Assessing Stakeholder Salience
through the view of Lean
Enterprise Transformation
Gwendolyn Sisto
SM 2010 Aero-Astro
September 9, 2010
Thesis motivation
1.
Desire to elucidate connections between stakeholder salience
and Enterprise Architecture (EA). Specifically with respect to
transformations (ie dynamic view of the enterprise)
2. Significant for practitioners to carry-out successful transformation
•
Second Principle of Lean Enterprise Thinking: Identify
relevant stakeholders and determine their value propositions
(Nightingale 2009)
•
Enterprises that are better at engaging the structural, and
cultural aspects are more successful at Lean value creation
(Roth 2006)
Key Definitions
•
•
•
•
•
•
•
•
•
•
Three Lenses(Carroll 2002)
Stakeholder -" any group or individual who can affect or is
affected by the achievement of the organization's
objectives“ (Freeman 1984).
Salience - “the degree to which managers give priority to
competing stakeholder claims” (Mitchell 1995)
Power, Legitimacy, and Urgency- (1) power to influence
the firm, (2) legitimacy of relationship with the firm, and (3)
the urgency of the stakeholder's claim on the firm (Mitchell
1995)
Saliency is dynamic- stakeholder influence is dependent
on life cycle stage(Jawahar 2001)
Epochs and Era’s – context and time space (Rhodes,
Ross, Nightingale 2009
Corporate Social Responsibility
Core Ideology (Collins ad Porras 1996)
Institutional and Resource dependency (Oliver 1991)
Network versus dyadic behavior of stakeholders (Rowley
1997)
Literature Review
Research Question
How do the most salient enterprise
stakeholders affect the Enterprise’s
Architecture (EA)?
Relevant Body of work
Rationale
LAI Research
Provides EA framework
Enterprise thinking and
industry challenges
Context for research motivations
Stakeholder Theory
Provides stakeholder framework
Enterprise Core Ideology
Connects EA and Stakeholders
How do these stakeholder relationships
Stakeholder Theory
change as the enterprise transforms?
Provides stakeholder framework
Stakeholder behavior and
decision making
Provides theory for Stakeholder
relationships
Stakeholders and Corporate
Social Responsibility
Connects stakeholder dynamics to
enterprise dynamics
Enterprise Core Ideology
Connects stakeholder dynamics to
enterprise dynamics
Enterprise Architecture Views
Policy / External Factors
Process
Process
Organization
Organization
Products /
A
Services
Strategy
Knowledge
Knowledge
Information
Technology
Method
Complete a Case study on fast clock speed
enterprise- Risto Sports-- using the EA
framework
• Determine stakeholders and values
using EA & ESAT to determine affect
on architecture
• Map stakeholder in EA views over
enterprise epochs
• Assess saliency with Normalized
Stakeholder Saliency Index (NSSI)
(Grossi 2003)
• Assess Network effects
Operations
begin
• Design future state EA
• Interview Stakeholders to assess
April
2008
validity, reliability of Future EA
Risto website fully
operational
Full production of
Risto model
B2B operations
begin
February
2009
Epoch 1
August
2009
Epoch 2
Epoch 3
January
2010
Epoch 4
Enterprise Background
www.ristosports.com
Risto Goals and Core Values
Strategic goals :
1. Grow market share
2. Gain Legitimacy
3. Grow profitability
Core Values:
1. Stronger:Promote and serve
strength sports
2.Greener: Sustainable, socially
responsible products and services
3. Leaner: Aspire to be a Lean
Thinking Enterprise
4. Better: Highest quality and
exceptional value
Background- Growth Strategy
production costs
Cool Factor Loop
profit +
R&D/investment+
Price
dollars
+
+
Website/process
improvements
Price Relative to
Fashion Trends
competitors Sales
+
+
Style
+
Knowledge of
+
improvements
Ease
of
ordering
weightlifting shoes
Value relative to
Cool
Factor
competitors
+
+
+
People using
Potential
+
+
Customers
free weights
Satisfied
Potential customer customers
Adoption Rate
+
customers
+
conversion rate
W.O.M. Loop +
+
Brand Legitimacy
Word of Mouth
++
+
+
Unique searches
Unique offerings
+
Institutional
Affiliations
+
+
+ Search engine
referencing
Website hits+
+
+
Risto Website hits
+
Marketing
Sponsorships +
+
Distributor sites
hits
Unique Loop
+
Order fullfillment
costs
+
-
returns
Background-Stakeholders
Customers
Distributors
USAW
Gym
Affiliate
Distributor 1
Leadership
Credit/
banking
Instituti
ons
B2B
customers
Domestic
Shipper
Competitors
IT Contractor
Industrial
Engineer
US
Customs
Colombian
Business
Bureau
Artisans
US
manufacturing
policymakers
Strategy
View
Policy View
Information
View
Knowledge
View
Leadership
Customers
B2B
Customers
Industrial
Engineer
Artisans
Distributor 1
Distributors
USAW
Colombian
BusinessView
Process
Bureau
US manufacturing
Policymakers
Colombian Business
Bureau
Banking Institutions
Artisans
Customers
Leadership
Gym Affiliate
Leadership
IT contractor
Customers
Industrial
Engineer
Artisans
Distributor 1
Distributors
Organization View
Product
View
Leadership
Industrial
Engineer
Artisans
B2B Customers
Customers
Distributors
Distributor 1
IT Contractor
Colombian
Business
Bureau View
Services
Leadership
Industrial
Engineer
Customers
Distributors
Distributor 1
B2B
customers
IT Contractor
USAW
Leadership
Customers
B2B Customers
Industrial Engineer
Distributors
Distributor 1
Gym Affiliate
Industrial
engineer
Distributors
Customers
B2B
Customers
Competitors
USAW
Artisans
Stakeholder Network model, January 2010
Leadership
Customers
Gym affiliate
Part I- Epochs & Evolution
Risto website fully
operational
Full production of
Risto model
B2B operations
begin
Operations
begin
April
2008
February
2009
Epoch 1
August
2009
Epoch 2
Epoch 3
January
2010
Epoch 4
Part I- EA Space
& Stakeholders
Core
Ideology
Enterprise Architecture
Capabilities
Stakeholders
Part I- Business Strategy Space
& Stakeholders
Core
Ideology
Business model
Saliency
Stakeholders
Part I- Time Dependency
& Constant Inputs
Epoch (t)
Core
Ideology
Business Model
Enterprise Architecture
Stakeholders
Results & Analysis
Normalized Stakeholder Salience with Enterprise Epoch
100
NSSI
Epoch 1
Epoch 2
Stakeholder
Strategy IT
Knowledge Product Policy Process Org Service Strategy IT
Knowledge Product Policy
Process Org Service
USAW
1
0
1
0
0
0
1
0
1
0
1
0
0
0
1
0
Low End
2
2
2
1
1
1
1
0
2
2
2
1
1
1
1
0
High end
2
2
2
1
1
2
1
0
2
2
2
1
1
2
1
2
B2B customers
2
1
1
1
0
1
1
0
2
1
2
1
0
1
1
0
Distributors
0
0
0
0
0
0
0
0
1
1
1
1
0
1
1
0
Distributor 1
0
0
0
0
0
0
0
0
2
1
1
0
1
2
2
0
IT Contractor
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Artisans
0
0
0
0
0
0
0
0
1
2
2
2
1
2
2
0
Industrial Engineer
0
0
0
0
0
0
0
0
2
2
2
2
2
2
2
1
Leadership
2
2
2
2
1
2
2
0
2
2
2
2
1
2
2
2
CB Bureau
0
0
0
0
0
0
0
0
0
0
1
0
1
0
0
0
Gym Affiliate
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
OEM 1
2
1
1
2
1
1
1
0
0
0
0
0
0
0
0
0
Epoch 3
Epoch 4
Stakeholder
Strategy IT
Knowledge Product Policy Process Org Service Strategy IT
Knowledge Product Policy
Process Org Service
USAW
1
0
0
1
0
0
1
0
1
0
0
1
0
0
1
0
Low End
1
2
2
1
1
1
1
0
1
2
2
1
1
1
1
0
High end
2
2
2
1
1
2
1
2
2
2
2
1
1
2
1
2
B2B customers
2
1
2
1
0
1
1
0
2
1
2
2
0
1
1
0
Distributors
1
1
1
1
0
1
1
0
1
1
1
1
0
1
1
0
Distributor 1
2
1
1
0
1
2
2
0
2
1
1
0
1
2
2
0
IT Contractor
0
2
1
0
0
1
0
0
0
2
1
0
0
1
0
0
Artisans
1
2
2
2
1
2
2
0
1
2
2
2
1
2
2
0
Industrial Engineer
2
2
2
2
2
2
2
1
2
2
2
2
2
2
2
1
Leadership
2
2
2
2
1
2
2
2
2
2
2
2
1
2
2
2
CB Bureau
0
0
1
0
2
0
0
0
1
0
1
0
2
0
0
0
Gym Affiliate
0
0
0
0
0
0
0
0
0
0
0
0
1
0
1
2
OEM 1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
50
1
View prescence
None=0 Moderate=1Strong=2
1
2
3
USAW
High end
Distributors
IT Contractor
Industrial Engineer
3
COL 2Business Bureau
OEM 1 Enterprise State
4
Low End
B2B customers
Distributor 1
Artisans
Leadership
4Gym Affiliate5
Part 1- Conclusions
Core mission and purpose will drive results
Stakeholders must meet your needs dependent on the Epoch
dependent on Epoch context
• Stakeholders trade value with respect to business model
Stakeholders add capabilities to your enterprise (EA)
dependent on Epoch context
• Salient stakeholders permeate each view
Most salient stakeholders are ones that your architecture &
Strategy is inextricably dependent
Part II- Network Effects
Examine how stakeholders linked to each
other, resource dependency and institutional
power, how relationships evolve with EA &
business model
Per Part 1, define Core and Extended
Enterprise on stakeholder saliency
Part II- Network Effects
Epoch 4
Customers
Distributors
USAW
Gym
Affiliate
Distributor 1
Leadership
Credit/
banking
Instituti
ons
B2B
customers
Domestic
Shipper
Competitors
IT Contractor
Industrial
Engineer
US
Customs
Colombian
Business
Bureau
Artisans
US
manufacturing
policymakers
Customers
Epoch 4
Distributors
USAW
Gym
Affiliate
Distributor 1
Leadership
B2B
customers
IT Contractor
Industrial
Engineer
Colombian
Business
Bureau
Artisans
Extended enterprise
Core Enterprise
Customers
Distributors
Epoch 3
USAW
Distributor 1
Leadership
B2B
customers
IT Contractor
Industrial
Engineer
Colombian
Business
Bureau
Artisans
Customers
Distributors
Epoch 2
USAW
Distributor 1
Leadership
Industrial
Engineer
B2B
customers
Colombian
Business
Bureau
Artisans
Customers
Epoch 1
USAW
Leadership
Industrial
Engineer
B2B
Customers
Insights on Network
• Most salient stakeholders are Core enterprise
• Extended enterprise comprised of less salient
stakeholders, saw most delta in NSSI across states
• Core stakeholders high centrality
– Control decision making and information flow
– Control via resource dependency through cluster
linkages
• Most dense where learning and information flow
needed to occur quickly
– Harnessing customer W.O.M., or communicating with
shop
• Network appropriate for organization seeking
higher legitimacy & institutional power
Part III- Designing Future Epoch
Process View
Strategy View
Grow market share
Gain Legitimacy
Become more profitable
More codified
Assess process compliance
and maturity
Policy View
Return policies in sync with market
Manufacture where Policy’s stable
Knowledge View
More Efficient & standardized
extractions and retention
Harness B2B, B2C knowledge
Products/Services View
Standardize offerings
Agile and adaptable
Sophistication
Organization View
Improve reflection of Risto
values in Distributor to
consumer interactions
Extract more value from
Resource rich stakeholders
IT View
Centralize information flow and collection
Fewer hand-offs and easier accessibility
Enable feedbacks
Part III- Value Delivery Gaps
EA Gap Analysis by Stakeholder and View
Stakeholder Strategy
USAW
Low End
High end
B2B
Distributors
Distributor 1
IT
Artisans
IE
Leadership
COL BB
Gym Affiliate
1
1
2
2
1
2
0
1
2
2
1
0
Epoch 4 - B2B Operations Begin
IT Knowledge Product Policy Process Organization Service
0
2
2
1
1
1
2
2
2
2
0
0
0
2
2
2
1
1
1
2
2
2
1
0
2
1
1
2
1
0
0
2
2
2
0
0
0
1
1
0
0
1
0
1
2
1
2
1
0
1
2
1
1
2
1
2
2
2
0
0
1
1
1
1
1
2
0
2
2
2
0
1
0
0
2
0
0
0
0
0
1
2
0
2
Mapping Future State Stakeholder Value Delivery
High
Industrial engineer
High End
Customers
Artisans
High End
CustomersB2B
B2B
Leadership
Current Performance
Artisans
Low End
Customers
Distributors
Colombian Business
Bureau Leadership
Distributors
Low End
Customers
Distributor 1
Gym Affiliate
Colombian Business
Bureau
Gym Affiliate
USAW
USAW
Distributor 1
Key:
Present State, EA State 4
Future State, EA State 5
Low
Relative Importance to Enterprise
High
EVSMA 1.0 - For LAI Member Use Only © Massachusetts Institute of Technology 2005
Part IV- Accuracy of
Management’s perceptions
• Interviewed lowest and highest salience
stakeholders, perceptions of management
and other stakeholders
• Shows Risto Sports living-up to Core
Ideology
• Confirms Gap Analysis
• Reveals context
Part IV-Excerpts
Artisans
• Improved living
standards, work/ wage
predictability
• Pride in sending products
to USA
• Insensitive to deadlines
• “Gringo from Miami”
“we have to ship shoes
for the Gringo”
D1
• Doing Risto a “favor”
• Not core market
IE
• Able to buy a house
• Growth of product design
• “quality is better than
China”.
• “always looking for new,
better quality materials”
• Checking on Artisans
• Uses local materials
COL BB
• USA is the “first
commercial ally of
Colombia”
• Conscious of China
• Controlling of small
business & hard currency
USAW
• Need “10-15[companies
like] Ristos”
• Can “contribute more” to
Risto
Conclusions
• Core enterprise stakeholders are most salient and present in each view,
they define Core Ideology
• Extended enterprise stakeholders may not be salient in every view, tied
to the enterprise by the values and capabilities they add
• EA and business Model determine the stakeholders endogenously
• Core enterprise less affected by context/Epochs, only constant in the
Enterprise system is Core Ideology
• On Corp. Social Responsibility, the enterprise must possess core
values that management truly believes-in and abides consistent with
well being of society
• Benevolence IS possible, it all depends on how the enterprise
constructs its values and relationships and defines externalities
• Much of an enterprise’s work is “invisible work” (Daniels 1987),
employing human relationships in political and cultural context
(Carroll 2002)
Questions?
Info@ristosports.com
www.ristosports.com