The document outlines Toyota's approach to stakeholder relationship management. It identifies Toyota's key stakeholders as employees, customers, investors, the environment, and communities. It describes how Toyota addresses the interests of each stakeholder group through various corporate social responsibility initiatives, such as career development programs for employees, emphasis on quality and innovation for customers, focusing on profitability for investors, environmental conservation programs, and community support programs. The conclusion emphasizes the importance of considering all stakeholders for business success and sustainability.

1. MPHIL IN LEADERSHIP
STAKEHOLDER AND RELATIONSHIP MANAGEMENT
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2. STAKEHOLDER THEORY AND ITS
APPLICATION TO AN ORGANIZATION
GROUP TWO
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3. WHAT IS STAKEHOLDER THEORY?
According to Edward Freeman, Stakeholder theory is the concept that tries to
address the collective impact of business decisions, trends, profitability, etc., on
all the organization’s stakeholders, including employees, shareholders, lenders,
customers, suppliers, etc.
This view is in opposition to the long-held shareholder theory proposed by
economist Milton Friedman that in capitalism, the only stakeholders a
company should care about are its shareholders
It is based on the assumption that businesses can only be considered
successful when they deliver value to the majority of their stakeholders.
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4. Who is a stakeholder?
A stakeholder is an individual or a group that has an
interest in a company and can either affect or be affected by
the business. (Edward Freeman).
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5. STAKEHOLDER TYPES
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6. DIFFERENCE BETWEEN STAKEHOLDERS AND
SHAREHOLDERS
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7. STAKEHOLDERS VS. SHAREHOLDERS
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8. PRINCIPLES OF STAKEHOLDER THEORY
The theory is based on six principles namely;
1. Entry and Exit
2. Governance
3. Externalities
4. Contract Cost
5. Agency
6. Limited Immortality
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9. THREE APPROACHES TO THE THEORY
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10. WHAT IS STAKEHOLDER ANALYSIS
A stakeholder analysis allows you to map out and establish the appropriate level of
communication with your stakeholders relative to their influence and interest in your project.
A thoughtful stakeholder analysis will prime you for the advocacy you need or prepare you
for the opposition you anticipate.
The point in stakeholder analysis is to look at all of the stakeholders of a business or situation,
and examine how a particular issue is or will be affecting them. Stakeholders have different
demands and feelings depending on who they are, and it is important that people in a
managerial position take all of them into consideration.
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11. STAKEHOLDER MAPPING
This is a way of ‘prioritizing’ the
different people or groups, to
ensure the most effective
outcome is reached.
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12. ADVANTAGES OF STAKEHOLDER ANALYSIS
• To help gather Crucial Input
Key stakeholders often deliver valuable insight
that can help keep your project on track and
bring success to the company.
• Gaining more resources:
If your stakeholder has a full understanding
of what it will take to get your project off
the ground, they may be able to help you
secure the people, tools, and resources you
need to make you successful.
• Building trust:
By consistently engaging and involving
stakeholders in your process, you’re building
trust that may make them quick to support
upcoming projects.
• Planning ahead:
Consistent feedback from key
stakeholders helps you anticipate
feedback and requirements on future
projects to gain buy-in more quickly.
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13. STEPS INVOLVED IN STAKEHOLDER ANALYSIS
• Stakeholder Identification
The first and most important step is to pin
down both internal and external
stakeholders. Once identified, it is essential
to define their roles and responsibilities
related to the project.
• Setting up an engagement plan
Once the stakeholders have been identified
and their roles in the project have been
established, the engagement plan can be put
together. This will ensure continuous and
effective communication.
• Continuous stakeholder interaction
Once the interests and influence of
stakeholders have been established, it is
important to develop the channels of
communication. This will help build
relationship with each stakeholder.
Communication must be transparent and
consistent.
Reviewing and Reporting
it is essential to keep track of the
commitments made to stakeholders and
regularly communicate progress. Address
gaps identified by reviewing strategies.
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14. APPLYING STAKEHOLDER THEORY
TO AN ORGANIZATION
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15. OVERVIEW
Toyota Motor Corporation’s corporate social responsibility (CSR) strategies cover a
wide variety of concerns among stakeholders. These stakeholders influence the
company’s brand image, human resource capabilities, and financial soundness. Toyota
recognizes the importance of these stakeholders. As such, the firm maintains
corporate social responsibility measures that directly address stakeholders’ interests.
While maintaining emphasis on business strength in the global automobile market,
Toyota continues to stand as one of the best firms in terms of corporate social
responsibility programs that satisfy relevant interests of stakeholders.
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16. Toyota’s Stakeholder Groups &
CSR Initiatives
As a global firm in the automotive industry, Toyota’s corporate social responsibility
activity deals with various stakeholders with disparate interests and demands.
However, the following are the most significant groups of Toyota’s stakeholders,
arranged according to significance in affecting the company:
1.Employees
2.Customers
3.Investors
4.Environment
5.Communities
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17. Employees
Toyota considers employees as its most significant stakeholders. This stakeholder group
aims for job security, career development and fair employment practices. Toyota’s
corporate social responsibility strategies address the interests of these stakeholders
through satisfactory salaries and wages and a career development program for advancing
employees. For example, Toyota has an On-the-Job Development (OJD) program, as well as
training courses specific to career paths in the firm.
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18. Customers
Customers are the second-priority stakeholders in Toyota’s corporate social responsibility
strategies. The interests of this stakeholder group are high quality automobiles and service,
along with reasonable pricing. Toyota addresses these interests through rapid innovation
based on The Toyota Way and the Toyota Production System (TPS), which aim to maximize
efficiency, quality and innovation. Thus, the firm’s corporate social responsibility programs
properly cover the interests of customers as stakeholders.
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19. Investors
Toyota considers investors as another major stakeholder group. These stakeholders are
interested in business profitability. Toyota addresses these interests through emphasis on
global business strength. The company experienced a decline because of the recession in
the late 2000s and massive product recalls that started in 2009 due to safety issues like the
sticking pedal problem. However, following its reorganization in 2013, Toyota now highlights
improved business resilience as a priority over rapid expansion. Thus, Toyota’s corporate
social responsibility strategies address the interests of investors as stakeholders.
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20. Environment.
Toyota has corporate social responsibility strategies targeting environmental goals. The main
interests regarding the environment as a stakeholder include business sustainability and
environmental conservation. The company addresses these interests through the Toyota
Environmental Activities Grant Program. Through this corporate social responsibility program, the
firm donates automobiles and funds for environmental conservation. For example, in 2008,
Toyota donated five hybrid cars and more than $1 million to support Everglades National Park. In
addition, the Toyota Together Green program supports a network of environmental advocates and
initiatives throughout the United States. Thus, Toyota’s corporate social responsibility programs
effectively fulfill interests regarding the natural environment as a stakeholder.
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21. Communities.
As stakeholders, communities are interested in their socioeconomic development. Toyota’s
corporate social responsibility strategies address this stakeholder group through various
community development and support programs. For example, the company has education
outreach programs to promote literacy. Also Toyota’s Go Safely initiative provides safe
driving education and tools for families. In addition, the firm’s Meal Per Hour program
donates meals to Food Bank. Moreover, Toyota works with other organizations like the
American Red Cross to support community development. Thus, Toyota’s corporate social
responsibility strategies effectively satisfy the interests of communities as stakeholders.
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22. Conclusion
Freeman says “if you can get all your stakeholders to swim or row in the same direction,
you’ve got a company with momentum and real power. Saying that profits are the only
important thing to a company is like saying ‘Red Blood Cells are life’. This means that a
company cannot thrive without the proper engagement of its stakeholders. Stakeholders,
whether internal or external are key to the success of every business. Thus their interest
must be considered and addressed for prolonged relationship and sustainability of business.
The stakeholder theory is very effective in understanding and engaging stakeholders in
every business.
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