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CHAPTER 2
MANAGING PUBLIC ISSUES AND
STAKEHOLDER RELATIONSHIPS
INTRODUCTION
Businesses today operate in an ever-changing external environment, where effective
management requires anticipating emerging public issues and engaging positively with a
wide range of stakeholders. Whether the issue is growing concerns about climate change,
water scarcity, child labor, animal cruelty, or consumer safety, managers must respond to
the opportunities and risks it presents. To do so effectively often requires building
relationships across organizational boundaries, learning from external stakeholders, and
altering practices in response. Effective management of public issues and stakeholder
relationships builds value for the firm.
PREVIEW CASE
Antibiotics and Food Safety
CHAPTER OUTLINE
I. PUBLIC ISSUES
II. ENVIRONMENTAL ANALYSIS
Teaching Tip: Preview Case
This issue is on-going, so it may be a good exercise for students to
research which additional companies have joined the “antibiotics”
bandwagon and moved to provide safer food products. This also may
be a good case to apply many of the public issues management tools
that follow in the chapter, e.g., performance-expectations gap or
environmental analysis.
For a good video to explain the history and current state of antibiotics
in our food see:
http://www.bing.com/videos/search?q=antibiotics+in+our+food+video
s&FORM=VIRE1#view=detail&mid=FB64BAC64CB6B02FA750FB
64BAC64CB6B02FA750.
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A. Competitive Intelligence
B. Stakeholder Materiality
III. THE ISSUE MANAGEMENT PROCESS
A. Identify Issue
B. Analyze Issue
C. Generate Options
D. Take Action
E. Evaluate Results
IV. ORGANIZING FOR EFFECTIVE ISSUE MANAGEMENT
V. STAKEHOLDER ENGAGEMENT
Teaching Tip: Eight Strategic Radar Screens
The “eight strategic radar screens” is a useful tool for nearly any case.
The instructor may want to introduce a case from the end of the book,
before launching into a more elaborate analysis later in the semester
using the same case, since the radar screens can provide an overview of
the major forces engaged in the case. Or, a local situation from the
community or campus might be a good focus for applying the radar
screens.
Teaching Tip: Stakeholder Materiality
This emerging notion comes out of corporate practice. Students may
be assigned to search for companies, other than Symantec, that use this
tool. The instructor may want to apply this tool to a case used earlier in
the semester. Or, this tool is implicitly used to organize and prioritize
the many demands on us in our daily lives.
Teaching Tip: Issue Management Process
This is another opportunity where a current issue on campus, in the
local community, or on the national or international stage could be used
for students to analyze how this issue is progressing or has progressed
through the issue management process.
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A. Stages in the Business-Stakeholder Relationship
B. Drivers of Stakeholder Engagement
o Goals
o Motivation
o Organizational Capacity
VI. STAKEHOLDER DIALOGUE
A. Stakeholder Networks
B. The Benefits of Engagement
GETTING STARTED
KEY LEARNING OBJECTIVES
LO 2-1: Identifying public issues and analyzing gaps between corporate
performance and stakeholder expectations.
A public issue is an issue that is of mutual concern to an organization and one or
LO 2-2: Applying available tools or techniques to scan an organization’s multiple
environments and assessing stakeholder materiality.
LO 2-3: Describing the steps in the issue management process and determining how
to make the process most effective.
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LO 2-4: Identifying the managerial skills required to respond to emerging issues
effectively.
LO 2-5: Understanding how businesses can effectively engage with their
stakeholders, what drives this engagement, and the role social media can play.
Stakeholder engagement involves building relationships between a business firm and
LO 2-6: Recognizing the value of creating stakeholder dialogue and networks.
KEY TERMS
competitive intelligence
environmental analysis
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INTERNET RESOURCES
DISCUSSION CASE
COCA-COLA’S WATER NEUTRALITY INITIATIVE
Discussion Questions
Teaching Tip: Discussion Case Video
The PBS News Hour aired an 8-minute segment November 17, 2008,
entitled “Coca Cola, Indian Farmers Compete for Water Supply.” In
the segment, correspondent Fred de Sam Lazaro goes to India to
interview a farmer, an environmental activist, and the president of Coca
Cola India about the controversy over the company’s use of water
there. These events helped prompt Coca Cola’s development of a new
water policy, as described in the discussion case. The segment may be
used to introduce the case. A full transcript of the segment is available
at: www.pbs.org/newshour/bb/asia/july-dec08/waterwars_11-17.html.
The segment is available on streaming video at the PBS web site.
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The chapter defines a public issue as “any issue that is of mutual concern to an
organization and one or more of its stakeholders... They are typically broad issues,
The chapter defines a performance-expectations gap as a gap between what a firm
wants to do or is doing and what stakeholders expect. In this example, The Coca-
2. If you applied the strategic radar screens model to this case, which of the eight
environments would be most significant, and why?
environment, competitor environment, economic environment, technological
company. Customers had also expressed concern about product safety.
3. Apply the issue management life cycle process model to this case. Which stages
of the process can you identify in this case?
the model. The company had identified water as essential to its business, because it
used extensive amounts both as an ingredient in its products and in the manufacturing
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company decided to take—a water neutrality initiative. Finally, the case describes
the company’s efforts to evaluate its results and to share the results of this evaluation
with others.
4. How did TCCC use stakeholder engagement and dialogue to improve its
response to this issue, and what were the benefits of engagement to the
company?
The case provides evidence that the company engaged in dialogue with both internal
meetings were productive.
5. In your opinion, did TCCC respond appropriately to this issue? Why or why
not?
The company responded appropriately by declaring a goal of water neutrality. That