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Stakeholder And Issues

Management Approaches

Chapter Topics

1. Why use a stakeholder management approach for

business ethics?

2. Stakeholder management approach defined

3. How to execute a stakeholder analysis

4. Stakeholder approach and ethical reasoning

5. Moral responsibilities of functional area

professionals

6. Three issues management approaches

7. Two crisis management approaches

• The ethical dimension of this approach is

based on the view that:

• Profit maximization is constrained by justice
• Regard for individual rights should be extended to all

constituencies that have a stake in the affairs of a

business

• Organizations are not simply or only economic in

nature but can and do act in socially responsible

ways, not only because it is the right thing to do, but

also to ensure their legitimacy

Stakeholder Management Approach

Defined

• The stakeholder approach provides a framework that

enables users to map and ideally, manage the

corporation’s relationships, both present and potential,

with groups to reach win-win collaborative outcomes.

• It does not have to result from a crisis or controversial

situation.

• It can be used as a planning method to anticipate and

facilitate business decisions, events, and policy

outcomes.

• Business units, teams, and groups can use this approach.

How To Execute A Stakeholder

Analysis

• The stakeholder approach is a pragmatic way of identifying and understanding multiple, often competing, political, social, legal, economic, and moral claims of many constituencies.
• The stakeholder analysis is a series of steps aimed at the following tasks:
• Mapping stakeholder relationships
• Mapping stakeholder coalitions
• Assessing the nature of each stakeholder’s interest
• Assessing the nature of each stakeholder’s power
• Constructing a matrix of stakeholder moral responsibilities
• Developing specific strategies and tactics
• Monitoring shifting coalitions

Stakeholder Approach And Ethical

Reasoning

• The stakeholder analysis is an analytical method where no prescribed ethical principles or responsibility rules are built- in.
• Ethical reasoning in the stakeholder analysis means asking:
  • What is equitable, just, fair, and good for those who affect and are affected by business decisions?
  • Who are the weaker stakeholders in terms of power and influence?
  • Who can, who will, and who should help weaker stakeholders make their voices heard and encourage their participation in the decision process and outcomes?

Moral Responsibilities Of

Functional Area Professionals

• Traditional functional and

expert areas include:

• Marketing
• Research and development (R& D)
• Manufacturing
• Public relations
• Human resource management (HRM)

Three Issues Management

Approaches

• First Approach: 6-Step Issue Management Process

• Most straightforward
• More appropriate for companies or groups trying to understand, manage, and control their internal environments
• Involves the following steps:
  • Environmental scanning and issues identification
  • Issues analysis
  • Issues ranking and prioritizing
  • Issues resolution strategizing
  • Issues response and implementation
  • Issues evaluation and monitoring

Three Issues Management

Approaches

• Third Approach: 4-Stage Issue Life Cycle

– Thomas Marx observed that issues evolve from

social expectations to social control through the

following steps:

• Social expectations
• Political issues
• Legislation
• Social control

Two Crisis Management

Approaches

• First Approach: Precrisis Through Resolution

• According to this model, a crisis consists of four

stages:

• Prodromal (precrisis)
  • Warning stage
• Acute
  • Damage has been done
• Chronic
  • Clean-up phase
• Resolved
  • The crisis management goal

Two Crisis Management

Approaches

• Suggestions that corporations can follow to respond

more effectively to crises include:

• Face the problem
• Take your lumps
• Recognize that there is no such thing as a secret or private crisis
• Stage war games
• Use the firm’s philosophy, motto, or mission statement
• Use the firm’s closeness to customers and end users for early feedback

Two Crisis Management

Approaches

• Issues and crisis management methods and

preventive techniques are effective in

corporations only if:

– Top management is supportive and participates

– Involvement is cross-departmental

– The issues management unit fits with the firm’s

culture

– Output, instead of process, is the focus