ch.3 The stakeholder approach to business, society, and ethics

Clarkson principles

Intended to provide managers with guiding precepts regarding how stakeholders should be treated.

rational level

Level 1 descriptive and somewhat analytical, because the legitimacy of stakes, the stakeholders' power, and urgency are identified.

process level

Level 2 organizations go a a step further than level 1 are actually develop and implement processes—approaches, procedures, policies and practices—by which the firm may scan the environment and gather pertinent information about stakeholders, which is then used for decision-making purposes.

proximity

The spatial distance between the organization and its stakeholders.

supportive stakeholder

a high potential for cooperation and a low potential for threat (this is the ideal stakeholder)

stakeholder culture

a major factor supporting successful stakeholder management.

stakeholder responsibility matrix

a template that managers might use to systematically think through its various responsibilities to each stakeholder group.

stakeholder engagement

an approach by which companies successfully implement the transactional level of strategic management capacity.

stakeholder

an individual or a group that has one or more of the various kinds of stakes in the organization. "any individual or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organization

stake

an interest in or a share in an undertaking

instrumental value

benefits us indirectly without using any component of the environment; ex: existence value, aesthetic value, bequest value.

stakeholder management capability (SMC)

describes an organization's integration of stakeholder thinking into its processes and it may reside at one of three levels of increasing sophistication: rational, process, transactional

stakeholder inclusiveness

development of loyal relationships with customers, employees, shareholders, and other stakeholders will become one of the most important determinants of commercial viability and business success.

primary social stakeholders

direct stake in the organization and its success and therefore are the most influential

multifiduciary approach

he view that management or specific managers have fiduciary obligations to stakeholders, and not just to shareholders.

mixed-blessing stakeholder

high on both potential for threat and potential for cooperation; the strategy here is to collaborate with them.

subgroups within a generic group

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stakeholder thinking

undergrounds stakeholder management and is the process of always reasoning in stakeholder terms throughout the management process, and especially when organizations' decisions and actions have important implications for other

stakeholder culture categories

1. agency culture 2. corporate egoist 3. instrumentalist 4. moralist 5. altruist

strategic steps toward global stakeholder management

1. governing philosophy 2.values statement 3. measurement system

Nature or legitimacy of a groups stakes

1. institutional owners (trusts, foundations, churches, universities) 2. large mutual fund organizations 3. board of director members who own shares 4. members of management who own shares 5. millions of small, individual shareholders

five key questions

1. who are our organizations stakeholders? 2. what are our stakeholders stake? 3. What opportunities and challenges do our stakeholders present to the firm? 4. what responsibilities does the form have to its stakeholders 5. what strategies or actions should the firm take to best address stakeholder challenges and opportunities

transactional level

highest heal for stakeholder managment—the extent to which managers actually engage in transactions with stakeholders

principles of stakeholder management

intended to provide manages with guiding precepts regarding how stakeholders should be treated.

synthesis approach

it holds that business does have moral responsibilities to stakeholders but that they should not be seen as part of a fiduciary obligation

marginal stakeholder

low on both threat and potential for cooperation; the strategy here of the organization is to monitor them.

managerial view of the firm

major internal and external changes occurred in business and its environment, managers were required to undergo a radical conceptual shift in how they perceived the firm and its multilateral relationships with constituent or stakeholder groups.

stakeholders theory

managerial in the broad sense of the term in that it not only describes or predicts but also recommends attitudes structures, and practices that constitute stakeholder management

four stakeholder types summary

managers should attempt to satisfy minimally the needs of marginal stakeholders and to satisfy maximally the needs of supportive and mixed blessing stakeholders, enhancing the latter's support for the organization

secondary social stakeholders

may also be extremely influential especially in affecting reputation and public standing, stake more indirect

normative value

moral or ethical view because it emphasizes how stakeholders should be treated.

production view of the firm

owners thought of stakeholders as only individuals or groups that supplied resources or bought products or services

descriptive value

provides language and concepts to describe effectively the corporation or organization in inclusive terms.

stakeholder symbiosis

recognizes that all stakeholders depend on each other for their success and financial well-being.

power

refers to the ability or capacity of a stakeholder to produce an effect.

urgency

refers to the degree to which the stakeholder's claim demands immediate attention or response.

Legitimacy

refers to the perceived validity or appropriateness of a stakeholder's claim to a stake.

stakeholders include

shareholders, employees, customers, and other groups as well

transactional level (Level 3)

the communication level which is characterized y communication proactiveness, interactiveness, genuineness, frequency, satisfaction, and resource adequacy

transparency

the concept of stakeholder engagement is relevant to developing what is referred to as naked corporations

engaging on sustainability

the idea in involving stakeholders such as the social media, customers, NGOs, and communicates as early as possible on sustainability developments and initiatives

stakeholder view of the firm

the management must perceive as stakeholders not only those groups that the management thinks have some stake in the firm but also those that themselves think or perceive they have a stake in the firm. This is an essential perspective that the management must take, at least until it has had a chance to weigh carefully the legitimacy of the claims and the power of various stakeholders. Of note is that each stakeholder groups is composed of subgroups; for example, the government, stakeholder group includes federal, state, and local government subgroups as stakeholders.

stakeholder corporation

the ultimate form the stakeholder approach or stakeholder management might take

strategic approach

views stakeholders primarily as factors to be taken into consideration and managed while the firm pursues profits for its shareholders.

stakeholder map

Step 2 in the BSR Five-Step Approach to Stakeholder Engagement. Mapping is an important step to understanding who your key stakeholders are, where they come from, and what they are looking for in relationship to your business.