The Stakeholder Approach to

Business, Society and Ethics

 Origins of the Stakeholder Concept

Stake
An interest or a share in an undertaking.
Can be categorized as:
Interest Right Ownership

Legal

Moral
Stakeholders
Any individual or group who can affect or is affected by the
actions, decisions, policies, or goals of the organization.

Stakeholder is a variant of the concept of stockholder an

investor / owner of business.
Who Are Business Stakeholders?
Stockholder Employees

Customers Community Competitors

Business Stakeholder
Groups

Suppliers Special-Interest Media

Group

Society General Public

Who Are Business Stakeholders?

Evolution and Development of the Stakeholder Concept Views

of the Firm

Production Managerial Stakeholder

View View View
Who Are
Business
Stakeholders?

Production and ManagerialViews

Who Are
Business
Stakeholders?

StakeholderViews
 Who Are Business Stakeholders?

Primary and Secondary

Stakeholders
Primary stakeholders are those stakeholders that
have a direct stake in the organization and its success

Secondary stakeholders are those that have a

public or special interest stake in the organization
Social Stakeholders
Secondary social
Primary social stakeholders
stakeholders
Shareholders and Government regulators
investors Civic institutions
Employees and managers Social pressure groups
Customers Media and academic
Local communities commentators
Suppliers and other Trade bodies
business partners Competitors
Nonsocial Stakeholders

Primary nonsocial Secondary nonsocial

stakeholders stakeholders
Natural Environmental
environment interest groups
Future generations Animal welfare
Nonhuman species organizations
GROUP EXERCISE!
Based on your CASE PROJECT
1. Who are Your stakeholders?
2. What are Your stakeholders stakes?
3. What opportunities and challenges do Your stakeholders
present to the firm?
4. What economic, legal, ethical, and philanthropic
responsibilities does the firm have to its stakeholders?
5. What strategies or actions should the firm take to best
address stakeholder challenges and opportunities?
6. 2 groups should be presenting the result for 5 minutes
for each group
1. Who Are Our Stakeholders?
Owners Employees Governments Customers
Trusts Young employees Federal Business purchasers
Foundations Middle-aged employees EPA Government purchasers
Mutual Funds Older employees FTC Educational institutions
Universities Women OSHA Global markets
Board members Minority groups CPSC Special-interest groups
Management owners Disable State Internet purchasers
Employee pension Special-interest groups Local
funds Unions
Individual owners
Community Competitors Social Activists Groups
General fund-raising Firm A People United to Save Humanity (PUSH)
United Way Firm B Rainforest Action Network
YMCA/YWCA Firm C Mothers Againts Drunk Driving (MADD)
Middle schools Indirect American Civil Liberties Union
Elementary schools competition Consumers Union
Residents who live close by Global competition People for the Ethical Treatment of Animals
All other residents (PETA)
Neightborhood associations National Rife Association
Local media National Resources Defense Council
Chamber of commerce Citizens for Health
Environments
2. What Are Our Stakeholders Stake?
Identify the nature/legitimacy , the power, and
the urgency of a groups stakes
Legitimacy the perceived validity of the
stakeholders claim to a stake
Power the ability or capacity of a stakeholder to
produce an effect
Urgency the degree to which the stakeholders
claim demands immediate attention

Identify specific groups within generic group

Generic Group customer, etc.
Specific group business purchaser, government
purchasers, etc.
 3. What Opportunities and Challenges do
Stakeholders Present?

Opportuni Build productive working

es relationships with the stakeholders
The potential for cooperation
with us
Challenges Representative of how the firm
handles its stakeholders
The potential for threat against
us
4. What Responsibilities Does a Firm Have
to its Stakeholders?
What responsibilities does a firm have in its relationships
with all stakeholders?
Responsibilities are:
Economic be profitable
Legal obey the law
Ethical be ethical
Philanthropic be a good corporate citizen
 4. Stakeholder/Responsibility Matrix
Stakeholde Economic Legal Ethical Philanthro
rs pic
Owners
Customers
Employees
Community
Public at large
Social
Activists
Other
5. What strategies or actions should the firm take to best
address stakeholder challenges and opportunities?
Types of Stakeholders

Stakeholders Potential for Threat to

High Organization Low

Stakeholder Type 4 Stakeholder Type 1

High Mixed Blessing Supportive
Strategy: Strategy:
Stakeholders Collaborate ? Involve
Potential for
Cooperation
With Stakeholder Type 3 Stakeholder Type 2
Organization Nonsupportive Marginal
Low
Strategy: Strategy:
Defend Monitor
THANK YOU