Canadian Business and Society:
Ethics & Responsibilities
Chapter
Three
Identifying Stakeholders
and Issues
Copyright © 2008 McGraw-Hill
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Chapter Outline
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Stakeholder: Definition
Identifying Stakeholders
Managers’ Responsibilities
Opposition to Stakeholder Concept
Argument for Stakeholder Concept
Issues Management
Issues Management Process
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Stakeholder: Definition
 An
individual, or group, who can
influence and/or is influenced
by the achievement of an
organization’s purpose.
Source: Freeman, 1984
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Discussion Questions
Why are stakeholders important to a
firm?
 What can happen to the firm if
managers do not properly identify and
satisfy the interests of their firm’s
stakeholders?
 Do stakeholders have differing goals
and power/influence over time?
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Identifying Stakeholders
Owners
 Directors
 Employees
 Customers or consumers
 Lenders and creditors
 Suppliers
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Identifying Stakeholders
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Service professionals
Dealers, distributors, and franchisees
Business organizations
Competitors
Joint-venture participants
Non-governmental organizations
Society at large
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Identifying Stakeholders
Educational institutions
 Religious groups
 Charities
 Service, fraternal, cultural, and ethnic
associations
 The media
 Government
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Managers’ Responsibilities
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Identify stakeholders
Understand how corporation currently views
stakeholders
Examine how each stakeholder will or might
influence firm
Assess opportunities and threats
Rank stakeholders by influence
Prepare programs or policies detailing how to
cope with stakeholders
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Opposition to Stakeholder Concept
Problems of categorization (e.g., how to
identify and prioritize stakeholders)
 Challenges in meeting expectations
(e.g., tradeoffs among the stakeholders)
 Dilution of top management focus (e.g.,
away from financial performance)
 Impracticality of shared governance
(e.g., focus still on shareholders)
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Argument for Stakeholder Concept
Simply good business
 Ignoring stakeholder interests can have
substantial economic consequences
(e.g., employees, customers, lenders,
etc.)
 Provides more systematic approach to
recognizing stakeholder expectations
and deciding how to respond
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Issues Management: Definition
A
systemic process by which the
corporation can identify, evaluate,
and respond to those economic,
social, and environmental issues
that may impact significantly upon
it.
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Advantages to issue management
Maintain a competitive advantage
 Actions are more likely to be consistent
with social expectations
 Less likely to make social/ethical
mistakes
 When response is quicker, vulnerability
is reduced and credibility is enhanced.
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Issues Management
 Issues
Life Cycle Stages:
– Degree of awareness of issue over
time (none or little; increasing;
prominent; peak; declining)
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Issue Life Cycle
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Six Characteristics in T1
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6.
The terms of the debate cannot yet be clearly
defined.
One of the actors will define the emerging issue and
make it a current issue.
It deals with matters of conflicting values and
interests.
It is not a problem that expert knowledge will
automatically be able to resolve.
It is stated in value-laden terms.
Trade-offs are possible.
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Issues Management Process
1.
2.
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Identification of issues
Analysis of issues
Ranking or prioritizing of issues
Formulating issue response
Implementing issue response
Monitoring and evaluating issue
Sources: Carroll, 1989; Bryson, 1988
response
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