Strategic Management: A Stakeholder Approach (Pitman Series by R. Edward Freeman

By R. Edward Freeman

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Conflict within each person and among group members may result. :,~ &ffrr,~,n~ ~d c o ~ ~ f expectationS c ~ g of corporzle action. For certain organizations and stakeholder groups, a "stakeholder role set" analysis may be appropriate. 4 is an example of the stakeholder role set of employees and a government official. ' XYZ Company found that one of their Unions was also a large contributor to an adversarial consumer advocate group who was pressuring a key government agency to more closely regulate XYZ.

Successful transactions with stakeholders are built on understanding the "legitimacy" of the stakeholder and having processes to routinely surface their concerns. However the transactions themselves, must be executed by managers who understand the "currencies" in which the stakeholders are paid. There is simply no substitute for thinking through how a particular individual can "win" and how the organization can "win" at the same time. Clearly, there must be some "fit" among the elements of an organization's Stakeholder Management Capability - defined as its understanding or conceptual map of its stakeholders, the processes for dealing with these stakeholders, and the transactions which it uses to carry out the achievement of organization purpose with stakeholders.

The formality of most strategic review processes and the mixing of personal and business evaluation make it difficult for the division manager to pay attention to multiple stakeholder concerns, which may contradict established corporate wisdom about the factors for success in a particular business. The nature of the organizational beast is such that it doesn't like and doesn't reward bad news and can hardly tolerate innovation. S. ) It is much easier to play "Blame the Stakeholder" after the fact.

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