Stakeholders stakeholder expectations and organisational purposes

1. Stakeholders stakeholder expectations and organisational purposes

2. Objectives • Students are to be able to evaluate the power and levels of a variety of pertinent stakeholders of organisations. • Students are to be able to evaluate the interest levels of a variety of pertinent stakeholders of organisations. • Students are to be able to use their evaluation of the power and interest levels of a variety of pertinent stakeholders of organisations, to show how strategies can impact upon and be impacted upon by a variety of stakeholder groups. • Students are able to show how management styles play a role in stakeholdering.

3. Expectations and purposes Resources, competences and capability The environment Strategic analysis Bases of strategic choice Organisation structure and design Strategic choice Strategy implementation Resource allocation and control Strategic options Strategy evaluation and selection Managing strategic change Exhibit 1.4 A summary model of the elements of strategic management

4. Corporate governance • Whom should the organisation serve? • How should purposes be determined? • Business ethics • Which purposes should be prioritised? • Why? • Organisational purposes • Mission • Objectives • Cultural context • Which purposes are prioritised? • Why? • Stakeholders • Whom does the organisation serve? Exhibit 5.1 Influences on organisational purposes

5. STAKEHOLDERS • “Those who depend on the organisation for the realisation of some of their goals and in turn the organisation depends on them for the full realisation of its goals” • Customers • Competitors • Government • Suppliers • The community • Employees • Lenders

6. CORPORATE GOVERNANCE AND STAKEHOLDERS • Shareholders • widespread or close? • institutional intermediaries? • bankers? • cross-shareholding? • Employees • Co-determination, shareholders or employees? • Lenders • partners or “contractors”? • Customers • Caveat Emptor, market pressure or regulation?

7. (a) Within organisations Hierarchy (formal power), e.g. autocratic decision making Influence (informal power), e.g. charismatic leadership Control of strategic resources, e.g. strategic products Possession of knowledge and skills, e.g. computer specialists Control of the environment, e.g. negotiating skills Involvement in strategy implementation, e.g. by exercising discretion (b) For external stakeholders Control of strategic resources e.g. materials, labour, money Involvement in strategy implementation, e.g. distribution outlets, agents Possession of knowledge (skills), e.g. subcontractors Through internal links, e.g. informal influence Exhibit 5.6a Sources of power

8. (a) Within organisations Status Claim on resources Representation Symbols (b) For external stakeholders Status Resource dependence Negotiating arrangements Symbols Exhibit 5.6b Indicators of power

9. Growth vs profitability • Short term vs investment • Control vs professional managers • Ownership vs funding • Ownership vs accountability • Efficiency vs jobs • Mass appeal vs quality Exhibit 5.3 Some common conflicts of expectations

10. LEVEL OF INTEREST POWER Exhibit 5.5 Stakeholder mapping: the power/interest matrix Source: Adapted from A. Mendelow, Proceedings of the Second International Conference on Information Systems, Cambridge, MA, 1991

11. STAKEHOLDER MAPPING- SOME GUIDELINES • Positioning related to specific strategies • Stakeholders may need to be sub-divided • Distinguish the role for the individual • Identify “political” priorities by: • plot how stakeholders would line up • plot how stakeholders would need to line up • identify mismatches • include key maintenance activities

12. STAKEHOLDER MAPPING- ‘test’ questions Power “If I were to pursue this strategy with disregard to the views of this stakeholder could they stop me?” Interest “How high is this strategy in their priorities - are they likely to actively support or oppose this strategy?”

13. STAKEHOLDER MAPPING - typical maps

14. Management Styles We need to consider how management styles differ when dealing with each stakeholder group

15. Level of interest Power Stakeholders and management styles

16. STYLE MEANS/CONTEXT BENEFITS PROBLEMS CIRCUMSTANCES OF EFFECTIVENESS Education and Group briefings assume Overcoming lack of Time consuming communication internalisation of strategic (or mis)information Direction or progress logic and trust of top may be unclear management Collaboration/ Involvement in setting the Increasing ownership Time consuming participation strategy agenda and/or of a decision or Solutions/outcome resolving strategic issues process May improve within existing by taskforces or groups quality of decisions paradigm Intervention Change agent retains Process is Risk of perceived Incremental or non-crisis co-ordination/control guided/controlled manipulation transformational change delegates elements of but involvement change takes place Direction Use of authority to set Clarity and speed Risk of lack of Transformational change direction and means of acceptance and ill- change conceived strategy Coercion/edict Explicit use of power May be successful in Least successful Crisis, rapid through edict crises or state of unless crisis transformational change confusion or change in established autocratic cultures Incremental change or long-time horizontal transformational change Exhibit 11.6Styles of managing strategic change

17. Activity • Read Johnson & Scholes (1999) section 5.3.2 of the text and illustration 5.4 for practical advice on how to undertake a stakeholder mapping. AND • Carry out a stakeholder mapping exercise for the Granada buy out of Forte Hotels. Support this with researched evidence (newspaper articles, journal articles, web searches etc.) Bring it to the seminar for discussion. OR • Read the Sheffield Theatres Trust case study on page 670-84, Johnson & Scholes, 1999, Exploring Corporate Strategy 5th Ed. And carry out a stakeholder mapping exercise. OR • Carry out a stakeholder mapping exercise for an hospitality/tourism organisation and strategy/scenario of your choice. Support this with researched evidence (newspaper articles, journal articles, web searches etc.) Bring it to the seminar for discussion.

18. MORETON UNIVERSITY A case study

19. COMPUTER SERVICES - ‘monopolist’ strategy Map A - current situation (1998) LEVEL OF INTEREST Low High A Students B Director A (+) Competitor X (-) Principal F (-) Low POWER C Funding Body Director E Director S D Director C (-) Vice Chancellor (0) Chairman (-) High

20. COMPUTER SERVICES - ‘monopolist’ strategy Map B - the preferred situation LEVEL OF INTEREST Low High A Students B Competitor X (-) Principal F (0) Low POWER C Funding Body Director E Chairman D Director A (+) Director S (+) Director C (-) Vice Chancellor (+) High

21. MORETON UNIVERSITY- political priorities (monopolist strategy) • Dilute power of Director ‘C’ • Lobby Directors ‘E’ and ‘S’ to increase interest • Director ‘A’ now on Governing Body • Inform Chairman of difficulties elsewhere • Improve service to colleges - silence Principal ‘F’

22. MORETON UNIVERSITY - assessment of power

23. The Political Battleground + + + - - -

24. The Dream Ticket + + + + + +

25. The Potential Lost Cause - - - - - -

26. The Lone Champion +

27. The Dogged Opponent __

28. The Political Trap ? ? ? ? ? ?

29. The Worthy Cause + + + + + +

30. The Political Timebomb - - - - - -

31. The Autocrat’s Dream ? ? ? ? ? ?