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In previous readings, we discussed the value of stakeholders. We established that stakeholders are a driving force in Non-Profit Organizations and For-Profit organizations. We have also established that their input can affect the organizations direction and as such, it is important to identify and understand their objectives. This is need so they can evaluate if the stakeholders influence will be embraced, marginalized, or mitigated. Based on this information, Stakeholders are key team members that cannot be ignored, rather they must be understood.
With understanding the stakeholder, one must determine the level of influence they can exert on an organization. The question is: How much influence should a stakeholder’s interest exert over a for profit organization? One would argue that the answer is subjective and is based on if the stakeholder is moving in the same direction as the organization or not. If the stakeholder is an ardent supporter of the organization, one would believe that it’s important to have these key stakeholders with a high degree of influence as they are pertinent. If the stakeholder is out of sync with the organization, then one would argue that the stakeholders influence should be minimize and/or marginalized.
An additional view that must be considered is differing perspectives by the stakeholders and how that effects their ability to influence an organization. Taran, (2015) argues that conflicting views, beliefs, and concerns among the key stakeholders with a high degree of influence can create a challenging environment. When this type of interaction occurs, the organization lead must decide if they will choose a side, mediate, or let the differing stakeholder’s fight-it-out. The organization lead can use this as an opportunity to increase the level of influence for the stakeholder that wins or use it as an opportunity to weaken a stakeholder that has a high degree of influence. As the organization has to determine if a stakeholder with a high degree of influence is good or bad, they also must determine on how to deal with the stakeholder.
Taran, Z., & Betts, S. (2015). CORPORATE SOCIAL RESPONSIBILITY AND CONFLICTING STAKEHOLDER INTERESTS: USING MATCHING AND ADVOCACY APPROACHES TO ALIGN INITIATIVES WITH ISSUES. Journal Of Legal, Ethical & Regulatory Issues, 18(2), 55-61.
For-profit companies are in the business to increase revenue by meeting the bottom line; therefore they should consider stakeholders’ interests because some of the key stakeholders have corporate stock and want to make money too.
To determine how much influence stakeholder interests exert over a non-profit company is dependent on stakeholder analysis that measures the objectives or motives of stakeholders from an organization’s vantage point. According to Lindenburg and Crosby (1981) as cited by Brugha and Varvasovszky (2000), questions are asked about the position, interest, influence, interrelations and other characteristics of stakeholders in order to gain insight (p. 239). The analysis is important because stakeholders are key individuals or groups that play an integral role in reaching organizational goals and objectives, and by working collaboratively, the objectives can be met through this partnership.
Brugha, R., & Varvasovszky, Z. (2000). Stakeholder analysis: a review. Health policy and planning, 15(3), 239-246.
The point was made in a previous post that in making decisions, management needs to take the views and interests of stakeholders into consideration. (Boatright (2006). Notwithstanding the necessity to take the needs and interests of stakeholders into consideration, it has been established, that the interest s of all stakeholders are not normally congruent with each other, and thus the question arises as the what is the best way to manage the conflicting interests of nonprofit organization.
One is not sure as to whether there is one best way to manage these conflicting and varied interests as it may very well be a function of the circumstance or the stakeholder groups at the time…
The first point to note however is that if one is going to manage any situation, relationships or otherwise, it is necessary that one first needs to create the enabling environment for such management to occur. According to Boatright (2006) the management of the organization should begin by creating an environment, of trust, fairness, the use of ethical standards, and honoring of agreements. In fact what is required is to begin build relationships based on core organizational values.
Boulette (2004). Identifies a methodology which he believes can be a useful tool I managing stakeholder interests. The tool is based on the prioritization of stakeholder’s interest which can be based on stakeholder level of interest and experience, identifying the stake holder’s perspective and their needs and finally aligning the stakeholder’s perspective and needs based on their perceived impact.
Organizations can also use a strategy particularly for the management of internal stakeholders of which Morris (1997) describes an s Stakeholder Management Devices. These are in effect mechanisms through management can respond to the concerns of internal stakeholders and includes these of ethics committees, written codes of ethics, employee newsletters which has the desired effete of moderating the behaviour of internal stakeholders..
Another approach would be to manage stakeholders based on their relative salience. As Gago and Antolin note the management can manage stakeholders based on their salience or relative importance but also with regard to their interest on the various issues to be dicussed..
Boutelle, J. (2004). Understanding organizational stakeholders for design success.
Boatright, J. R. (2006). What’s wrong—and what’s right— with stakeholder management. Journal of Private Enterprise, 21(2), 1-25.
Gago F R Antolin M N (2004) Stakeholder salience in corporate environmental strategy. Corporate Governance. 4(3) 65-76
Morris, S. A. (1997). Internal effects of stakeholder management devices. Journal of Business Ethics, 16(4), 413-424.