Developing Mission, Vision, and Values
Stakeholders
Stakeholders and Stakeholder Analysis
Stakeholders are individuals or groups who have an interest in an organization's ability to deliver intended results and maintain the viability of its products and services. We've already stressed the importance of stakeholders to a firm's mission and vision. We've also explained that firms are usually accountable to a broad range of stakeholders, including shareholders, who can make it either more difficult or easier to execute a strategy and realize its mission and vision. This is the main reason managers must consider stakeholders' interests, needs, and preferences.
Considering these factors in the development of a firm's mission and vision is a good place to start, but first, of course, you must identify critical stakeholders, get a handle on their short- and long-term interests, calculate their potential influence on your strategy, and take into consideration how the firms strategy might affect the stakeholders (beneficially or adversely). Table 4.2 "Stakeholder Categories" provides one way to begin thinking about the various stakeholder groups, their interests, importance, and influence. Influence reflects a stakeholder's relative power over and within an organization; importance indicates the degree to which the organization cannot be considered successful if a stakeholder's needs, expectations, and issues are not addressed.
Table 4.2 Stakeholder Categories
| Stakeholder | Categories | Interests | Importance | Influence |
|---|---|---|---|---|
| Owners | ||||
| Managers | ||||
| Employees | ||||
| Customers | ||||
| Environmental | ||||
| Social | ||||
| Government | ||||
| Suppliers | ||||
| Competitors | ||||
| Other? |
As you can imagine, for instance, one key stakeholder group comprises the CEO and the members of the top-management team. These are key managers, and they might be owners as well. This group is important for at least three reasons:
- Its influence as either originator or steward of the organization's mission and vision.
- Its responsibility for formulating a strategy that realizes the mission and vision.
- Its ultimate role in strategy implementation.
Typically, stakeholder evaluation of both quantitative and qualitative performance outcomes will determine whether management is effective. Quantitative outcomes include stock price, total sales, and net profits, while qualitative outcomes include customer
service and employee satisfaction. As you can imagine, different stakeholders may place more emphasis on some outcomes than other stakeholders, who have other priorities.