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MGB 310 Stakeholder Analysis
96
Stakeholder Analysis and Management for Guayaki
Created by Consulting Co.
Morgan Barker N8886024
for Guayaki
Contents
Contents
- Environmental Issue
- Stakeholder Theory
- Identification of Stakeholders
- Management Strategies
- Recommendation
Guayaki's Issue
Issue
Guayaki has seen vast growth in it's demand and market share. This growth has put a strain on its supply and meeting its mission statement. Guayaki would like to investigate potention solutions for a sustainable future of both the Environment and Guayaki.
Purchasing Land
Purchasing land solves many of the growth issues Guayaki is facing. However it does present the business with several environmental and ethical dilemmas.
Guayaki is currently addressing it's sustainability well. Looking to future proof it's supply and remain on mission.
The large purchase and upscaling of production could put strain on the social mission, questioning the sustainability without industrialisation.
The Theory
Understanding what theories apply
The Theory
WHAT is Stakeholder Theory?
A theory of how businesses owe responsibility to shareholders and all other stakeholders effected
WHAT is Stakeholder Theory?
"Stakeholder theory is a theory of organizational management and ethics." Phillips, R., Freeman, R. and Wicks, A. (2003). What Stakeholder Theory is Not. Business Ethics Quarterly, 13(04), p.481.
What is a Stakeholder?
A Stakeholder is anyone affected by the operation of a business
What is a Stakeholder?
Stakeholders are those persons or organisations that have, or claim to have an interest or share in the project undertaking” in Cleland (1989, p. 31)
What is Stakeholder Analysis?
Tool used by managers to identify
- Behaviours
- Interests
- Relationships
- Intentions
of Stakeholders
We analyse to better understand the potential of influence Stakeholders have over decision making processes.
Varvasovszky, 2000
What is Stakeholder Engagement
Stakeholder engagement describes a goal of a more equitable and sustainable social development by giving those who have a right to be heard the opportunity to be considered in decision-making processes.
Krick T, Forstater T, Monaghan P & Silanpää M (2005)
Applying the theory to Guayaki
Using peer reviewed models to plan strategically and differentiate Stakeholders
Applying the theory to Guayaki
Stakeholder Identification
External Stakeholders
- Competitors
- Media
Stakeholder Identification
Local Community
- Local Population
- Employees
- Local Industry
Primary Stakeholders
- Employees
- Customers
- Shareholders
- Suppliers
- Government (Foreign Business Agency)
- Environmentalists
- Certifying Agencies
Salience Model
Salience Model
1. Media
2. Competitors
3. -
4. Locals, Shareholders
5. Environmentalists
6. Employees
7. Government (Foreign Business Agency)
Mitchell et al. (1997, p.864) noted that some Stakeholder definitions ignore Urgency.
Urgency, the degree to which a stakeholder claims call for immediate attention.
Employees and Local Population
The Employees and Local Population have several salient attributes including LEGITIMACY for their direct involvement to running the supply end of the business and the impact the business and mission will have on their lives.
They have POWER as they are the ones toiling and creating one of the upper vertical supply links.
The degree of URGENCY is relevant to how each decision can immediately impact their liviable income and immediate geographical surroundings. This is also complemented by the fact that Guayaki's social mission statement bedrock was to contribute to the health of the culture and sustenance of indigenous peoples.
Power vs Interest Grid
Employees +/-
Environmentalists
+/-
Consumers +/-
Competitors -
Media +/-
- Each unique stakeholder posesses differing Power and Interest
- Addressing them in different strategic ways is recommended
Power vs Interest Grid
Government -
Eden & Ackermann 1998, 122
Ackermann & Eden 2011, 183
Attitudes
The Brazillian Governent (Foreign Business Agency) has shown resistance to newcoming foreign businesses. With bureaucratic hurdles and high taxation.
The Brazillian Local Population including employees have a positive attitude towards the business and employement. But the trust building and social responsibilty is paramount to maintaining positive attitude.
Power
Ultimately Guayaki's commitment to its mission left a lot of power in the hands of the locals and employees.
The Foreign Business Agency is able to control land ownership and taxation.
The Media has the power to control the Guayaki brand reputation.
Key Stakeholders
The applied Models concur that the relevant key Stakeholders for this issue are;
- Employees
- Locals
- Government (Foreign Business Agency)
- Consumers
Strengths and Limitations of Models Applied
- Stakeholders were narrowed down from large selection
- Salience model used to determine who and what counts, as well as some behaviours exhibited
- It is limited by being human perception and not objective
- Power vs Attitude grid was used to determine possible priorities
- The grid did not provide identification of postive and negative attiudes without modification
Agle, Mitchell and Sonnenfeld, (1999)
Determing Strategies
Determining Strategies
Awareness
Making this large purchase will attract attention from many different stakeholders.
Stakeholder Engagement is;
- Proactive
- Relationship based
- Long term focused
- Cyclical Process
- Focus on both negative and positive attitudes
- Partnerships with Stakeholders
- 'Bridging'
Relationships already built and can be expanded upon. Using supporting foundations to bridge gaps in language and culture
Stakeholder Prioritisation
Influence vs Dependence
Guayaki places its social responsibilty as a high priority. Along with the hurdle of Foreign Business Agency, they must be addressed as a high priority.
Stakeholder Prioritisation
Consumers buy into the sustainablity of Guayaki but only require to be kept informed through media and advertising
Employees and Locals have an increased influence over that of other businesses. As such they will be treated fairly but also engaged in developing sustainable soloutions
How Guayaki Currently Manages Stakeholders
Guayaki has been very open with it's social responsibility policies. The business along with its marketplace is built on transparency and trust from raw ingredients supply to the customer.
Guayaki has built reputable relationships with several certifiers from the organic and environmental backgrounds. As well as foundations in the countries of mate origins.
Strategies
Even with the increased demand for Guayaki, the sustainable mission can not be lost. The key Stakeholders need to be engaged.
IAP2 Engagement Spectrum
In keeping with Guayaki's mission. It should collaborate with locals and employees to understand how such a large supply could be sustainably grown and harvested without endangering culture or environment.
The Foreign Business Agency should be consulted along the journey to offer analysis, alternatives, issues and/ or decisions
De Leiuen and Arthure, (2016)
Recommendation
Perform Engagement mechanisms
Hold monthly meetings for the strategic threat/opportunity Stakeholders (Employees, Locals)
Maintaining the bedrock mission is vital and needs indeginous support to scale quickly with Guayaki's supply demands
Consult the (Foreign Business Agency) upon any land purchase, infrastructure, or investment
Remain transaparent to all Stakeholders along the chain
Phillipson, Lowe, Proctor & Ruto, (2012)
Benefits
Benefits of Collaboration and Consulting
- Increases capacity of community to achieve a goal
- Better understanding of cultural norms
- Improved relationships
- Following Regulations
- May offer new view points
Wieters, (2015)
Conclusion
Guayaki is faced with a potential shortfall in supply in relation to its growth in demand.
The key Stakeholders have been identified based on their power/interest and opportunity level.
With potential for collaboration a real opportunity emerges to create a sustainable supply to meet future demands and protect indegenous people and environment. Thus staying true to the company goals.
This strategy involves engaging with local community and employees monthly to solve issues moving forward.
Reference List
References
Agle, B., Mitchell, R., & Sonnenfeld, J. (1999). WHO MATTERS TO CEOS? AN INVESTIGATION OF STAKEHOLDER ATTRIBUTES AND SALIENCE,CORPATE PERFORMANCE, AND CEO VALUES. Academy Of Management Journal, 42(5), 507-525. http://dx.doi.org/10.2307/256973
De Leiuen, C., & Arthure, S. (2016). Collaboration on Whose Terms? Using the IAP2 Community Engagement Model for Archaeology in Kapunda, South Australia. Journal Of Community Archaeology & Heritage, 3(2), 81-98. http://dx.doi.org/10.1080/20518196.2016.1154735
Phillips, R., Freeman, R., & Wicks, A. (2003). What Stakeholder Theory is Not. Business Ethics Quarterly, 13(04), 481. http://dx.doi.org/10.5840/beq200313434
Phillipson, J., Lowe, P., Proctor, A., & Ruto, E. (2012). Stakeholder engagement and knowledge exchange in environmental research. Journal Of Environmental Management, 95(1), 56-65. http://dx.doi.org/10.1016/j.jenvman.2011.10.005
Varvasovszky, Z. (2000). A stakeholder analysis. Health Policy And Planning, 15(3), 338-345. http://dx.doi.org/10.1093/heapol/15.3.338
Wieters, K. (2015). Review: Beyond Consensus: Improving Collaborative Planning and ManagementMargerumRichard D.2011. Beyond Consensus: Improving Collaborative Planning and Management. Cambridge, MA: MIT Press. 395 pp. $27.00 (paperback). ISBN 978-0-262-51621-1. Journal Of Planning Education And Research, 35(4), 518-519. http://dx.doi.org/10.1177/0739456x15602077