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Stakeholder management


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Unformatted text preview: STAKEHOLDER STAKEHOLDER MANAGEMENT Stakeholders Any group or individual who can affect or is affected by the achievement of the organization’s objectives. (Thompson, 1967) (Thompson, Primary Stakeholders Primary Stockholders Employees Wholesalers Retailers Customers CORPORATION MA R Suppliers Competitors Creditors KE T Secondary Stakeholders General Public Foreign Governments Fed, State, Local Government CORPORATION Business & Support Groups Media NO NM AR KE T Social Activist Groups Local Communities General Public Fed, State, Local Government Stockholders Employees Foreign Governments Wholesalers Retailers CORPORATION Customers Business & Support Groups Communities Competitors Media Creditors Social Activist Groups Local Communities Stakeholder Theory “Stakeholder theory suggests that Stakeholder companies are beholden not just to stockholders – but also to suppliers, customers, employees, community members, even social activists. Things have become a lot more interdependent. There are a broader range of constituents.” (Nardelli, CEO of Home Depot, 2005) (Nardelli, Stakeholder Attributes Stakeholder Attributes Power Legitimacy Urgency Social Capital Social Capital An asset that resides in relationships and is characterized by mutual goals and trust Facilitates smooth internal and external transactions and processes A Changing World A Changing World “We thought we could sit in Bentonville We Arkansas, take care of customers, take care of associates—and the world would leave us alone. It doesn’t work that way anymore.” anymore.” (WalMart CEO Lee Scott) Your manager is being transferred to another division of the company in early January. He calls a meeting in early November and asks that every department head delay processing all invoices until after January 1. He wants to keep expenses low and revenues high so that his last quarter in your area shows maximum revenue. What do you do? What You’re an employment counselor at a large outplacement firm. Your company is currently negotiating with Black Company to provide outplacement services to 500 employees who are about to lose their jobs as the result of a layoff. Your neighbor and good friend is a reporter for the local newspaper, who mentions to you over coffee one Saturday that she’s writing a story about Black Company. According to her sources, 1,500 employees are about to lose their jobs. You know her numbers are incorrect. Should you tell her? her You work for Red Co. You and a colleague, Pat Brown, are asked by your manager to attend a week-long conference in Los Angeles. At least 25 other employees from Red Co. are attending, as well as many customers and competitors from other institutions. At the conference, you attend every session and see many of the Red Co. people, but you never run into Pat. Although you've left several phone messages for her, her schedule doesn't appear to allow room for a meeting. However, when you get back to the office, the department secretary, who's coordinating expense reports, mentions to you that your dinner in L.A. must have been quite the affair. When you ask, "What dinner?", she describes a dinner with 20 customers and Red Co. employees that Pat paid for at a posh L.A. restaurant. When you explain that you didn't attend, she shows you the expense report with your name prominently listed as one of the attendees. What do you do? Your daughter is applying to a prestigious university. Since admission to the school is difficult, your daughter has planned the process carefully. She has consistently achieved high marks, taken preparatory courses for entrance exams, and has participated in various extracurricular activities. When you tell one of your best customers about her activities, he offers to write her a letter of recommendation. He's an alumnus of the school and is one of its most active fund raisers. Although he's a customer, you also regularly play golf together and you and your spouses have socialized together on occasion. What do you do? What CRISIS MANAGEMENT CRISIS MANAGEMENT Crisis: high-impact event with ambiguity and short response time Response Strategies to Response Strategies to Crisis Management Reactive Defensive Accommodative Deny responsibility Doing less than required Doing the least that is required Doing all that is required Admit responsibility, but fight it Accept responsibility Proactive Organization and environment are changing and there is an effort to adjust to one another’s needs Anticipate responsibility Doing more than is required Planning for Crisis Planning for Crisis Management 1. 2. 3. Assess realistic possibilities of Assess crisis crisis Prepare plans to meet the crisis Game the crisis Action Plan Step 1 Step 2 Step 3 Crisis Communications Crisis Communications “Nobody wants to deal with their worst Nobody nightmare, but we should have recognized you’ve got to communicate.” recognized ~Robert Nugent, Foodmaker CEO ~Robert (Parent company of Jack-in-the-Box) (Parent CONSUMERISM CONSUMERISM The movement to protect consumers from The an imbalance of power with business and to maximize consumer welfare in the marketplace. marketplace. Consumer Bill of Rights Consumer Bill of Rights 1) The right to safety 2) The right to be informed 3) The right to choose 4) The right to be heard 5) The right to seek redress 6) The right to privacy Consumer Product Consumer Product Safety Commission Develops voluntary standards with industry Issues and enforces mandatory standards Recalls products or arranges for their repair Conducts research Informs and educates consumers Product Liability Definitions Product Liability Definitions Negligence: The failure to use such care as a reasonably prudent and careful person would use under similar circumstances. Foreseeability: The reasonable anticipation that harm or injury is a likely result from certain acts or omissions. Reasonable Risk Reasonable Risk The consumer: understands that a risk is associated with the product understands the probability of an injury understands the potential severity of the injury understands how to cope with the risk voluntarily accepts the risk to get the benefits of the product Perceived Risks Perceived Risks Activity/ Technology Nuclear power Motor vehicles Handguns Smoking Motorcycles Alcoholic beverages General aviation Police work Pesticides Surgery Firefighting League of Women 1 2 3 4 5 6 7 8 9 10 11 College students 1 5 2 3 6 7 15 8 4 11 10 Experts 20 1 4 2 6 3 12 17 8 5 18 Advertising Advertising American Association of American Association of Advertising Agencies Will not knowingly create advertising that contains: False or misleading statements or exaggerations, visual or verbal Testimonials that do not reflect the real opinion of the individual(s) involved Misleading price claims Claims that distort the true meaning or practicable application of statements made by professional or scientific authority Statements, suggestions, or pictures offensive to public decency or minority segments of the population Business Responses Business Responses to Consumerism Total quality management Total Voluntary industry codes of conduct Voluntary Consumer affairs departments Consumer Product recalls Product ...
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