Chapter 3: Identifying Stakeholders and Issues

Pluralistic society

One where influence or power is decentralized by dispersing it among a variety of institutions.

External stakeholders

Owners, associates, employee associations, public, and directors.

Two important reasons for managers to identify stakeholders.

Recognize groups that control scarce resources; maintain the legitimacy for business as an institution in society.

Owners

stakeholder; usually referred to as sharholders, those individuals or groups who have invested in the form of equity/shares.

Freeman

Argued that the use of the word stakeholder is important because it connotes legitimacy.

Internal Stakeholders

CEO's, line managers, operators, analyst of technostrusture, support staff and ideology.

Normative stakeholders

Those to whom the organization has an obligation & stakeholders from whom the corporation has voluntarily accepted benefits (ie. financiers, employees, consumers, suppliers & local community).

Arguement for the stakeholder concept

- An appreciation for stakeholders is fundamental to understanding how to make $. - Responding to stakeholders promotes good business. - Stakeholder thinking creates loyalty.

Charities

- Stakeholders - Donors excpect careful stewardship of funding in return of funding from businesses. - part of the non-profit sector.

Cultural and ethnic associations

- Stakeholders - Memberships involve volunteerism through the donation of employee time and efforts & associations with such organizations is often viewed as a source of business contacts.

Government

- stakeholders. - Formed ny politicians staffed by civil servants. Businesses must consider the impact oof both these groups within each level. - Associated with political parties and the legal system.

Religious Groups

-Stakeholders -occasionally speak of concerns with capitalism and the dangers of free market and profits. - business persons are individually influenced by beliefs and values upheld by religious groups.

Arguement against the stakeholder concept

1. problem of categorization. 2. challenges in meeting expectations. 3. dilution of top management focus. 4. impracticality of shared governance.

Primary interaction stakeholders

Employees (unions), shareholders, creditors, suppliers, customers, competitors, wholesalers.

Secondary interaction stakeholders

Local communities, gov'ts, social activist groups, media, business support groups, and general public.

Cutomers

Stakeholder; can be members of the public, other corporations, or gov'ts. The source of revenue for most corporations.

Educational Institutions

Stakeholders; Businesses rely on institutions to provide them with educated and skilled employees

Lenders

Stakeholders; Different types of individuals or groups lend corporations money.

Directors

Stakeholders; Elected by shareholders to represent their interests.

Employees

Stakeholders; Individuals who work for the corporation. Most important stakeholders; have considerable influence bc they're critical for the operation of the corporation.

Competitors

Stakeholders; existing and & potential future ones shoould be considered.

Dealers, Distributors & Franchises

Stakeholders; in some corporations that don't distribute a firm's product to customers along a distribution or supply chain.

Service Professionals

Stakeholders; influence in the form of advice they provide the corporation (ie. Accountants).

Suppliers

Stakeholders; influence varies, depending on the number of these stakeholders.

Joint Venture Participants

Stakeholders; partners cooperating in a particular enterprise or project.

Society

Stakeholders; represents the general public.

Derivative stakeholders

those from whom the corporation hasn;t accepted beenfits, they hold power ober the corporation and may exert a beneficial or harmful experience (ie. NGO's and competitors).