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G3-[ABS4]Stakeholder Strategy (institutional pressure (con come from (GOV,…
G3-[ABS4]Stakeholder Strategy
two different kinds of conflict
Normative conflict
EX:child labor, privatization
Solution→public education campaigns, enfranchisement, business model adaption
firm actions act in conflict with those societal norms
Distributional conflict
Negative externalities
EX:air, water and noise pollution
Solution→regulation, lawsuits, assigning property rights
firm lack market incentives to reduce these costs
Common goods
EX.natural resource extraction industries
Solution→monopoly over resources, government regulation, self-regulation
firms or individuals may over-consume
Market power
Solution→regulation, merger and acquisition approval
EX:collusion, cartels, predatory
firms may capture consumer surplus at the expense of general welfare
Information Asymmetries
EX.used car, organic foods, share value
Solution→reporting, standard and label
increase transaction cost
Stakeholder management
What is the mission of enterprise?
Create value for stakeholder
Differernt stakeholders may seek different values
One purpose is to think about ethical considerations in an organization's strategy
Strategy & Ethics
Think beyond immediate financail effect
Regard stakeholders as ends intead of means to profits
Value creation involves value
Stakeholder analysis
It reveals what type of value stakeholder desire and allows you to analyze strategic choices based on the information
Alignment: Align Stakeholders' needs
The Tool: Stakeholder Issue Matrix
To Know
What are the kinds of value our stakeholders expect
Sometimes Secondary Stakeholders matters more than Primary Stakeholders.
To think
the implications and impact on our Stakeholders
Make our Strategic actions more comprehensive
to think about the implications of our business decisions more broadly.
to identify opportunities
to avoid controversies
Introduction to stakeholder strategy
Key purpose of business
Create value for variety of parties Ex. Employee, customers
Creating value
Organizational Values
Organizational Capabilities
Valuable Competitive Advantages
Market Opportunities
institutional pressure
con come from
meida
negative press coverage
NGOs
activist social organization
GOV
law
policy
regulation
political
may act against firms in response to normative & distributional conflict
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stakeholders can bring pressure to bear on institution
influence competitive environment
pose significant threats and opportunities