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ASM_G3_Stakeholder Strategy (Aligning key Stakeholders (how (put together…
ASM_G3_Stakeholder Strategy
Different value for Stakeholders
Secondary stakeholders
Government
Abide by the law, Honest taxation
Special interest group
To support come specific issue
Consumer advocate group
Claiming consumer rights
Key stakeholders
Employee
Good pay, Job security, A clear career path
Customer
Low product price, Special value proposition
Supplier
Reliability, Opporpunity
Community
Job vacancies,
Environmental protection
Investor
Financial return,
Sources of Institutional Pressure
Political actors
Stakeholders
Normative conflict
Definition: things ought to happen
Firms have conflict with social norms
Ex: child labor, privatization or unionization
Solution: public education, campaigns, enfranchisement
Distributional conflict
Market power
Definition: has the ability to price above competitive levels
Firms capture consumers surplus at the expense of general welfare
Ex: collusion, cartels or predatory pricing
Solution: regulation, antitrust lawsuits
Negative Externalities
Definition: costs that are imposed on one stakeholder by the action of another stakeholder without any compensation
Firms lack incentives to reduce these costs
Ex: noise,air or water pollution
Solution: regulation, lawsuits, property rights
Common goods
Definition: resources to which everyone has free access
Tragedy: firms or individuals over-consume
Ex: natural resources: oil fields, water tables
Solution:government regulation, self-regulation
Information asymmetries
Ex: used cars, organic foods, share value
Definition: one party knows more than another party and takes advantage of them
Increases transaction costs
Solution: reporting, standards and labels
Value Creation and Your Values
Strategy and Ethics
Institutional/non-market strategies can seem overly instrumental
Can employ to try to respond to or preempt and deal with those kinds of pressures.
Also important to think beyond the immediate financial impact of effective stakeholder management
Seeing stakeholders as ends, and not just means to profits
a set of relationships with variety of parties, stakeholders, and it's very important.
Value creation involves values
Valuable competitive position
How do you want to lead or manage?
Not by financial well being, but as a partner that you can engage with it
Aligning Secondary Stakeholders
Why are Secondary Stakeholders important?
Institutional pressure
Influence a firm's strategy, performance.
Often Come from
Media
Governments
NGO
Sometimes unfair or unreasonable targeting.
Signal of a larger stakeholder management issue.
Why stakeholders act against firm?
Normative conflict
Norms of firm
Belief of firm
mission firm
purpose of firm
Distributional conflict
Abuse of market power
Existence of negative externalities
Capitalizing on information asymmetries
Key Question
Can we predict when these secondary stakeholders might take action?
When and under what conditions might these impact be effective?
How can and should a firm adapt?
Aligning key Stakeholders
who
Investors, employees, customers, suppliers , community
what
how to align the interests of those different stakeholders,cause We want to create value for those stakeholders simultaneously
how
put together some sort of a stakeholder issues matrix
what it is they're looking for? (from act further more ask them)
why
It's make business decisions more broadly,also avoid tracks.
If company doing great job on t ，then will find out the key to long-term value creation