Stakeholder Analysis

Knowledge Center

   

Assessing who or what really counts. Explanation of Stakeholder Analysis.

Contents

Premium

Stakeholder Analysis - Internal and External StakeholdersWhat is Stakeholder Analysis? Description

A Stakeholder Analysis is an approach that is frequently used to identify and investigate the Force Field formed by any group or individual who can affect or is affected by the achievement of the objectives of an organization. Stakeholder Analysis identifies the ways in which stakeholders may influence the organization or may be influenced by its activities, as well as their attitude towards the organization and its targets.


According to the Stakeholder Value Perspective of Edward Freeman (Strategic Management: a Stakeholder Approach 1984), the very purpose of the firm is to serve as a vehicle for coordinating stakeholder interests.  In this view, Stakeholder Analysis is an end in itself. But even when we take a Shareholder Value Perspective, stakeholder analysis is an important means to achieve the corporate purpose.


The role of management is to formulate and implement strategies and to make decisions that satisfy all or most of the stakeholders, or to ensure at least that no powerful and legitimate stakeholders are left too unhappy.


Here is a comprehensive list of typical stakeholders:

  • Owners and stockholders, investors
  • Banks and creditors
  • Partners and suppliers

  • Buyers, customers and prospects
  • Management
  • Employees, works councils and labor unions
  • Competitors
  • Government (local, state, national, international) and regulators
  • Professional associations, Industry trade groups
  • Media
  • Non-governmental organizations
  • Public, social, political, environmental, religious interest groups, communities

More individuals or groups may be identifiable in specific circumstances. Some individuals can be part of multiple stakeholder groups. Some stakeholders may have an explicit, formal organization, others may not. There are Internal Stakeholders (such as employees) and External Stakeholders (such as government).


The interests of all stakeholders are closely related with the general success and wealth of the organization. However, certain stakeholders interests are particularly important at times when certain issues must be addressed, for example:

  • Customers are important when quality of products are discussed.
  • Employees are important when circumstances or safety at work is discussed.
  • Government is important when dealing with the environment or legislation.

Stakeholder Analysis - Primary and Secondary StakeholdersWe can also distinguish between Primary Stakeholders (such as stockholders) and Secondary Stakeholders (such as government). Where the line is drawn precisely, is a source of much debate.


Usage of Stakeholder Analysis. Applications

  • Making a list of all stakeholders

  • Analyzing the interest of the various stakeholders
  • Analyzing potential conflicts of interest with or between stakeholders
  • Basis for further Stakeholder Mapping
  • Basis or major influencing factor for Strategy formulation and Decision-making
  • Evaluating existing strategies
  • Basis for stakeholder communication
  • Can also be used in Program Management and Project Management environments

Steps in Stakeholder Analysis. Process

  1. Identify stakeholders (Brainstorming)
  2. Understand stakeholder needs and interests. Classify them into meaningful groups. Compare: Stakeholder Mapping
  3. Prioritize, balance, reconcile or synthesize the stakeholders
  4. Integrate stakeholder needs into the strategies of the organization and into its actions

Results of Stakeholder Analysis. Benefits

  • Better insight can be obtained per stakeholder in:

    • The relationship with the stakeholder
    • Coalitions or organizations of which the stakeholder is a member
    • The significance of the stakeholder to the organization
    • The power of the stakeholder
    • The priorities of the stakeholder
    • Associated risk areas
  • Better strategies and decisions
  • Better acceptance of the strategy and decisions of the organization

Limitations of Stakeholder Analysis. Disadvantages

  • Ideally, a Stakeholder Analysis should be performed regularly or even continuously, since the relevant stakeholders, their power and associations may change quickly.
  • Note that the management of an organization has to assess the position of each stakeholder. It is the subjective perception of management that will ultimately decide the way in which the organization will act towards its stakeholders.
  • It is normally impossible for management to satisfy all demands of all stakeholders completely. Therefore managing becomes a balancing act or even a reconciliation or synthesizing act, with the following options:
    • Focusing on one leading stakeholder group, and satisfying all others to the extent which is necessary or possible. The leading stakeholder group could be the owners or stockholders (Shareholder Value Perspective) or even the managers themselves.
    • Trying to balance or reconcile or synthesize all interests according to their weight, importance or urgency (Stakeholder Value Perspective).
  • Note that quite often, a constructive cooperation with stakeholders is missing.
Stakeholder Analysis Special Interest Group


Special Interest Group (240 members)


Stakeholder Analysis Forum  

Recent topics

  How to Make a Sensible Decision in the Toughest Situations?
It is easy to be paralyzed for managers when they are forced to make decisions in tough situations, especially in those where they have understood all...
     
 
  Going 'Virtual' with Stakeholders
Increasingly getting work done or projects delivered requires a mix of stakeholder inputs, people in different locations, continents, organisations an...
     
 
  Partnerships and Stakeholders in the Agriculture Industry
KEY STAKEHOLDERS IDENTIFICATION IN AGRICULTURE
An agriculture industry is yet to be established in development countries because of limited resou...
     
 

Best Practices - Stakeholder Analysis
  Key Stakeholders' Expectations on Costs and Returns are not Matching
How can organizations handle the situation where some key stakeholders expect high returns (owners, shareholders, investors, managers) while
     
 
  Satisficing all Stakeholders
I like this article. It shows that no stakeholder is to be left out as all of them should be carefully understood and dealt with appropriately. But th...
     
 
  Avoiding Subjectivity in Stakeholder Analysis
As correctly stated in the excellent article above, any stakeholder analysis is typically the sum of the SUBJECTIVE PERCEPTIONS of the management team...
     
 
  Not doing a Stakeholder Analysis?
First excuse my writing. Personally I like the article, it gives me a notion of what to expect from a stakeholder analysis. There is one thing that I ...
     
 



All you need to know about management



Expert Tips - Stakeholder Analysis
 

Multiple Perspectives of Analyzing Stakeholders

 
 
 

How to Reduce Stakeholder Complexity

 
 
 

The Role of the CEO in Strategic Change Initiation

 
 
 

The Maturity Stages of Corporate Responsibility

 
 
 

How to Effectively Conduct a Stakeholders Meeting?

 
 



Advance yourself in business administration and management



Resources - Stakeholder Analysis

Framing in the Context of Conflicts

 

The Strategic Role of Public Relations and Communication in Business

 

Project Communication Planning

 

Introduction to Stakeholder Management

 

Stakeholder Analysis Diagrams

 
 

News about Stakeholder Analysis


     
 

News about Analyzing Stakeholders


     
 

Videos about Stakeholder Analysis


     
 

Videos about Analyzing Stakeholders


     
 

Presentations about Stakeholder Analysis


     
 

Presentations about Analyzing Stakeholders


     
 

Books about Stakeholder Analysis


     
 

Books about Analyzing Stakeholders


     
 

More about Stakeholder Analysis


     
 

More about Analyzing Stakeholders


     



Accelerate your management career



Compare with Stakeholder Analysis: Stakeholder Mapping  |  Force Field Analysis  |  Stakeholder Value Perspective  |  Shareholder Value Perspective  |  Ashridge Mission Model  |  Clarkson Principles  |  Intrinsic Stakeholder Commitment  |  Strategic Stakeholder Management  |  PEST Analysis  |  Crisis Management  |  Scenario Planning


Return to Management Hub: Communication & Skills  |  Decision-making & Valuation  |  Ethics & Responsibility  |  Program & Project Management  |  Strategy


More Management Methods, Models and Theory

Special Interest Group Leader

 


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2018 12manage - The Executive Fast Track. V15.0 - Last updated: 15-11-2018. All names ™ of their owners.