Lesson 9: Nonmarket Stakeholders
Overview
Overview
Management of stakeholder interests is a key aspect to a successful nonmarket strategy and in addressing the social responsibility of corporations. While there are common approaches to mapping various stakeholders and their interests, there are endless ways to categorize all the types of stakeholders, their interrelationships, and their valuations of a given situation or action. Most stakeholder analyses be very much tied to the specifics of a given project, making modifications and customizations depending on the goals and scope of the stakeholder process. For this lesson, we will be covering four readings (plus two optional) that describe 1) how to do (or not do) a stakeholder analysis; 2) identifying the most important aspects of stakeholder management; 3) methodological updates to earlier work on stakeholder theory; and, 4) stakeholder management in renewable energy investments.
Learning Objectives
By the end of this lesson, you should be able to:
- identify and characterize types of stakeholders;
- explain the foundations of stakeholder theory; and
- develop a stakeholder analysis.
What is due for Lesson 9?
This lesson will take us one week to complete. Please refer to the Course Syllabus for specific time frames and due dates. Specific directions for the assignment below can be found within this lesson.
| REQUIREMENTS | ASSIGNMENT DETAILS |
|---|---|
| TO DO | Read and familiarize yourself with all the Lesson 9 materials. |
| READ |
|
| ASSIGNMENT |
|
Questions?
If you have any questions, please post them to our Questions? discussion forum (not e-mail), located under the Discussions tab in Canvas. I will check that discussion forum daily to respond. While you are there, feel free to post your own responses if you, too, are able to help out a classmate.
9.1 Identifying Stakeholders
9.1 Identifying Stakeholders
Scale of Stakeholder Analysis
When doing a stakeholder analysis, the scale of analysis needs to map onto actual processes that can be engaged by those entities. Otherwise, the analysis becomes too generalized to be of much use.
There are many ways to approach stakeholder analysis. In this section, it says, "'secondary,' non-economic stakeholders included in a firm's stakeholder management will often be labeled as society, NGOs, and/or government." However, the stakeholder matrix describes secondary stakeholders as ones that "may be affected by the outcomes of decisions without direct input or significant interest in the process."
First, a category as broad as society, NGOs, or government, doesn’t help you manage a given situation. How do you try to "manage society" or "a government"? You have to get as specific as possible. If government offices, which ones: Local, State or Federal? Which people in which positions are being affected? Does this make sense? What does it help your analysis to say that everyone in the world is being affected by climate change; therefore we are all secondary stakeholders? Are they all being affected equally? Probably not... so, any of these categories need more granularity in an analysis.
The approach covered in the article addresses a firm/management approach to stakeholder analysis. The Stakeholder Matrix I developed is intended to be applicable to social projects and looking at non-economic impacts. If you are a company managing stakeholders, you are mainly concerned with economic outcomes, and your concern with secondary stakeholders is mainly a financial one. However, if you're trying to implement a project such as cleanup or remediation of a toxic site, you are not concerned with economic outcomes of secondary stakeholders, but rather, health impacts. As such, the “economic management only” approach is not going to capture concerns of secondary stakeholders in this case.
Stakeholder analysis is an evolving process and, much like LCA, it depends on goals and scope and the depth to which you want to provide details.
Stakeholder Identification Matrix
A given action or decision can have significant consequence depending on whom, what, and how the stakeholder is in relationship to the action or decision.
- A stakeholder analysis should be conducted early in a project to ensure equitable representation in a decision-making process around a given action.
- A stakeholder analysis requires representation from actual stakeholders or reasonable proxies, as in the case of silent stakeholders.
- Equitable outcomes require an equitable process of evaluation.
| Primary stakeholders have a specific interest in the outcomes of a process and/or intervention. | Secondary stakeholders may be affected by the outcomes of the decisions without direct input or significant interest in the process | Key stakeholders can significantly impact the process and/or outcomes, but may or may not be directly impacted by the outcomes. |
|---|---|---|
| Stage 1: Consider the three types of stakeholders here. | ||
|
Stage 2: Use the following categories of impacts to help identify possible stakeholders along with interests:
|
||
| Stage 3: Use these techniques to help you map the stakeholders. |  [1] |
|
Printable, larger version of the Stakeholder Matrix 1: Identification table. [4]
9.2 Stakeholder Engagement
9.2 Stakeholder Engagement
Stakeholder identification is crucial to working towards their engagement within a process. As we saw above, there are multiple ways in which to identify stakeholders, and it is through these identifiers which engagement can begin. An example of this can be seen in the stakeholder identities matrix below. For example, the stakeholders identity will shape how and to what degree they should be engaged in the process.
There are many forms of and forums for stakeholder engagement. The degree of stakeholder engagement depends significantly on:
- the desired outcomes of the process
- the time and resources allocated for the process
- the degree of commitment by those driving the process forward
- the timing of the initial engagement in relation to the project timeline
- the willingness to listen to stakeholders and put their feedback into practice
Stakeholder Identities Matrix
| Identity vs Roles | Investors | Customers | Employees | Competitors | Suppliers | Government | Media | NGOs |
|---|---|---|---|---|---|---|---|---|
| Age-based groups, e.g. children, seniors | ||||||||
| Racial, national or ethnic based groups | ||||||||
| Gender or sexuality based groups | ||||||||
| Ability-based groups, e.g. blind, deaf, mental health | ||||||||
| Political or issue based groups | ||||||||
| Location based groups | ||||||||
| Role-based groups, e.g. parents, grandparents, students | ||||||||
| Other Social Groups |