Stakeholder expectations
Members
In return for investing funds in ordinary shares they will obtain a voting right and the right to participation in any dividend or further share issue, together with the potential capital increase in the value of their share should they choose to sell it
Employees
In return for the input of their time, experience, knowledge and labour they will expect appropriate remuneration to be paid as agreed under their employment contract, together with safe working conditions, other potential workplace benefits, continuity of employment and when appropriate the opportunity for progression
Suppliers and customers
In return for providing reliable supplies to the business, suppliers will expect payment in accordance with agreed terms of their contract and have the potential for repeat orders and a continuity of supply
In return for their purchase of products or services from the business, customers will expect satisfaction of their perceived expectations through the ability to consume or resell a safe and reliable product or service in line with consumer law
Banks and other providers of finance together with other contributors to the operation of a business, would also fall under this 'supply chain' category - in each case there will be an input from the stakeholder with an expected return of some sort in lines with the contract agreed for the provision of finance
Community and environment
In return for the right to operate, the business will need to comply with national and local laws and corporate social responsibility expectations, eg packaging and waste disposal, payment of taxation as required, minimisation of carbon and other emissions
Stakeholders can be further classified as
Internal
Owners and employees
Those who have a close and dependent relationship with the business and a vested interest in its success
Market
Suppliers and custmers
Those who have a direct trading relationship with the business
External
All other stakeholders of the business with either direct (eg banks) or indirect (eg government, environmental) relationships with and expectations from the bsuiness
Johnson (2017) suggested that the two core dynamics are the ability to disrupt and the levels of interest that the stakeholder would take in its 'stake'
Low power to disrupt the business with a low interest in the business = minimal effort required by the organisation
Low power to disturb the business with high interest in the business = stakeholders must be kept informed
High power to disrupt the business with low interest in the business = stakeholders must be kept satisfied
High power to disrupt the business with high interest in the business = these are the key players
The strategic journey of an organisation can be significantly influenced by the forces of stakeholders and others, this is often referred to as the politics of power
In any organisation, as time evolves, the power balance is likely to shift. In a fast moving organisation with many demanding stakeholders, this could mean frequent changes of strategic focus which can lead to disruption and chaos
When undertaking a stakeholder mapping exercise, it is useful to look at and understand the origin and indicators of the differing powers that might be at play
Position
Autocracy, right and ability to influence behaviour (eg seniority)
Resource
Control over a key required asset (eg raw materials)
Task
The awareness of how to complete a task (eg IT)
Expertise
Professional or other abilities (eg finance)
Information
Wider detail and understanding (eg why rather than what)
Vision
End-game understanding (eg the bigger picture)
Values
Moral character (eg personal ethics)
Argument
The ability to debate (eg persistency and focus)
Judgement
The power to decide (eg which route to take)
At the traditional end of the dynamic it is much harder for a stakeholder to influence the strategic direction of an organisation which is probably focused around a rational strategic approach
In a more empowered organisation, there is more likely to be an emergent and collective approach to strategic development and therefore a greater ability for stakeholder influence
The need for stakeholder analysis
It is necessary to recognise the core focus that are continually impacting the organisation and its stakeholders
The law
is the starting point and the benchmark for the political demands that underpin the structure of the society where an organisation is operating and the limitations of those empowered with governance
Best practice
Codes, guideliens, customer expectations, 'what others do' - the perception of the organisation and its stakeholders as to the presumed behaviour of both the business and those empowered with its governance
Societal expectation
In a media-driven world of instant communication the ever changing expectations of wider society may often lead an organisation and its stakeholders to adapt both its governance and its strategy to be seen to be 'ticking the appropriate boxes'
Visbility
The perpetual dichotomy that exists between what we are wiling and able to reveal about out organisation, its governance and its strategic direction