The Stakeholder Approach
Corporate Communication
NMH
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The roles of communications
•
•
•
•
Informing
Advocating
Dialoguing
Types of communication
– One-way
– Two-way (Symmetrical/Asymmetrical)
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Stakeholders
”...a group or individual who can have an effect on or
be affected by the organization.” - Freeman (1984)
Stockholders
Government
Regulators
Boards of Directors
Community leaders
Organization’s
external
linkages
Enabling
Normative
linkages
Associations
Political groups
Professional societies
Organization
Diffused
Environmentalists
Media
Community residents
Voters
Minorities
Women
Other publics
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Suppliers
Unions
Employees
Input
Functional
linkages
Output
Consumers
Industrial purchasers
Service users
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Four Key Linkages
• Enabling Linkages
• Functional Linkages
– Input linkages
– Output linkages
• Normative Linkages
• Diffused Linkages
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Enabling Linkage
• Organization could not exist without this
linkage
– Authorities
– Shareholders
– Legal System
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Functional Linkage
• Linkage that give input and take output
• Input Linkage
– Employees
– Unions
– Suppliers
• Output Linkages
– Customers
– Other organizations
Individual
consumers
Peggy –
Simcic
Brønn
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Normative Linkage
• Organizations that have common problems
or similar values
– Membership organizations
– Professional groups
– Associations
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Diffused Linkage
• Elements in society that are not clearly
identified as a formal member of
organization
–
–
–
–
Environmentalists
Community Residents
Media
Other Publics
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Corporate identity and reputation
Corporate
Identity
Names,
Self-Representations
Customer
Image
Community
Image
Investor
Image
Employee
Image
Corporate Reputation
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Fombrun, C. J., Reputation, Harvard Business School Press
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Reputational risk
management cycle
Opportunity
Platform
Corporate
Citizenship
Reputational
Capital
Corporate
Performance
Safety
Net
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Fombrun, C. J. et al., “Opportunity Platforms and Safety Nets: Corporate Citizenship
and Reputational Risk,” Business and Society Review, 105:1, 85-106.
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Managing the downside of
reputational risk
Media
Community
Threat of
Illegitimacy
Regulators
Threat of
Exposure
Threat of Boycott
Activists
Threat to
Value
Safety
Net
Threat of
Legal Action
Threat of
Misunderstanding
Investors
Threat of Rogue
Behavior
Employees
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Customers
Threat of
Defection
Partners
Fombrun, C. J. et al., “Opportunity Platforms and Safety Nets: Corporate Citizenship
and Reputational Risk,” Business and Society Review, 105:1, 85-106.
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Managing the upside of
reputational risk
Media
Promise of
favorable
coverage
Promise of
legitimacy
Regulators
Promise of
advocacy
Promise of legal
action
Opportunity
Platform
Activists
Community
Promise of value
Promise of loyalty
Investors
Promise of
commitment
Promise of
collaboration
Employees
Peggy Simcic Brønn
Customers
Partners
Fombrun, C. J. et al., “Opportunity Platforms and Safety Nets: Corporate Citizenship
and Reputational Risk,” Business and Society Review, 105:1, 85-106.
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What stakeholders want…
• Visibility
 information
• Virtue
 good organizational behavior
• Verifiability
 access to information
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The challenge...
“I’m sorry, but if you expect any selfrespecting activist to believe a word you
say about your commitment to human
rights, then you are as arrogant as the PR
firm that came up with this strategy.”
- Unknown ‘activist’
quoted in ‘How do we stand?’ People, Planet & Profits,
A Summary of the Shell Report 2000, Newsweek.
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Mess management:
Multiple perspectives
Yields
choices of...
Influenced by individuals’
mental models
A real-world
situation of
concern
Actions to
improve the
situation
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Descriptions
of perceived
relevant
activity
Comparison of
descriptions with the
perceived reality
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Mental models
• Deeply held images of how the world works.
 Explicit understandings.
 Implicit understandings.
• Represent the most important factors and the
relationships that link them.
• Provide the context in which to view and interpret
new material.
• Determine how stored information is relevant in a
given situation.
• Frequently treated as if they were the truth!
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I take
ACTION
based on my
beliefs
I adopt
BELIEFS
about the world
I draw
CONCLUSIONS
I make
ASSUMPTIONS
based on the
meanings I add
I add
MEANING
(cultural and personal)
Reflexive loop
Our beliefs affect
what data we
select next time
I select
DATA
from what I observe
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Observable “data” and
EXPERIENCES
(as a video recorder
might capture)
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Applying the Ladder of Inference
The ladder provides a means to ask questions...
 What is the observable data behind that
statement?

Does everyone agree on what the data is?

Can you run through your reasoning?

How did we get from that data to these
abstract
assumptions?

When you said “[your inference],” did you
mean ”[my interpretation of it]”?
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Essential skills for working with
mental models
 Reflection
Becoming more aware of your own thinking and
reasoning.
 Inquiry
Inquiring into others’ thinking and reasoning.
 Advocacy
Making your own thinking and reasoning more
visible to others.
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Working with mental models
Balancing Inquiry and Advocacy
• A palette of conversational and dialogue skills.
• Protocols for balancing inquiry and advocacy.
• Conversational recipes...
 Post hoc examination of conversations.
 Seeking generic strategies for improving use of recipes.
 Ask for other’s perspectives (inquiry).
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Co-orienting stakeholders’ mental
models for improved communication
Organization’s
definition
and evaluation of
an issue
UNDERSTANDING
AGREEMENT
CONGRUENCY
Organization’s
perception of
Stakeholder A’s
views
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Stakeholder A’s
definition
and evaluation of
an issue
CONGRUENCY
ACCURACY
Stakeholder A’s
perception of
organization’s views
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Co-orientation states
• True consensus
– The parties know they share an agreement on their evaluation
of an issue.
• Dissensus
– The parties hold conflicting views and are aware of their
differences.
• False consensus
– The organization believes that the stakeholder agrees with
them on a particular issue, or
– The stakeholder group mistakenly believes that the
organization holds the same view that they do.
• False conflict
– The parties believe that they disagree on an issue when in fact
they agree.
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Dialogue as the basis for
communications
• Models of communication
– Shannon and Weaver (1949) – focus on the medium
– Cognition-based models – focus on the message
• Dialogue
“...a sustained collective inquiry into everyday
experience and what we take for granted.”
Senge, et.al. (1994). The Fifth Discipline Fieldbook
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Discussion
• Ability to acquire information
• Identify threats and opportunities
(proactively)
• Conduct research
• Engage in individual and organizational
reflection
• Organizational changes
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Influences on multiple perspectives
Levels of analysis
• Cultural
– The “Cultural Iceberg”
• Organizational
– Environmental factors
– Structural factors
• Individual
– Cognitive factors
– Personality factors
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The cultural iceberg
Primarily in
awareness
fine arts literature
drama classical music popular music
folk dancing games cooking dress
notions of modesty conception of beauty
cosmology ideals governing childrearing rules of descent
Primarily out
relationship to animals patterns of superior subordinate relations
of awareness
definition of sin courtship practices conception of justice incentives to work
notions of leadership tempo of work patterns of decision making
conception of cleanliness attitudes towards the dependent theory of disease
approaches to problem solving conception of status mobility eye behavior
roles in relation to status by age, sex, class, occupation, kinship etc..
conversational patterns in social contexts conception of past and future
definition of insanity nature of friendship ordering of time conception of “self”
patterns of visual perception preference for competition or cooperation
body language social interaction rate notions of adolescence
notions about logic and validity patterns of handling emotions facial expressions
arrangement of physical space ...AND MUCH, MUCH MORE...
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