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STAKEHOLDER MANAGEMENT

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Georgiana Grigore

on 16 October 2012

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Transcript of STAKEHOLDER MANAGEMENT

STAKEHOLDER MANAGEMENT and
COMMUNICATIONS AIMS To understand the importance of stakeholder management in Corporate Communications
planning and management;

To define audiences, publics and stakeholders;

To establish what is public opinion: both on the domestic and international level. Stakeholder theory
Stakeholder model
Stakeholder typologies
Relations with different groups of stakeholders Definition of publics
Masses
Audience
Public opinion
Typology of publics and audiences Stakeholder management planning Publics “Public relations is the
management
of communication between
organizations and publics" “PR is the management function that establishes and maintains mutually beneficial relationship between an organization and the publics on whom success or failure in depends” “Communication with various publics” PR
definitions (Grunig and Hunt, 1984) (Kitchen, 1997) (Cutlip et al., 2000) Le Bon, G., 1896,The Crowd: A Study of the Popular Mind.
Ortega y Gasset, J., 1930, The Revolt of the Masses.
Blumer H., 1939, The mass, the public, and public opinion. Provided the first framework that offered exemplification of mass as a separate market category – large, heterogeneous, and dispersed –
all those observations were based on news and entertainment production – associated at that
time with something pejorative – a modern
condition for a popular taste and mass culture. - presented elitist view “There are no masses only ways of seeing people as masses” (Raymond Williams) Masses the concept related to writings of the following authors Audience The early use of today’s concept of media audience lies in theatrical and musical performances as well as games and performances of ancient times The origin... Graeco-Roman audience can be characterised by: Planned and organized viewing and listening Public and popular
character Secular
content Voluntary act
of participation Specialization
of actors Locatedness
of performance The world ‘audience’ is very familiar as the collective term for the ‘receivers’ in the simple sequential model of the mass communication process (source, channel, message, receiver effect). (Schramm et al, 1955) Audience as market... “aggregate of actual or potential consumers of media services and products, with a known social-economic profile”. Audience as market Characteristics of A) members are individual consumers; B) boundaries are based on economic criteria; C) lack of relationship between members; D) no shared
identity; E) temporary formation; F) public significance not recognized. Publics Masses Audience Typology (cc) photo by theaucitron on Flickr Typology of audiences Nightingale (2003) offers a typology of audiences’ diversity ‘the people assembled’ Audience as spectators Audience as ‘the people addressed’ Referring to the group of people imagined by the communicator
and for whom the content is shaped. Audience as ‘happening’ Experience of reception Audience as ‘hearing’ or ‘audition’ Participatory audience
experience. The key categories PR and publics Grunig and Hunt’s (1984) situational theory of publics Latent publics Groups that face particular problem as a result of an organization’s action, but fail to recognize it. Aware publics Groups that recognize
that a problem exists. Active publics Groups that organize to discuss and do something about the problem. typology of publics Chay-Nemeth’s
(2001) Circumscribed
publics is highly dependant on others for resources; they may evolve into other category of publics as a result of changing circumstances. Co-opted
publics behaves within limits prescribed by powerful others and hence has access to resources. Critical
publics Dissatisfied with status quo.
They face constrains such as dependency or competition.
They seek for redistribution of resources and expansion of their discourse in society. Circumventing publics They consciously or unconsciously engage in behaviours considered as deviant; it is a result of economic condition they have to live in. They have only little legitimacy to speak for themselves. Publics Contemporary views Concentrate on power relations
between organizations and publics Ethical PR should empower the “silent and disempowered publics” Publics are part of a political space, where exchange of material resources and discourse takes place » this is important to archive or maintain social and political status quo. Publics are not senders and receivers of messages » producers and reproducers of meanings. Public opinion International
public opinion Definition As an abstract Collective view, emerging through rational discussion of issues in the populations. As an aggregate view The sum total of individual opinions of the populations governed by democratic state. (Pieczka, 1996) Public opinion is... “a consensus, which emerges over time from all the expressed views that cluster around the issue and the debate, and that this consensus exercises power.” (Cutlip et al, 1985, 1994) Davison W.P. (1973) suggested that there are three prerequisites to an international public opinion to become important factor in decision making process: “people in several countries must give their attention to a given issue; they must have sufficient means of interacting so that common and mutually reinforcing mechanism can form; there must be some mechanism through which shared attitudes can be transmitted into action”. Globalisation Stakeholder theory First mentioned in Johnson’s (1971) definition of social responsibility A company has the capacity to balance out a multitude of interests; not only looking for profit,
but also for the value delivered to the employees, suppliers, local communities and society. Adopted in PR in 1980s during the American
debate on corporate governance Neo-classical
perspective Socio-economical
perspective What is a STAKEHOLDER ? S
T
A
K
E Definition Freeman (1984)
“Strategic Management: A Stakeholder Approach” „those groups without whose support the organization would cease
to exist” (p. 31) „any group or individual who is affected or which can influence the fulfillment of an organization’s objectives” (p. 46). “Stakeholders are those who have an interest in a particular organization; they depend on organization to fulfil they own goals and on whom, in turn, the organizations depends.” Johnson and Scholes (2002)
are considered to be the stakeholders of a
company if they meet one of the following criteria Individuals or groups (1) when they are positively or negatively affected by the activity of a company or when they are preoccupied by the company’s impact on their individual or other groups well-being (2) when they can supply or acquire the essential resources for a company`s activities (3) when they are valued by the organizational culture Carroll and Buchholtz, 2008 How would you explain the concepts of stake and stakeholder from your perspective as an individual? What kinds of stakes do you have? STAKEHOLDER Models Investors, suppliers and employees are seen as contributing towards the firm for the benefit of the customers. There is competition between all elements
in this system. The firm is the power centre and the other
parties are dependant. Donaldson and Preston, 1995 Organization is seen as a part of a larger system that includes market and non-market parties. Accountability is understood not through the risk taking and profit making (instrumental approach), but in a normative ways - individual rights, moral issues, social contracts. Organizations activities must provide legitimatization in a larger social context for all parties. Freeman, 1984 Carroll and Buchholtz, 2008 Stakeholder Classification Clarkson (1995) Voluntary
stakeholders Involuntary
stakeholders They choose to collaborate with a company.
Includes shareholders, investors, employees, managers, consumers and suppliers. They do not have the freedom to choose in favor of a relationship with a company nor they can avoid the relationship with it.
Includes: individuals, local communities, the environment or the future generations Henriques and Sadorsky
(1996, 1999) Primary
stakeholders Secondary
stakeholders They have an active role in the survival, profitability and growth of the company. They have a formal, contractual relation with a company and may influence to great extent its activity (employees, shareholders, suppliers, consumers). They are not involved in a relationship with a company and they are not essential for its survival, but they are affected by it or they can affect it (competitors, media, interest groups, non-governmental organizations). Wheeler and Sillanpaa
(1997) Primary social stakeholders Shareholders and investors
Employees and managers
Consumers
Local communities
Suppliers and other partners Secondary social stakeholders Primary non-social stakeholders Secondary non-social stakeholders Government
Social pressure groups
Civic institutions
Trade bodies
Media and the academic environment
Competitors Natural environment
Future generations Groups that protect the environment
Organizations that protect animals Mitchell et al.
(1997) Managing relations with STAKEHOLDERS Sales promotion Personal selling Advertising Communication approach Van Riel and Ch. J. Fombrum (2007) offer
categorization of stakeholders based on
departments addressing certain, selected
problems: Internal
Communication Main functions of internal directed stakeholder management according to (Krone et al., 2002): disseminate information about corporate activity Efficiency Shared meaning to build shared understanding among
employees about corporate goals Connectivity build relationship between different people and their activities Satisfaction improvement of job satisfaction amongst employees. Investor Relations Government
relations “management of often complex external relations between the organization and array of governmental and non-govermental stakeholders”. (Harris and Moss, 2001) Regulatory and legislative
bodies Local councils,
Federal Drug Administration
Association of Pharmaceutical Industry
Medicine and Healthcare Products Regulatory Agency
Environment Agency
Department for Business Enterprise and Regulatory Reform Customer
relations Maketing
PR Customers recognised as a
separate stakeholder group word-of-mouth especially at the time of, so called, experience marketing PR and Issues Management Van Riel (2007) claims that the general public is the most diffuse stakeholder group that companies address. the public seldom speaks
irectly to the companies it has diverse set of interest…hence the role of PR and issue management is considered as an “early warning system” based in on three principles: 1) early detection of issues 2)marshalling of internal resources 3)implementation of an issue
management strategy STAKEHOLDER segmentation van Raaij and Verhallen (1990) Mohr et. al (2001) Precontemplators They do not base their purchasing decisions on social responsibility attributes, but on quality, price and convenience. Contemplators They consider aspects related to social responsibility, but this does not influence the purchasing behavior. Action groups They have strong conviction regarding corporate social responsibility, having high knowledge in this sense and a behavior according to these principles Supporters They are the customers with responsible behavior who, when purchasing products or services, take into account social and environmental aspects. Stakeholder segmentation in terms of their CSR interest In-depth interviews with customers in order to determine the most important factors which determine the intention of buying - a model of segmentation for this group of stakeholders. Hillenbrand and Money (2009) Stakeholders with holistic expectations This category is similar to the ones of the “supporters” in the study of Mohr et al. (2001). They have a complex vision over social responsibility and consider the researched aspects equally important: financial success, ethic behavior, elimination of the negative impact on society, ethic investment and support of local communities. Stakeholders with relationship expectations They are a combination of the “contemplators” and the “action groups” in the study of Mohr et al. (2001).
They present the following characteristics: they are more interested in the impact of social responsibility on financial performance and the way this reflects on the relationship with people and society at large.
Costumers in this segment have little interest in local communities, and employees have little interest in ethic investment. Stakeholders with financial expectations This category is similar to the “precontemplators” in the research of Mohr et. al (2001). They have little interest in the social responsibility field, being concerned only with the financial aspect.
Customers in this segment are not concerned with aspects regarding ethic investment, and the employees show moderate concern referring to the ethic behavior towards all people. management planning STAKEHOLDER (cc) image by nuonsolarteam on Flickr Identifying different
types of publics Stage 1 Stage 2 Selecting key
publics Stage 2 Analysing publics stages of publics development
establishing relationship to an organization
media consumption
demographics
personal preferences
address existing stereotypes
think of the research program to better understand your publics
present your findings. Smith, 2004 1. Who are our stakeholders?
2. What are our stakeholders’ stakes?
3. What opportunities and challenges do our stakeholders present to our firm?
4. What responsibilities (economic, legal, ethical, and philanthropic) does our firm have to its stakeholders?
5. What strategies or actions should our firm take to best manage stakeholder challenges and opportunities? Carroll and Buchholtz, 2008
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