Strategic Stakeholder Management
Over a million managers and consultants are working together on management issues via 12manage each month...
|
|
Strategic Stakeholder Management |
Over a million managers and consultants are working together on management issues via 12manage each month... |
The instrumental approach for stakeholder management. Explanation of Strategic Stakeholder Management of Berman, Wicks, Kotha, Jones ('99) after Freeman. ('84) |
|
Instrumental approaches towards stakeholder theory hold that:
To maximize shareholder value over an uncertain time frame, managers ought to pay attention to key stakeholder relationships.
Firms have a stake in the behavior of their stakeholders. Prudent management
of firms' operating environments, including relationships with their stakeholders,
is a part of proper management in general. Therefore good stakeholder management
has clear instrumental value for the firms. A fundamental assumption of this type of model is that the ultimate objective
of corporate decisions is marketplace success. Firms view their stakeholders
as part of an environment that must be managed in order to assure revenues,
profits, and ultimately, to provide returns to shareholders. Attention to
stakeholder issues may help a firm avoid decisions that might prompt stakeholders
to undercut or thwart its objectives. This possibility arises because stakeholders
can control resources that can facilitate or enhance the implementation of
corporate decisions (Pfeifer & Salancik, 1978); in short, Stakeholder Management
is a means to reach an end; something what you have to do so that you can
achieve something else. The end, or the ultimate result, is generally not
the welfare of stakeholders. Instead, the firm's goal is the advancement of
the interests of only one stakeholder group: its shareholders. Employing the
terminology used by Donaldson and Preston (1995) and Quinn and Jones (1995),
we see the concern of the firm for stakeholder relationships as instrumental
and contingent on the value of those relationships to corporate financial
success. Quinn and Jones stated: "Instrumental [strategic] ethics enters the
picture as an addendum to the rule of wealth maximization for the manager-agent
to follow" (1995: 25).
Two variants of the Strategic Stakeholder Management approach are the direct effects model and the moderation model. In the direct effects model, the attitudes and the actions of managers toward stakeholders (their stakeholder orientation) are perceived as having a direct effect on firm financial performance, independent of the corporate strategy. In the moderation model, the managerial orientation toward stakeholders does impact the corporate strategy by moderating the relationship between strategy and financial performance.
Strategic Stakeholder Management Special Interest Group
Strategic Stakeholder Management Forum
 Comment on this PageStrategic Stakeholder Management Education & Events
Compare with Strategic Stakeholder Management: Intrinsic Stakeholder Commitment | Normative Approach of Stakeholder Theory | Shareholder Value Perspective | Stakeholder Value Perspective | Stakeholder Analysis | Stakeholder Mapping | Value Based Management | Strategic Intent | Moral Purpose
Return to Management Hub: Ethics & Responsibility | Human Resources | Leadership | Strategy
|
12manage for: |
|
|
|
|
|
|
| └► Roseanne Oaken (Australia) | Stakeholder Involvement in Strategic Change Management | "If you find the key and have a relationship with your stakeholders then it's easier to get them on the same page. And simple acknowledgement and logical reasoning has always worked for me. Believe in what you are doing and your sincerity will come across to ensure you get all the facts and/or perceptions." |
| └► Baha Barakat (Dubai) | Stakeholders | "Stakeholders are all those who effecting or affecting the organization. There are at least 6 (employees, customers, suppliers, society, owners and strategic partners)." | |
| └► Julius Nyangaga (Kenya) | Stakeholder Definition | "Start by being definite about the 'what' in the 'stakeholder of what?' question. Is the reference point an item (building, machine, etc.) or a process (project, system change, etc.)? A stakeholder is then any actor (individual, group, organization or institution) that can affect or be affected, knowingly or un-knowlingly, by the 'what'." | |
| └► Mohamed Adel (Egypt) | Stakeholders | "Stakeholders are those groups that have an interest in a business organization's activities. These groups are referred to as corporate stakeholders, because they affect or are affected by the achievement of the firms' objectives." | |
| └► Zimmermann (Sweden) | Stakeholder Definition | "Edward Freeman: 'Any group or individual that can affect or be affected by a company’s purpose.'" | |
| └► E. D. Camerik (Netherlands) | Stakeholders | "Stakeholders are people and companies and institutions who can affect the outcomes of a business organization, institution or project." |
| └► Edgar (Netherlands) | @Bouwmans | "Stakeholders are vital to the reputation of a company. Strategic stakeholder engagement can ensure that the reputation of a company is managed in a proactive instead of reactive style. This is far more efficient and has more effect. It can also generate more business if done correctly" |
The
view regarding Strategic Stakeholder Management, described by Berman,
Wicks, Kotha, Jones using earlier work of Edward Freeman is an Instrumental
Approach. (Academy of Management Journal; Oct99, Vol. 42 Issue 5). 
