Who exactly are stakeholders?
Any group or individual who is affected by or can affect the achievement of an organization’s
objectives (Freeman: 1984)
Individuals and groups with a multitude of interests, expectations, and demands as to what
business should provide to society.
Anyone or any organization w/ a perceived stake the organization activities and operation
We live in a pluralistic society therefore ether is diffusion of power
In a nutshell everyone is a stakeholder
• Demographics: look into ecosystem to see how many demographic differences are there; ethnic
• Psychographics: shows quality of life and more educated people = more aware of how bsuieness
decision may affect the society
• Covert power: this is something that you cannot see by legitimate authority but by networking
• Reputation: shows who is influential
• Role in decision process: look into how people participate in public policy
Diffusion of Power
Prevents concentration of power: power is more decentralized; people have a more equal
distribution of power
Maximizes freedom: everyone has freed of expression, belief etc.
Disperses individual allegiances
Creates diversified loyalties; more complexities; v. important in a multicultural Society like
Canada that there will many differences
Pursuit of self-interest individual and organization may pursue their self-interest; may not
necessarily be bad
Proliferates organizations with similar goals
Forces conflicts : different groups and individuals leads to a lot of completion and a lot of
Promotes inefficiency Stakeholders vs. Stakeholder Viewpoints
o A business exists to make money – greatest efficiency is achieved through profit
Work w/ a profit generating perspective- main goal is to make money and
o profits, > taxes paid to government for use in dealing with social issues
o Property rights theory (corporation owned by shareholders)
o Business has a responsibility to do more than maximize profits
o Business has caused several problems so it has a responsibility to fix them
o Social institution theory (society provides the very existence of business through legal
o Believe it’s your ethical and social responsibility to do something good in your society
Shareholder View vs. Stakeholder View
Why view is correct?
o The correct view is in the grey area
o The stakeholder map is complex
o First must identify who your stakeholders are and prioritize them
o Cannot have one definite strategy to handle to stakeholder
o Different stakeholder have different stake in the business
Stakeholders: Some Realities
1. Stakeholders’ interests will not always be clear
2. Some stakeholders will win, others will lose: it is almost impossible to please every stakeholder;
it is not to
3. Stakeholders watch how the organization treats other stakeholders: stakeholders are
gatekeepers; they watch how you treat your other stakeholders to make sure you’re Socially
4. Stakeholder management will cost money, but might be cheaper than not managing
stakeholders: Costly but may actually less costly in the long run
5. Stakeholders and stakeholder groups are not static
6. Stakeholder contributions are essential: if your stakeholder is dissatisfied w/ you it could
negatively affect your operation
Who are Typical Stakeholders? Key Questions in Stakeholder Management
1. Who are stakeholders?
2. What are stakeholders’ stakes?
3. What opportunities and challenges do stakeholders represent?
4. What economic, legal, ethical, and philanthropic responsibilities does a firm have?
5. What strategies or actions should firms take to manage stakeholders’ opportunities and
Key Question In Stakeholder Management
Who are our stakeholders?
Management must identify generic stakeholder groups and specific subgroups
Generic subgroups ex, Employees sub-subgroup unionized and