INSTITUTE OF PUBLIC ADMINISTRATION AND MANAGEMENT

UNIVERSITY OF SIERRA LEONE

TOWER HILL
FREETOWN

FACULTY OF BUSINESS ADMINISTRATION & ENTERPRENEURSHIP

COURSE: BSC IN BUSINESS ADMINISTRATION

YEAR 2

MODULE: ETHICS AND RESPONSIBILITY

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Lecture note 006

GENERIC STAKEHOLDER’S STRATEGIES

Interest in the concept of stakeholders among academics has multiplied in recent years
due to the relevance of stakeholder’s management within the life span of an entity.

Stakeholder theory promotes a practical, efficient and ethical way to manage

organizations in a highly complex, dynamic and competitive environment.

It is efficient because stakeholders that are treated well tend to reciprocate with
positive attitudes and behaviors within the organization.

It is effective because it harnesses the energy of stakeholders towards the fulfillment

of the objectives of the organization.

It is useful in a complex, dynamic and turbulent environment because entities that

manager their stakeholders could have better information upon which they can base
their decisions and because they are attractive to other market participants.

This is due to the importance of those groups or persons without whose support the
entity would cease to operate (Stanford Research Institute)

Hence, they can help or hurt an entity (Miller and Lewis)

Stakeholders’ theory advocates for treating all stakeholders with fairness, honesty
and with generosity.

Stakeholder’s theory indicates the nature of the connection between organizations

and stakeholders.

Any framework which seeks to enhance an organization’s stakeholder management

capabilities must begin with an application of the basic definition. Who are those

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groups or individuals who can affect or are affected by the achievements of an
organization’s purpose?

This involves mapping the stakeholders, providing the detailed list of the specific
groups, organizations, and companies related to each category of stakeholders, and
their corresponding interests.

Freeman (1984) suggests the following review questions to facilitate stakeholder

mapping, which can be applied to specific divisions, operations, or business or
applied issues to specific issues:

• Who are our current and potential stakeholders?

• What are their interests / rights?
• How does each stakeholder affect us (challenges and opportunities)
• How do we affect each stakeholder?
• What assumption does our current strategy make about each important
stakeholder?
• What are the current “environmental variables” that affect us and our
stakeholders?
• How do we measure each of these variables and their impacts on us and our
stakeholders?
• How do we keep score with our stakeholders?

The next step is to analyze the behavior of these stakeholders. This should involve an
investigation of past and future stakeholder actions that could enhance or hinder
corporate goals.

GENERIC STAKEHOLDER’S STRATEGIES

A strategy is a unified, comprehensive, and integrated plan relating to the strategic

advantages of the firm to the challenges of the environment.

It is designed to ensure that the basic objectives of the enterprise are achieved

ü Strategies are the game plan,

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 ü business techniques,
ü methodologies that
ü capitalizes on business opportunities and one which seeks to
ü achieve competitive advantage

FEATURES OF A STRATEGY

ü Strategies are action oriented

ü They are dynamic and flexible in stature
ü Strategies are formulated at top management with inputs from other levels of
the organization.
ü They are tilting and can swivel in a wink.
ü Strategies drive management decisions.
ü Strategies seek to attain a competitive advantage

GENERIC STAKEHOLDERS’ ANALYSIS

Stakeholder Analysis is a tool that focuses on the relative power of stakeholders and
their potential to cooperate or threaten cooperate strategy;

Management therefore, seeks guidance by examining the relative cooperation

potential and relative competitive threat of each stakeholder and classifying these
stakeholders accordingly;

The success or failure of a particular strategic program can be affected by the

stakeholder’s potential for change and its relative power.

RELATIVE COPERATION POTENTIAL

These are persons or group of persons who share a common identity with an
organizational goal. They seek to work for the common interest of the corporation.

Their relative cooperation potential could either be HIGH OR LOW.

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RELATIVE COMPETITIVE THREAT

A relative competitive threat is a competition; rivalry, antagonism, contest OR battle

that has the potential to occur within a corporation.

These are persons or group of persons whose influence and / or interest can cause
serious disruptions on corporate strategy.
Their relative competitive threat could either be HIGH or LOW

(SWING) OFFENSIVE)
Change the rules Exploit
HIGH
COPERATIVE
POTENTIAL
RELATIVE

(DEFENSIVE) (HOLD)
Defend Hold current position
LOW

HIGH LOW

RELATIVE COMPETITIVE
THREAT

ATTENDING TO THESE STAKEHOLDERS WITH THE AID OF DIFFERENT

STRATEGIES

SWING STRATEGIES:

which seek to influence the rules of the game that govern organization- stakeholder
relations should be adopted if a stakeholder group has a relatively high cooperative
potential and competitive threat.

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Examples include changing one or more of the following: the rules, the decision forum,
the kinds of decisions that are being made, or the transaction process.

OFFENSIVE STRATEGIES:

should be adopted if a stakeholder has a relatively high cooperative potential and

relatively low competitive threat, in order to try to bring about the stakeholder’s
cooperative potential.

Offensive strategies include: attempt to change stakeholder’s objectives or

perceptions, to adopt the stakeholder position or to link the program to others that
the stakeholders view more favorably.

DEFENSIVE STRATEGIES:

should be adopted if a stakeholder group has a relatively high competitive threat

and relatively low cooperative potential to prevent competitive threat on the part
of these stakeholders.

Examples include reinforcing current beliefs about the firm, maintaining existing
programs, linking the programs to others that the stakeholder view more favorably
or letting the stakeholder drive the transaction process.

HOLD STRATEGIES:

should be adopted if a stakeholder has a relatively low competitive threat and

competitive potential, in order to continue current strategic programs and maintain
the stakeholder position.

Examples include: doing nothing and monitoring existing programs or reinforcing

current beliefs about the firm.

THANK YOU.