Chapter3. The Stakeholder Approach to Business, Society, and Ethics. Prepared by Deborah Baker Texas Christian University

Transcription

1 The Stakeholder Approach to Business, Society, and Ethics Chapter3 Prepared by Deborah Baker Texas Christian University Business and Society: Ethics and Stakeholder Management, 7e Carroll & Buchholtz Copyright 2009 by South-Western, a division of Cengage Learning. All rights reserved 1

2 Quote of the Day A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it. - Max Planck 2

3 Extra Credit Hands on Portland Movies (Web Page) 3

4 Introduction to Chapter 3 Stakeholders Individuals and groups with a multitude of interests, expectations, and demands as to what business should provide to accommodate people s lives and lifestyles 4

5 Origins of the Stakeholder Concept Stake An interest or a share in an undertaking and can be categorized as: An Interest A Right Ownership Legal Right Moral Right 5

6 Origins of the Stakeholder Concept Stakeholder An individual or a group that has one or more of the various kinds of stakes in the organization 6

7 Who Are Business Stakeholders? Stockholders Employees Customers Community Competitors Business Stakeholder Groups Suppliers Special-Interest Groups Media Society General Public 7

8 DuPont s Stakeholder Groups Shareholders Customers Employees Society 8

9 Evolution of the Business Enterprise Production View Managerial View Stakeholder View 9

10 Social Stakeholders Primary social stakeholders Secondary social stakeholders Shareholders and investors Employees and managers Customers Local communities Suppliers and other business partners Government and regulators Civic institutions Social pressure groups Media and academic commentators Trade bodies Competitors 10

11 Production and Managerial Views of the Firm Figure

12 Nonsocial Stakeholders Primary nonsocial stakeholders Secondary nonsocial stakeholders Natural environment Future generations Environmental interest groups Animal welfare organizations Nonhuman species 12

13 Core, Strategic, and Environmental Stakeholders Core stakeholders are essential for the survival of the firm Strategic stakeholders are vital to the organization s success and the threats and opportunities the organization faces Environmental stakeholders are all others in the organization's environment that are not core or strategic 13

14 Stakeholder Typology 14

15 A Typology of Stakeholder Attributes Legitimacy refers to the perceived validity or appropriateness of the stakeholder s claim to a stake 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 15

16 The Stakeholder View of the Firm Figure

17 Strategic, Multifiduciary, and Synthesis Views Strategic Approach views stakeholders primarily as factors managers should manage in pursuit of shareholder profits Multifiduciary Approach views stakeholders as a group to which management has a fiduciary responsibility Stakeholder Synthesis Approach considers stakeholders as a group to whom management owes an ethical, but not a fiduciary obligation 17

18 Key Questions In Stakeholder Management 1. Who are our stakeholders? 2. What are our stakeholders stakes? 3. What opportunities and challenges do our stakeholders present to the firm? 4. What economic, legal, ethical, and philanthropic responsibilities does the firm have to its stakeholders? 5. What strategies or actions should the firm take to best address stakeholder challenges and opportunities? 18

19 Who Are Our Stakeholders? Figure

20 What Are Our Stakeholders Stakes? Identify the nature/legitimacy of a group s stakes Identify the power of a group s stakes Identify specific groups within a generic group 20

21 What Strategies or Actions Should Management Take? Do we deal directly or indirectly with stakeholders? Do we take the offense or the defense in dealing with stakeholders? Do we accommodate, negotiate, manipulate or resist stakeholder overtures? Do we employ a combination of the above strategies or pursue a singular course of action? 21

22 Diagnostic Typology of Organizational Stakeholders Stakeholder s Potential for Threat to Organization High Low Stakeholder s Potential for Cooperation with Organization Figure 3-9 High Low Stakeholder Type Mixed Blessing Strategy: Collaborate Stakeholder Type Nonsupportive Strategy: Defend? Stakeholder Type Supportive Strategy: Involve Stakeholder Type Marginal Strategy: Monitor 22

23 Summary of Four Stakeholder Types 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. 23

24 Stakeholder Management Capability Transactional level Process Level Rational Level 24

25 Stakeholder Engagement Stakeholder Engagement An approach by which companies implement the transactional level of strategic management capability 25

26 Principles of Stakeholder Management Key Words Acknowledge Monitor Listen Communicate Adopt Recognize Work Avoid Acknowledge conflicts 26

27 Principles of Stakeholder Management Figure

28 Strategic Steps Toward Successful Stakeholder Management 1. Governing Philosophy. Integrate stakeholder management into the firm s governing philosophy. 2. Values Statement. Create a stakeholder-inclusive values statement. 3. Measurement System. Implement a stakeholder performance measurement system. 28

29 Key Indicators of Successful Stakeholder Management Survival Avoided costs Continued acceptance and use Expanded recognition and adoption 29