Corporate Communication:

A Guide to Theory & Practice

© Joep Cornelissen
 Chapter 4:
Stakeholder Management and Communication
Overview

• Introduction to the concept of stakeholders

• Overview of models used by organizations for
communicating and collaborating with stakeholders
Stakeholder initiatives

• Range of schemes and initiatives

have developed at industry, national and transnational level
• UN Global Compact Initiative
• Global Reporting Initiative
• World Bank’s Business Partners for Development
• OECD’s Guidelines for Multinational Companies
Stakeholder management

• Neo-classical theory:
• purpose of organizations is to make profits
• accountable to themselves and shareholders
• Socio-economic theory:
• other groups besides shareholders count
• accountability extends to groups considered to be important for
the continuity of the organization and the welfare of society
Neo-classic model

Investors

Suppliers Customers
ORGANIZATION

Employees
Stakeholder model

Governments Investors Political Groups

Suppliers ORGANIZATION Customers

Trade Employees Communities

Associations
The nature of stakes and stakeholders

• Stakeholder: any group or individual who can affect or is

affected by the achievement of the organization’s purpose and
objectives (Freeman, 1984)
• Stake: ‘an interest or a share in an undertaking, [that] can range
from simply an interest in an undertaking at one extreme to a
legal claim of ownership at the other extreme’ (Carroll, A.B.,
1996)
Types of stakes
Types of stakes Description Example

Equity stakes Held by those Shareholders, directors,

with direct minority interest owners
ownership

Economic or Those who have Employees, customers,

market stakes an economic suppliers, competitors
interest, but not
an ownership
interest
Influencer stakes Neither equity or Consumer advocates,
economic stake environmental groups,
but have trade organizations,
interests government agencies

(Freeman, 1984)
Types of stakeholders
Type of Description Example
stakeholder

Primary Without their continued Employees

Stakeholder participation the organization Suppliers
cannot survive Consumers

Secondary Can generally influence or Media

Stakeholder affect, or are influenced or Special interest
affected by the organization groups
but are not engaged in
financial transactions
Do have a moral/normative
interest
Capacity to mobilize public
opinion for or again
organization
Alternative stakeholder
conceptualization
Contractual Community stakeholders
stakeholders

Customers Consumers

Employees Regulators

Distributors Government

Suppliers Media

Shareholders Local communities

Lenders Pressure groups

Clarkham, 1992
Benefits of stakeholder model

• To be a good citizen as an end in itself

• Employee morale
• Reputation of organization
CSR initiatives

• Direct outcome of shift in models

• Includes philanthropy, community involvement, ethical and
environmentally friendly business practices
• Recognizes business needs to deliver wider societal value
beyond shareholder/market value alone
Basic stakeholder identification
analysis
1. Who are the organization’s stakeholders?

2. What are their stakes?

3. What opportunities and challenges are presented to the

organization in relation to these stakeholders?

4. What responsibilities (economic, legal, ethical, and

philanthropic) does the organization have to all its
stakeholders?

5. In what way can the organization best communicate with

and respond to these stakeholders and address these
stakeholder challenges and opportunities?
Stakeholder salience model
POWER LEGITIMACY

Dormant
stakeholder Dominant Discretionary
stakeholder stakeholder

Definitive
stakeholder

Dangerous Dependent
stakeholder stakeholder

Non-stakeholder

Demanding
stakeholder
URGENCY
Stakeholder communication:
From awareness to commitment
Organization–stakeholder
communication models
Informational strategy: one-way symmetrical model of communication

ORGANIZATION STAKEHOLDER

Persuasive strategy: two-way asymmetrical model of communication

ORGANIZATION STAKEHOLDER

Feedback

Dialogue strategy: two-way symmetrical model of communication

ORGANIZATION STAKEHOLDER
Characteristics of the ‘old’ and ‘new’ approaches to
organization–stakeholder relationships
Collaboration and engagement

• Focus on changing the relationship between the

organization and its stakeholders from ‘management’ to
‘collaboration’ and from ‘exchange’ to ‘long-term
relationships’
• 'Collaboration’ implies a two-way symmetrical model of
dialogue and consultation