in an action oriented way.

And it is important because it is a critical

component to the successful delivery of any

project, program or activity

Steps in stakeholder

management

Identifying the stakeholders

Prioritizing the identified stakeholders based on

power and influence

Knowing more about the afore mentioned

stakeholders

Engaging and communicating with the

stakeholders

Identifying the stakeholders

Understanding from a rational perspective who

are the stakeholders and what are the perceived

stakes involved.

The most practiced way is through brainstorming.

It is simple yet effective.

This is a team task.

Key questions can be posed to identify the said

stakeholders.

A useful tool in this regard is coming up with a

stakeholder map for the organization. It is an

invaluable way to identify who the stakeholders

are and what are their interests in the

organization.

Stakeholder map for an organization

Prioritizing the stakeholders

One way of doing this is by plotting the identified

stakeholders on the power/interest grid.

This grid is a tool as there are others

This is necessary in order to find out that who in

the long list of stakeholders have the power to aid

or block the success of the organization, who is

interested and who is not.

The eventual actions on the stakeholders depend

on this categorization

Power/Interest grid

Power

Interest

Latents

Keep

Satisfied

Promoters

Manage

closely

Monitor

Apathetics

Keep

Informed

Defenders

Knowing the key stakeholders

The stakeholders so prioritized are the key

stakeholders

The next step is to know more about these

people/ groups etc.

This can be done through asking several

important questions and getting the

corresponding answers.

This is important as only then appropriate steps

can be taken to engage the stakeholders to the

maximum benefit of the organization.

Examples of key questions What financial or emotional interest do they have in the outcome of your

work? Is it positive or negative?

What motivates them most of all?

What information do they want from you?

How do they want to receive information from you? What is the best way of communicating your message to them?

What is their current opinion of your work? Is it based on good information?

Who influences their opinions generally, and who influences their opinion of you? Do some of these influencers therefore become important stakeholders in their own right?

If they are not likely to be positive, what will win them around to support your project?

If you don't think you will be able to win them around, how will you manage their opposition?

Who else might be influenced by their opinions? Do these people become stakeholders in their own right?

Engaging the stakeholders Based on the power/interest grid, the

engagement practices undertaken for thestakeholders can vary as follows-

High power, interested people: Manage closely.Best channels: Issue, Change Logs, StatusMeetings (promoters)

High power, less interested people: Keepsatisfied. Best channels: Steering Committee,Board Meeting Updates (latents)

Low power, interested people: Keep informed.Best channels: In-Person, Video, Email Updates(defenders)

Low power, less interested people: Monitor.Best channels: Send Email, Status Reports(apathetics)

Few possibilities Assign owners from the organization to manage each

high value stakeholder based on their level ofpotential impact. Who should manage “high impact”stakeholders? They should likely be assigned to theED and Board members. What about “low impact”stakeholders? They could be great candidates for thee-newsletter.

Determine a timeline for regular communicationswith the key stakeholders to make sure they arealways up-to-date on what they need to know tosupport the organization’s goals. Work to minimize thetime spent focused on those who are not in a strongposition to help achieve the goals.

Tailor the key messages to align the firm’s interestswith theirs.

Some points

Stakeholder engagement requires a new set of

skills within the organizations so that the

employees can connect effectively with the

external stakeholders

Moreover, in the present scenario, it has become

essential that companies view the whole process

of stakeholder management as part of the day to

day core business.

Focus is essential when dealing with a large

number of stakeholders, so that the whole

process is effective.

In fact stakeholder management, in order to be

fruitful, must be -

issue-based – consultative or co-operative.

pro-active instead of reactive;

learning orientated in order to get to tangible

issue-based results;

measurable in terms of a company's internal

targets; and

based on a thorough methodology.

Some examples

Currently, there is an increasing tendency for

companies to do what good governments already

do: become better by engaging their

stakeholders. Coca Cola, for example, is trying by

taking a collective action approach to rising water

challenges, Nestlé is wrestling to find solutions for

a more sustainable cocoa value chain and Kraft

Foods supports African Cashew farmers.

Stakeholder engagement can work and create

shared value.

References

http://en.wikipedia.org/wiki/Stakeholder_manage

ment

http://www.investopedia.com/terms/s/stakeholder.

asp

https://www.prince2.com/blog/how-identify-

stakeholders

http://www.theguardian.com/sustainable-

business/stakeholder-engagement-practical-

guide

www.shrmindia.org

Strategic Management: A Stakeholder Approach

By R. Edward Freeman

THANK YOU