1 The Stakeholder Approach Corporate Communication NMH

Peggy Simcic Brønn 2 The roles of communications Informing Advocating Dialoguing Types of communication – One-way – Two-way (Symmetrical/Asymmetrical)

Peggy Simcic Brønn 3 Stakeholders Stockholders Government Regulators Boards of Directors Community leaders Stockholders Government Regulators Boards of Directors Community leaders Associations Political groups Professional societies Associations Political groups Professional societies Suppliers Unions Employees Suppliers Unions Employees Consumers Industrial purchasers Service users Consumers Industrial purchasers Service users Environmentalists Media Community residents Voters Minorities Women Other publics Environmentalists Media Community residents Voters Minorities Women Other publics Normative linkages Functional linkages Input Output Diffused Enabling Organization’s external linkages ”...a group or individual who can have an effect on or be affected by the organization.” - Freeman (1984) Organization

Peggy Simcic Brønn 4 Four Key Linkages Enabling Linkages Functional Linkages –Input linkages –Output linkages Normative Linkages Diffused Linkages

Peggy Simcic Brønn 5 Enabling Linkage Organization could not exist without this linkage –Authorities –Shareholders –Legal System

Peggy Simcic Brønn 6 Functional Linkage Linkage that give input and take output Input Linkage –Employees –Unions –Suppliers Output Linkages –Customers –Other organizations –Individual consumers

Peggy Simcic Brønn 7 Normative Linkage Organizations that have common problems or similar values –Membership organizations –Professional groups –Associations

Peggy Simcic Brønn 8 Diffused Linkage Elements in society that are not clearly identified as a formal member of organization –Environmentalists –Community Residents –Media –Other Publics

Peggy Simcic Brønn 9 Corporate identity and reputation Corporate Identity Names, Self-Representations Customer Image Community Image Investor Image Employee Image Corporate Reputation Fombrun, C. J., Reputation, Harvard Business School Press

Peggy Simcic Brønn 10 Reputational risk management cycle Corporate Citizenship Corporate Performance Safety Net Opportunity Platform Reputational Capital Fombrun, C. J. et al., “Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk,” Business and Society Review, 105:1,

Peggy Simcic Brønn 11 Media Activists Investors Employees Partners Customers Regulators Community Safety Net Threat of Boycott Threat of Legal Action Threat of Illegitimacy Threat of Exposure Threat of Misunderstanding Threat of Defection Threat of Rogue Behavior Threat to Value Managing the downside of reputational risk Fombrun, C. J. et al., “Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk,” Business and Society Review, 105:1,

Peggy Simcic Brønn 12 Community Media Activists Investors Employees Partners Customers Regulators Opportunity Platform Promise of advocacy Promise of legal action Promise of legitimacy Promise of favorable coverage Promise of loyalty Promise of collaboration Promise of commitment Promise of value Managing the upside of reputational risk Fombrun, C. J. et al., “Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk,” Business and Society Review, 105:1,

Peggy Simcic Brønn 13 What stakeholders want… Visibility ò information Virtue ò good organizational behavior Verifiability ò access to information

Peggy Simcic Brønn 14 The challenge... “I’m sorry, but if you expect any self- respecting activist to believe a word you say about your commitment to human rights, then you are as arrogant as the PR firm that came up with this strategy.” - Unknown ‘activist’ quoted in ‘How do we stand?’ People, Planet & Profits, A Summary of the Shell Report 2000, Newsweek.

Peggy Simcic Brønn 15 Mess management: Multiple perspectives Descriptions of perceived relevant activity Yields choices of... Comparison of descriptions with the perceived reality Actions to improve the situation Influenced by individuals’ mental models A real-world situation of concern

Peggy Simcic Brønn 16 Mental models Deeply held images of how the world works. ò Explicit understandings. ò Implicit understandings. Represent the most important factors and the relationships that link them. Provide the context in which to view and interpret new material. Determine how stored information is relevant in a given situation. Frequently treated as if they were the truth!

Peggy Simcic Brønn 17 Mental models The ladder of inference Reflexive loop Our beliefs affect what data we select next time I make ASSUMPTIONS based on the meanings I add I take ACTION based on my beliefs I draw CONCLUSIONS I add MEANING (cultural and personal) I select DATA from what I observe Observable “data” and EXPERIENCES (as a video recorder might capture) I adopt BELIEFS about the world

Peggy Simcic Brønn 18 Applying the Ladder of Inference The ladder provides a means to ask questions... Ô What is the observable data behind that statement? Ô Does everyone agree on what the data is? Ô Can you run through your reasoning? Ô How did we get from that data to these abstract assumptions? Ô When you said “[your inference],” did you mean ”[my interpretation of it]” ?

Peggy Simcic Brønn 19 Essential skills for working with mental models ò Reflection Becoming more aware of your own thinking and reasoning. ò Inquiry Inquiring into others’ thinking and reasoning. ò Advocacy Making your own thinking and reasoning more visible to others.

Peggy Simcic Brønn 20 Working with mental models Balancing Inquiry and Advocacy A palette of conversational and dialogue skills. Protocols for balancing inquiry and advocacy. Conversational recipes... ò Post hoc examination of conversations. ò Seeking generic strategies for improving use of recipes. ò Ask for other’s perspectives (inquiry).

Peggy Simcic Brønn 21 Co-orienting stakeholders’ mental models for improved communication Organization’s perception of Stakeholder A’s views Organization’s perception of Stakeholder A’s views Stakeholder A’s definition and evaluation of an issue Stakeholder A’s definition and evaluation of an issue Stakeholder A’s perception of organization’s views Stakeholder A’s perception of organization’s views Organization’s definition and evaluation of an issue Organization’s definition and evaluation of an issue UNDERSTANDING AGREEMENT ACCURACY CONGRUENCY

Peggy Simcic Brønn 22 Co-orientation states True consensus – The parties know they share an agreement on their evaluation of an issue. Dissensus – The parties hold conflicting views and are aware of their differences. False consensus – The organization believes that the stakeholder agrees with them on a particular issue, or – The stakeholder group mistakenly believes that the organization holds the same view that they do. False conflict – The parties believe that they disagree on an issue when in fact they agree.

Peggy Simcic Brønn 23 Dialogue as the basis for communications Models of communication –Shannon and Weaver (1949) – focus on the medium –Cognition-based models – focus on the message Dialogue “...a sustained collective inquiry into everyday experience and what we take for granted.” Senge, et.al. (1994). The Fifth Discipline Fieldbook

Peggy Simcic Brønn 24 Discussion Ability to acquire information Identify threats and opportunities (proactively) Conduct research Engage in individual and organizational reflection Organizational changes

Peggy Simcic Brønn 25 Influences on multiple perspectives Levels of analysis Cultural –The “Cultural Iceberg” Organizational –Environmental factors –Structural factors Individual –Cognitive factors –Personality factors

Peggy Simcic Brønn 26 The cultural iceberg Primarily in awareness Primarily out of awareness fine arts literature drama classical music popular music folk dancing games cooking dress notions of modesty conception of beauty cosmology ideals governing childrearing rules of descent relationship to animals patterns of superior subordinate relations definition of sin courtship practices conception of justice incentives to work notions of leadership tempo of work patterns of decision making conception of cleanliness attitudes towards the dependent theory of disease approaches to problem solving conception of status mobility eye behavior roles in relation to status by age, sex, class, occupation, kinship etc.. conversational patterns in social contexts conception of past and future definition of insanity nature of friendship ordering of time conception of “self” patterns of visual perception preference for competition or cooperation body language social interaction rate notions of adolescence notions about logic and validity patterns of handling emotions facial expressions arrangement of physical space...AND MUCH, MUCH MORE...