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Stakeholders• Definition– any individual or group which affects or is affected by
the organization
• Stakeholder management: – Balancing the competing preferences or claims of
specific stakeholders (SH)
• Stakeholder saliency– Power – how much can they influence the organization?– Legitimacy – are their claims legitimate? actions
appropriate?– Urgency – do their claims require immediate attention?
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Stakeholder management• 3 approaches– Descriptive: legal requirement – "have to" deal with SH– Instrumental / pragmatic: see SH as means to reach
performance goals – "makes business sense"– Normative: the morally right thing to do – "should"
• Tools – Stakeholder mapping– Issues and impact charts– Priority table– Influence grid
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Internal
Value Chain
External
ExternalNGOs, communities, government, media, unions, banks,…
Value chainCustomers, suppliers
InternalEmployees, managers, shareholders
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Typical stakeholder map
Firm
Government
Political groups
Shareholders
Financial institutionsSpecial
interest groups, NGOs
Customers
Suppliers
Unions
Employees Media
Competitors
Consumer
groups
Trade assns.
Community
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ESC Rennes' stakeholders
ESCR
National government ministries
Accrediting bodies CCI
Financial institutions
Prospects
Students
Suppliers
Unions Employees
Media
Competitors
Companies
CGE - French bus. school
assn.
Local government
Alumni
Parents
International partners
French feeder schools
Management
FacultyAdmin.
staff
Program
Nationality
Associations
French partner schools
Issues?
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Stakeholder management5 key questions
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2. Which SH are priority in terms of:
• Legitimacy?• Power?• Urgency?
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Stakeholder management5 key questions
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3. Which opportunities (potential cooperation) and threats
(potential risks) do SH represent?
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Stakeholder management5 key questions
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4. What are our responsibilities towards SH?• Economic
• Legal• Ethical
• Philanthropic
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Stakeholder management5 key questions
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5. How to manage SH claims, relations?• Directly or indirectly, i.e., lobbying• Proactively or defensively• Negotiation strategy: win-win, competitive,
accommodate, compromise• Formalize SH relations within the organization:
centralized vs. decentralized
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Issues and impactsSH Human
rightsTechnology implementation
Economic impact
Safety / social impact
Environmental impact
Proposed legislation
Customers
Suppliers
Employees
Regulators
Unions
NGOs
Investors
Unions
Media
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Priority tableSH Ability to help us Ability to hurt us Likelihood of acting Overall priority
Customers
Suppliers
Employees
Regulators
Unions
NGOs
Investors
Unions
Media
Score from 1 (least) to 5 (most)
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Influence Grid
Low
Low
High
High
Su
pp
ort
Influence
EMPOWER
MONITOR
PARTNER
ENGAGE
Work together to achieve common goals
Influence their thinking
Enhance their influence
Track behavior and communications
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Something fishyCase study
• You are a purchasing manager for a multinational food company specializing in the sale of fresh tuna and frozen fish products.
• You have sub-contracted fishing boats using nets which, in addition to catching tuna, ensnare and kill dolphins.
• Your office regularly receives scientifically-valid reports from government and environmental protection agencies about the depletion of the world’s oceans. One of them, the Marine Stewardship council (Fr.) keeps a close eye on your company’s operations and offers a sustainable fishing label which you really haven’t investigated.
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Something fishyCase study
• Some of your fishing boats have physical confrontations with Greenpeace which oppose excessive fishing and the mistreatment of dolphins.
• In addition, the media (video) draw regular attention to the plight of dolphins ensnared in nets.
• Some of your customers, like the Auchan hyper market chain, have already taken a position, and you’ve lost their business. What if other retailers follow suit?
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Something fishyCase study - your turn!
• Work in small groups for 30 mn. to analyze this situation – Opportunities and risks– Which negotiation strategy / approach– Use SH map and influence grid tools
• More specifically, which strategy to use in dealing with Greenpeace? see video. Remember that Greenpeace is a large organization with its own issues.
• Make recommendations
• How specifically would you manage SH relations?
• Be ready to present your analysis and recommendations Short PPT
Click for video on Greenpeace warrior spirit
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Types of NGOs
Company focusedDirect opposition
Greenpeace, Human Rights Watch
Policy focusedLobby to shape opinion
and legislationAmnesty Int’l., World Conservation Union
Issue focusedSolve specific
environmental, economic, or social problems
Care, Int’l. Red Cross
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Water issues• Conservation– Garric, Audrey (2012), Qui consomme vraiment
l’eau de la planète ? , Le Monde, accessed 2012 02 17
• Accessibility
• Pollution
• Privatization of water utilities– Argument for: efficiency, service, less corruption– Argument against: full-cost recovery, the nature
of water (a public good – should be managed by the government)
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Privatization failures
• Véolia and Suez Environment in Paris and Budapest
• Suez Environment, U.S.
• Coca Cola video: facts on water, 2007 partnership with WWF
• Nestlé
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Coca Cola Bottling PlantKerala, India
• $ 1 bn. invested in Indian business 1993-2004
• Problems– Used 510,000 liters of groundwater daily– Water table levels fell by 8 – 12 m
• Kerala bottling plant– 2001-03 Campaign to close plant– 2004 court order closing plant
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Coca Cola Bottling PlantReaction, stakeholder issues
• Reaction–Reduced water use by 24% in plants– Installed rainwater collection systems in 26
of their plans• Stakeholder partnerships of Coca Cola with–Water Stewardship Initiative*–WWF (partnership policies)–Attention paid to water footprint– See also Alliance for Water Stewardship
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Coca Cola Bottling PlantCommitments to:
•Reduce
•Recycle
•Replenish
• See WWF India's partnership policy
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NestléBottled water
• Arguments against– Wastefulness: 3 l. water 1 l. bottled water– Transportation costs– Plastic bottles, recycling– Tap water is a free, healthy substitute
• Arguments for: health• Toronto's ban on bottled water• See Story of Bottled Water video and city of Cleveland’s
(SH) reaction
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NestléSH management
• Ad campaign
• Hired lobbyist to fight against municipal bans
• Nestlé was accused of hiring a security firm to spy on NGO ATTAC in Switzerland and Colombia.
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Stakeholder managementKey points
• Map your stakeholders
• Prioritize claims and issues in terms of legitimacy, power, and urgency:
–Use the stakeholder influence grid to segment SH in terms of support and influence
• Scenario planning: –Consider opportunities and risks– Integrate these into company objectives and
strategy29
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Stakeholder managementKey points
• Develop internal SH management capability
– Generally speaking, be pro-active, take initiatives
– Determine negotiation strategy with respect to each SH: win-win, competitive, accommodation, negotiation, compromise.
– Formalize relations: communication strategy and tools
– For staff with frequent SH interactions• Train them in key issues and negotiation
approaches• Involve them in strategic decisions
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