1. MGMT 452 Corporate Social Responsibility
Zeynep Gürhan-Canlı
Strategic Management of Stakeholder Relationships
Chapter 2
February 22, 2010

2. Stakeholders
Those people and groups to which an organization is responsible
Primary Stakeholders: Groups fundamental to a company’s operation and survival. Balancing their needs is a strategic imperative.
Customers
Investors/shareholders
Employees
Suppliers
Governments
Communities
Those with a stake, or claim, in some aspect of a company’s products, operations, markets, industry, or outcomes
Stakeholder Interaction Model: There is a two-way relationship between the firm and a number of stakeholders.

3. Secondary Stakeholders
Groups that may influence and/or be affected by the company, but are not engaged in economic exchanges with the firm.
Media
Special interest groups
These groups are not fundamental to an organization’s daily survival.
They can place significant pressure on a business.

4. Stakeholder Orientation
The degree to which a firm understands and addresses stakeholder demands. Comprises three sets of activities:
The organization-wide generation of data about stakeholder groups and assessment of the firm’s effects on these groups
The distribution of this information throughout the firm
The organization’s responsiveness as a whole to this intelligence

5. Stakeholder Attributes…
Power
Extent to which coercive, utilitarian, or symbolic means can be used to impose a stakeholder’s views upon an organization.
Legitimacy
Perception or belief that a stakeholder’s actions are proper, desirable, or appropriate.
Urgency
Pressure that a stakeholder exerts on managers and organizations by stressing the urgency of its claims.

6. Reputation Management
The process of building and sustaining a company’s good name and generating positive feedback from stakeholders.
Most reputations take a long time to build or change.
Not handling a crisis situation to the satisfaction of stakeholders can damage reputations.

7. Reputation Management Process
Identify how the organization wants to be viewed by stakeholders.
Determine how stakeholders evaluate the company and their impressions of its image.
Evaluate others’ impressions of organizational performance.
Understand the company’s reputation.

8. Crisis Management
The process of handling a high-impact event characterized by ambiguity and the need for swift action.
Threat to company goals
Short response time
Stressful, emotional, uncertain, and demanding context
Close organizational scrutiny by employees, stakeholders, customers, government regulators, the media, competitors, and creditors

9. Crisis Management Process
Prodromal stage
Warning signs and symptoms may occur
Acute stage
Crisis occurs
Chronic stage
Ongoing crisis requires explanation and decision making
Resolution
Success and failure outcomes for organization and stakeholders

10. Development of Stakeholder Relationships
Relationships are founded on principles of:
Trust
Commitment
Communication
They are also associated with a degree of:
Time
Interaction
Shared expectations
Companies are searching for ways to develop long-term and collaborative relationships with their customers and business partners.
Social capital: An asset, which resides in relationships, that is characterized by mutual goals and trust. Facilitates smooth internal and external transactions and processes

11. Implementing a Stakeholder Perspective in Social Responsibility
Assessing the corporate culture
Identifying stakeholder groups
Identifying stakeholder issues
Assessing the organization’s commitment to social responsibility
Identifying resources and determining urgency
Gaining stakeholder feedback

12. Link between Stakeholder Relationships and Social Responsibility
Reactive behavior
Denying responsibility and doing less than is required
Defensive behavior
Admitting responsibility and doing the least that is required
Accommodative behavior
Accept responsibility and doing only what is required
Proactive behavior
Anticipate responsibility and doing more than is required