Stakeholder Management

Stakeholder Management

• Organizations must consider and engage with all people and groups legitimately interested in their activities.
• Legitimacy means being accountable for financial performance and societal impact.

Reasons for Stakeholder Engagement

• Instrumental reasons: Engaging with stakeholders benefits the organization financially.
• Normative reasons: Doing what is morally right and fair, regardless of financial benefit.

The Nature of Stakes and Stakeholders

• Stakeholder: Any group/individual who can affect or is affected by organizational objectives.
• Stake: An interest/share in an undertaking, ranging from simple interest to legal ownership.

Three Types of Stakes

• Equity stakes: Direct ownership (shareholders, directors).
• Economic/market stakes: Economic interest but no ownership (employees, customers, suppliers, competitors).
• Influencer stakes: No economic or ownership interest, but have interests (consumer advocates, environmental groups, government).

Defining Issues

• Issue: A public concern about an organization's decisions that may involve conflict.
• Crisis: An issue requiring immediate and decisive action.

Managing Issues

• Issues can develop into crisis
• Managing issues involves preventing latent and active issues from escalating.
• Environmental scanning: Use DESTEP and/or SWOT analysis.
• Issue identification and analysis: Determine issue intensity, likelihood of triggering action, ability to influence, and key stakeholders.
• Position-importance matrix: A useful device to assist with issue analysis.
• Communication practitioners should identify the issue stage to influence opinion favorably.
• There are four response strategies depending on the intensity and importance of the issue
  • Buffering: Delay issue development.
  • Bridging: Adapt to stakeholder expectations.
  • Advocacy: Change stakeholder opinions through campaigns and lobbying.
  • Thought leadership: Proactively lead in handling emergent issues.
• Evaluation: Assess issue development and changes in stakeholder opinions.

Crisis Management

• Organizations can effectively deal with and even avoid crisis scenarios with anticipation and resilience
• Anticipation: Predict and prevent potential crises by consulting stakeholders and tracking social media for 'paracrises'.
• Resilience: Cope with a crisis by improvising and acting mindfully to minimize impact.
• Organizations develop crisis contingency plans in advance
  • Stage 1: Minimal planning for emergency response.
  • Stage 2: Extensive planning for natural disasters and human errors.
  • Stage 3: Extensive contingency plans and personnel training for probable crises.
  • Stage 4: Organization-wide consultation on potential crises and stakeholder impact.
  • Stage 5: Incorporates all previous stages with environmental scanning and early warning systems.

Communicating About a Crisis

• Crises are classified based on internal-external and intentional-unintentional dimensions.
  • Faux pas: Actions unknowingly transformed into a crisis by external actors.
  • Accidents: Unintentional events during normal operations (product defects, injuries, natural disasters).
  • Transgressions: Intentional acts placing stakeholders at risk (selling defective products, withholding safety information).
  • Aggression: Intentional acts by external agents to harm the organization.
• Crisis classification informs appropriate communication strategies.
• Strategy choice depends on perceived organizational responsibility.

Crisis Communication Strategies

• Non-existence strategies:
  • Denial: Denying the existence of a crisis.
  • Clarification: Explaining why there is no crisis.
  • Attack and intimidation: Confronting those claiming a crisis exists.
• Distance strategies:
  • Excuse: Scapegoating others for the crisis.
  • Downplay: Minimizing the severity of the situation.
• Association strategies:
  • Bolstering: Reminding of positive aspects to offset negatives.
  • Transcendence: Associating crisis with a higher goal.
• Suffering strategy:
  • Victimization: Portraying the organization as a victim.
• Acceptance strategy:
  • Full apology: Accepting blame and apologizing.
  • Remediation: Offering compensation to victims.
  • Repentance: Asking for forgiveness.
• Accommodative strategy:
  • Rectification: Taking corrective action to prevent recurrence.

Journalism and News Organizations

• News production involves journalists and editors.
• Journalists consult sources and write stories.
• Editors edit stories based on news routines.
• News routines and media logic influence reporting.
• Media logic reflects normative principles and values.
• Ideology affects news coverage of organizations.

Effects of News Coverage on Corporate Reputation

• Media coverage impacts reputation by highlighting issues.
• Agenda-setting theory: Media's frequency of reporting determines issue salience.
• Agenda-setting theory distinguishes two levels:
  • First level: Salience of an organization.
  • Second level: Influence on how people think about a topic.
• Corporate practitioners are crucial to the formation of media agenda.
• This process is described as agenda building, which involves discussions and debates
• News coverage results from interactions between corporate communicators and journalists.

Media Relations Tools

• Practitioners use press releases, conferences, interviews, online newsrooms, media monitoring, and research.
• Press releases: Transfer news to journalists, aligning frames.
• Press conferences: Allow journalists to ask questions.
• Interviews: Practitioners offer advice and training for spokespersons.
• Online newsrooms: Provide standard reports, videos, news feeds.
• Media monitoring and research:
  • Gate-keeping research: Analyzes press release characteristics for news appearance.
  • Output analysis: Measures exposure and tone of media coverage. Share-of-voice: Compares to competitors.

Defining Employee Communication

• Traditionally internal, but now blurred by technology.

Areas of Employee Communication

• Management communication: Between manager and subordinates, related to tasks, morale, and wellbeing.
• Corporate information and communication systems (CICS): Broadcast corporate decisions to all employees.
• Management communication is interpersonal and work-setting specific.
• CICS relates to general organizational developments.
• Both complement each other in ensuring vertical and horizontal information flow.
• Complementary nature understood through downward and upward communication:
  • Downward: Information from top management about mission and policies.
  • Upward: Information from employees to managers, improving performance.

Employee Communication and Organizational Identification

• Organizational identification: Perception of oneness with the organization.
• Higher external prestige and identity overlap increase identification.
• Employee involvement in decisions impacts identification.
• Good communication combines upward and downward flow, impacting decisions.

Voice, Silence, and Stimulating Employee Participation

• Voice, silence, and employee participation refer to employee input and involvement.
• Employee participation involves empowering employees.
• Organizational silence prevents participation, withholding information.
• Factors causing silence:
  • Managers' fear of negative feedback.
  • Managerial beliefs that they know best.
• Organizational silence blocks negative feedback and error correction.
• Organizational silence related to communication climate.
• Communication climate: Internal environment of information exchange.
  • Open climate: Information flows freely.
  • Closed climate: Information is blocked.

Social Media, Networks, and Communities of Practice

• Downward and upward communication reflect hierarchy.
• Organizations use social media to support teamwork and communication.
• Enterprise social media (ESM) facilitates communication within organizations.
• ESM complements traditional CICS.
  • ESM refers to web-based platforms

Strength of Weak Ties

• Weak ties bring fresh perspectives and innovation.
• Community of practice: A group informally bound by common interests.

Defining Leadership and Change

• Leadership is an acquired ability to communicate and influence others.
• Effective leaders articulate inspiring visions and foster interactions.
• Two types of leadership style:
  • Transactional: Motivates through rewards for performance.
  • Transformational: Empowers employees and supports growth.
• Organizational changes are classified by degree.
  • Radical change: Complete re-orientation.
  • Convergent change: Fine-tuning existing orientation.
• Change can be additive or substitutive.

Defining Corporate Social Responsibility

• Corporate citizenship: Activities to fulfill perceived duties as members of society.

CSR Approaches

• Defensive Approach: mitigating negative impacts and managing crises
• Charitable Approach: community relations activities
• Promotional Approach: PR campaigns and events to enhance image
• Strategic Management Systems: integrating CSR efforts into business strategies
• Transformational Business Models: CSR ingrained in organizations business model