1. Stakeholder And Issues Management Approaches

2. Chapter Topics
Why use a stakeholder management approach for business ethics?
Stakeholder management approach defined
How to execute a stakeholder analysis
Stakeholder approach and ethical reasoning
Moral responsibilities of functional area professionals
Three issues management approaches
Two crisis management approaches

3. Why Use A Stakeholder Management Approach For Business Ethics?
The stakeholder approach is a response to the growth and complexity of understanding and study of the modern corporation and its influence on the environment.

4. The ethical dimension of this approach is based on the view that:
Profit maximization is constrained by justice
Regard for individual rights should be extended to all constituencies that have a stake in the affairs of a business
Organizations are not simply or only economic in nature but can and do act in socially responsible ways, not only because it is the right thing to do, but also to ensure their legitimacy

5. Stakeholder Management Approach Defined
The stakeholder approach provides a framework that enables users to map and ideally, manage the corporation’s relationships, both present and potential, with groups to reach win-win collaborative outcomes.
It does not have to result from a crisis or controversial situation.
It can be used as a planning method to anticipate and facilitate business decisions, events, and policy outcomes.
Business units, teams, and groups can use this approach.

6. Stakeholder Management Approach Defined
Stakeholder: any individual or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organization.
Primary stakeholders of a firm: owners, customers, employees, and suppliers.
Secondary stakeholders: all other interested groups such as the media, consumers, lobbyists, courts, governments, competitors, the public, and society.
Stakes: any interest, share, or claim that a group or individual has in the outcome of a corporation’s policies, procedures, or action toward others.

7. How To Execute A Stakeholder Analysis
The stakeholder approach is a pragmatic way of identifying and understanding multiple, often competing, political, social, legal, economic, and moral claims of many constituencies.
The stakeholder analysis is a series of steps aimed at the following tasks:
Mapping stakeholder relationships
Mapping stakeholder coalitions
Assessing the nature of each stakeholder’s interest
Assessing the nature of each stakeholder’s power
Constructing a matrix of stakeholder moral responsibilities
Developing specific strategies and tactics
Monitoring shifting coalitions

8. Stakeholder Approach And Ethical Reasoning
The stakeholder analysis is an analytical method where no prescribed ethical principles or responsibility rules are built-in.
Ethical reasoning in the stakeholder analysis means asking:
What is equitable, just, fair, and good for those who affect and are affected by business decisions?
Who are the weaker stakeholders in terms of power and influence?
Who can, who will, and who should help weaker stakeholders make their voices heard and encourage their participation in the decision process and outcomes?

9. Moral Responsibilities Of Functional Area Professionals
One goal of a stakeholder analysis is to encourage and prepare organizational managers to articulate their own moral responsibility, as well as the responsibilities of the company and their profession, toward their different constituencies.
Stakeholder analysis focuses the enterprise’s attention and moral decision-making process on external events.
This approach applies internally, especially to individual managers in and across traditional function areas.

10. Moral Responsibilities Of Functional Area Professionals
Traditional functional and expert areas include:
Marketing
Research and development (R& D)
Manufacturing
Public relations
Human resource management (HRM)

11. Three Issues Management Approaches
First Approach: 6-Step Issue Management Process
Most straightforward
More appropriate for companies or groups trying to understand, manage, and control their internal environments
Involves the following steps:
Environmental scanning and issues identification
Issues analysis
Issues ranking and prioritizing
Issues resolution strategizing
Issues response and implementation
Issues evaluation and monitoring

12. Three Issues Management Approaches
Second Approach: 7-Phase Issue Development Process
Issues are believed to follow a developmental life cycle
Life-cycle stages suggested for tracking an issue:
A felt need arises
Media coverage is developed
Interest group development gains momentum
Policies are adopted by leading political jurisdictions
The federal government gives attention to the issue
Issues and policies evolve into legislation and regulation
Issues and policies enter litigation

13. Three Issues Management Approaches
Third Approach: 4-Stage Issue Life Cycle
Thomas Marx observed that issues evolve from social expectations to social control through the following steps:
Social expectations
Political issues
Legislation
Social control

14. Two Crisis Management Approaches
First Approach: Precrisis Through Resolution
According to this model, a crisis consists of four stages:
Prodromal (precrisis)
Warning stage
Acute
Damage has been done
Chronic
Clean-up phase
Resolved
The crisis management goal

15. Two Crisis Management Approaches
Second Approach: Reaction Through Accommodation
Five phases of corporate social response to crises related to unsafe products, or product crisis management include:
Reaction
A crisis has occurred
Defense
The company is overwhelmed by public attention
Insight
Most agonizing time
Accommodation
Addressing public pressure and anxiety
Agency
Company attempts to understand the causes

16. Two Crisis Management Approaches
Suggestions that corporations can follow to respond more effectively to crises include:
Face the problem
Take your lumps
Recognize that there is no such thing as a secret or private crisis
Stage war games
Use the firm’s philosophy, motto, or mission statement
Use the firm’s closeness to customers and end users for early feedback

17. Two Crisis Management Approaches
Issues and crisis management methods and preventive techniques are effective in corporations only if:
Top management is supportive and participates
Involvement is cross-departmental
The issues management unit fits with the firm’s culture
Output, instead of process, is the focus