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.
One goal of a stakeholder analysis is to encourage and
prepare organizational managers to articulate their own
moral responsibility, as well as the responsibilities of
the company and their profession, toward their
different constituencies.
Stakeholder analysis focuses the enterprise’s attention
and moral decision-making process on external events.
This approach applies internally, especially to individual
managers in and across traditional function areas.
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?

Copyright © 2003 by South-Western, a

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division of Thomson Learning
 How To Execute A Stakeholder Analysis
• 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
Copyright © 2003 by South-Western, a
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division of Thomson Learning
 1-Mapping stakeholder relationships

• Edward Free man questions Fig.2.1 pg 36

• Share holder Map of Large Organization Fig
2.2 pg 37
• Shareholder’s Map for Microsoft Fig. 2.3 pg 38
In 1984,Edward Freeman offered questions to help begin the analysis & identify major
stakeholdersFig. 2.1 pg 36
 2- Mapping Stakeholders Coalitions

• Map any coalitions among and between

stakeholders
• interest groups n lobbyists join forces against
common enemy.
• In Microsoft case
– State Attorneys General formed coalitions against
MS, competitors may also join
3- Assessing Nature of Each Stakeholder’s Interest

• Identify • For Microsoft

– Supporters (active, non- • Supporters
active, uncommitted) – Shareholders
– Active Opposition – Employees
Use Fig. 2.4 pg 40
• Active Opposition
• Government
• Competitors like
spyglass, Netscape
 4- Assessing Each Stakeholder’s Power
• This step helps in identifying and assessing strategic
assumptions of different groups and power of their stakes and
articulate strategies regarding their issues with the firm fig.
2.5 pg 41
• Three types of powers stakeholders can use
– Voting Power: owners & shareholders can vote their
choices to affect firm decision
– Political Power: Govt. can originate new cases
– Economic Power: Consumers can boycott MS products
e.g MS CEO may meet lobbyists to neutralize them, learn
about their grievances, negotiate demands, avoid negative
press coverage
 5- Identify Stakeholders ethics & Moral
Responsibilities
• CEOs responsibility to Owners(stake holders)
– Economic: prevent costly lawsuits
– Legal: protect personal liability and damage. Do
out of court settlement
– Ethical: keep them current about strategies n
decisions
– Voluntarily: advise them to show responsibilities
Fig. 2.6 pg 42. complete grid for all stake holders
 6-Develop Strategies & Tactics for each
stakeholder
Decide whether
1. to approach each stakeholder directly or indirectly
2. To do Nothing, Monitor OR take
offensive/defensive position
3. To accommodate, negotiate, manipulate, resist,
avoid OR wait & see with specific share holder
4. What combination of strategies you want to
employ with each stakeholder
Check fig.2.7 & 2.8 pg 43,45
Read Microsoft example pg 44,46
 7- Monitoring Shifting Coalitions
• Time & events change the stakes so monitor the
evolution of issues and actions of stakeholders
• Sources of Change are
– Media exposure,
– Politics
– Economics
– Legal actions
– Public reactions
Tract the trends and modify your strategies