4 Stakeholders
What Are Stakeholders and Why Do They Matter?
• Stakeholder is any group or individual that can affect or is affected by the achievement of
an organization’s objectives.
• Why should a company be concerned about properly managing relationships with
stakeholders?
Stakeholder Categorization and Attributes
• Primary stakeholders are typically directly linked to a company’s survival and are either
impacted or impact companies directly.
o Examples of primary stakeholders include customers, suppliers, employees, and
shareholders.
Shareholder Attributes: Power, Legitimacy, and Urgency
• Stakeholder power refers to the ability of a stakeholder to exert pressures to force a
company to make changes to accommodate such pressures.
o Utilitarian power refers to the use of financial or other monetary means to force a
company to accommodate a particular stakeholder need.
▪ Use of money or boycott.
• Legitimacy: company conducts itself in such a way that is consistent with widely held
values and beliefs.
Stakeholder Management
• Stakeholder management refers to the deliberate and purposeful process a company has
devised to work with its stakeholders.
• Why is stakeholder management critical?
Steps of the Stakeholder Management Process
• Step 1—Stakeholder identification: a company needs to determine and understand which
stakeholders have the ability to affect the organization.
• Step 2—Stakeholder prioritization
o Salience: influence any stakeholder can have on a company’s operations.
▪ Discretionary stakeholders are those that have legitimacy but no power or
urgency.
o Expectant stakeholders are those that possess two of the attributes.
▪ Dominant stakeholders represent stakeholders that are both powerful and
legitimate.
o Definitive stakeholders have power, urgency, and are legitimate.
• Step 3—Stakeholder visualization and mapping: a simple way to visualize stakeholders
to determine appropriate responses is to construct the power and urgency matrix.
Stakeholder Importance Worldwide
• Which stakeholders are considered most important?