Reference no: EM131207779

PLEASE RESPOND, AND ANSWER EACH OF THE FOLLOWING QUESTIONS OR POST STATEMENTS. MUST BE 150 WORDS (PLEASE), WRITE IN 3RD PERSON.ONLY ONE REFERENCE CAN BE USED FOR EACH ANSWER.

DQ 1

Current trends indicate that for-profit companies are paying close attention to stakeholder interests. How much influence should stakeholder interests exert over a for-profit company? Why?

DQ 2

Stakeholder interests in an organization can be quite varied, and there may be many times when these interests do not coincide. What is the best way for a for-profit organization to manage these conflicting needs? Why?

Stakeholders in For-Profit Corporations

Introduction

Corporations today, more than in any time in recent history, are becoming more cognizant of the needs, desires, and wishes of stakeholders. Developing a strong relationship with stakeholders adds value to the corporation. This does not happen without developing a relationship that moves in both directions. Leaders need to learn the identities of their stakeholders since these individuals and groups are increasingly aware of the effects of corporate decisions on their communities. Communities are also becoming more keenly aware of the effects of corporate decisions on their constituents.

Stakeholder Opinions

Stakeholder opinions drive the success or failure of corporate projects more than any other influence in today's environment. Thus, it is critical to gather rich and usable data. Developing a keen understanding of internal and external stakeholder drivers should be an integral part of every corporation's strategic design. Gathering and acting on these opinions is typically driven by midlevel managers. Lawrence and Weber (2010) state that managers make good decisions when they pay attention to the effects of their decisions on stakeholders as well as to stakeholder effects on the corporation. These managers are the ones who know who the identities of the key stakeholders and are in a position to take the most direct actions as a result of their findings. Learning about and exploiting this data provides keen insight into how these stakeholder groups can benefit each other, emphasizes and directs plans made by the corporation, and influences decisions necessary to compete in today's changing environment.

Drivers for Stakeholder Value

By concentrating on the development of wealth, a corporation typically meets the needs of the stakeholders. While there is no clear evidence that all stakeholders are driven by profit, both dividends and overall success are important factors (Boatright, 2006). Corporations must continuously seek to find balance between the ethical management of the corporation, meeting the needs of their stakeholders, and their overall financial success.

One of the best ways for corporate planners to do this is to become familiar with the needs and driving influences of their stakeholders. However, Boutelle (2004) further states that, while understanding stakeholder needs and goals is certainly necessary, it is often does not provide enoughinformation for the corporation to operate effectively. In addition to understanding stakeholder needs and perspectives, the corporation needs to incorporate the goals and perspectives of their various stakeholders into operating plans and objectives in order to achieve stakeholder buy-in and be considered a success in the corporate workplace. Typically, this task falls upon midlevel managers who are also tasked with the allocation of resources by balancing costs, benefits, and risks and gaining commitment of their wide constituency of stakeholders. This task is complex and difficult because many options are present, benefits and risks are rarely expressed as single objectives, multiple stakeholders with different agendas compete for limited resources, individually optimal resource allocations to internal units are rarely collectively optimal, and those dissatisfied with the decisions taken may resist implementation (Phillips & Bana e Costa, 2007). To this end, developing a keen understanding of these various drivers and needs is critical to the decision-making process. The most efficient way to develop this knowledge is to gather information through a stakeholder analysis

Stakeholder Analysis

Boutelle (2004) asserts that stakeholder analysis serves a dual purpose. Information gleaned from stakeholder analysis is helpful in creating solutions that are appropriate to the business context. It is also a critical tool for understanding what drives the stakeholder. This analysis can be conducted internally as well as externally, identifying internal stakeholders as the customer as well as external stakeholders. This is important for making sure that organizational goals and decisions are in concert with everyone involved. Stakeholder analysis also helps gain greater acceptance of corporate decisions. This acceptance can be realized even if the analysis does not lead to the creation of new corporate solutions. Stakeholder analysis assists in anticipating reactions to a specific project, and building into the plans the actions that will help win support for the project. This often ensures that, with proper planning, stakeholders have an opportunity to "buy in" to the project. Conducting stakeholder analysis early in the project gives the corporation a chance to anticipate potential objections and address them directly at the outset of the project. An additional benefit is that stakeholders are not surprised when shown the results of a project and can typically recognize their own input into the project. This personal investment makes them more likely to accept the results.
The use of historical and current data gathered in a myriad of manners results in a clear and complete picture from both sides. However, it is important to realize that gathering data without a direct need does nothing to promote the analysis process. It is critical in the planning stages to develop a plan and to identify the need and the pivotal question that the data will address. It is also critical to develop formal controls and structures which will serve as the structure while the baseline is established. Moreover, whereas formal controls and structures depend heavily on data management, including: information systems, measurement systems, resource allocation procedures, and the budgeting processes, the use of the data must be maintained, controlled, and enhanced as time progresses (Morris, 1997).

Steps in Stakeholder Analysis

1. Identify organizational stakeholders. It is critical to identify those individuals or groups that have a direct impact on the corporation, as they or their representatives must be included while gathering information. Stakeholders come from any and all areas of the business and the community (Boutelle, 2004). One method used to identify key internal stakeholders is to examine organizational challenges in a particular project. Discussing community concerns may develop a better understanding of external stakeholders. Organizational or community charts can be of some help, but are often not fully representative of patterns of influence to a corporation.

2. Meet with Stakeholders. At this point, a meeting with the stakeholders who are most visible to ask for their assistance is recommended. These initial stakeholder meetings can help identify other stakeholders. In each of the initial meetings, inquire of the participants who else might be affected by the project or might have a strong opinion about it. Arrange to meet with those individuals or group representatives. This not only includes stakeholders in the planning process but also affirms the value of their opinions.

3. Prioritize stakeholders. When meeting with stakeholders, it is important to take notes that estimate stakeholder influence and interest in the project, specify the overall stakeholder goals, and identify objections to the project. Since qualitative data can be cumbersome yet highly valuable, it is helpful to develop a strong data management tool such as a list or chart, in which the data is clearly organized and visible. Boutelle (2004) proposes a version of the following table template as a simple tool that can be of great value during the stakeholder analysis.

Table 6.1: Stakeholder Perspectives

Stakeholder	Position	Influence   (10= high, 1=low)	Interest in Project (High, Medium, Low)	Goals	Objections to Project

4. Understand stakeholder perspectives.A good way to understand stakeholders is to conduct semistructured interviews. Broad, open-ended questions can be a good way of starting a conversation with stakeholders. Asking about ways that the project might go right, ways that it might go wrong, and what sources of data are available can be a good way of directing the conversation towards collaborative problem solving (Boutelle, 2004). If a stakeholder has strong opinions about the project, it will come through during the conversation. Follow-up questions should focus on design alternatives or solutions to the problems raised by the stakeholder.

5. Incorporate stakeholder perspective into design.Part of the benefit of stakeholder interviews is reaped by taking them seriously. It is not just important to gather data but to ask the right questions and to clearly and visibly follow through with action based on the learned information. It is an intense breach of protocol to hold stakeholder meetings, gather data, and then fail to provide evidence that the opinions garnered matter enough to the corporation to take serious action based on the information shared. Meeting with, talking to, and demonstrating the value of all stakeholders involved can provide a rich understanding of the corporate strategy, interdepartmental dynamics, and challenges a company faces. This perspective will quite naturally seep into future proposed projects (Boutelle, 2004).

Benefits of stakeholder analysis

There are many benefits of conducting stakeholder analysis. The greatest benefit of stakeholder analysis is that recommendations are more likely to gain acceptance. By conducting stakeholder analysis early in the process and getting feedback on the recommendations, stakeholders are involved early and consent and cooperation are easier to obtain. By incorporating ideas and recommendations at this point, conflicts occur less often. Next, by spending time understanding stakeholder perspectives, recommended solutions are more likely to be in tune with business requirements and goals. Finally, through the analysis process, stakeholders gain familiarity with the direction of the organization. Meeting with stakeholders allows organizations to find a way to familiarize stakeholders with corporate goals and methods. This benefits the success of future projects and builds relationships that stand the test of time and effort. Establishing a solid relationship with stakeholders creates corporations that are well supported when the need arises (Applegate, n.d.; Boutelle, 2004).

Conclusion

Knowing what stakeholders want and need should be a vital part of every corporation's strategic plan. The key lies not only in the questions asked, but also in who conducts the interviews. Often midlevel managers are the ones most heavily involved. They are the ones closest to the work, and their perspective allows for the richest data. They know what is required to successfully complete the projects at hand, the identity of the stakeholders, and how to contact them. Most often this information is gathered through some sort of stakeholder analysis tool. Stakeholder analysis is an effective mechanism for bringing other perspectives into the corporation. Though a myriad of methods and techniques for understanding users has been implemented, direct talk has always been the most effective. Stakeholder analysis is an effective way to expand the focus and include the perspectives of those who affect and are affected by proposed projects.

References

Applegate, L. (n.d.) Stakeholder analysis tool. Harvard Business School Note, 803-171.
Boatright, J. R. (2006). What's wrong-and what's right- with stakeholder management. Journal of Private Enterprise, 21(2), 1-25. Retrieved from https://www.apee.org/pdf/BoatrightSpec.pdf.
Boutelle, J. (2004). Understanding stakeholders for design success. Retrieved fromhttps://www.boxesandarrows.com/view/understanding_organizational_stakeholders_for_design_success.
Lawrence, A. & Weber, J. (2011). Business and society: Stakeholders, ethics, and public policy. (13th ed). New York, NY: McGraw Hill.
Morris, S. A. (1997). Internal effects of stakeholder management devices. Journal of Business Ethics, 16(4), 413-424.
Phillips, L. D., & Bana e Costa, C. A. (2007). Transparent prioritization, budgeting and resource allocation with multi-criteria decision analysis and decision conferencing. Annals of Operations Research, 154(1), 51-68. doi: 10.1007/s10479-007-0183-3.