1.
A THEORY OF
STAKEHOLDER
IDENTIFICATION AND
SALIENCE
PRESENTED BY: GROUP 3 SEC B
ANKIT AGGARWAL
GAUTAM MAHESH
13P081
MONIKA KHETAN
13P088
GOPESH NAKRA
13P104
SATYAJIT TRIPATHY
13P109
SUYASH NIGOTIA
13P116
13P063

2.
Stakeholder Theory Overview

This article of Stakeholder theory deals with two
prominent concepts:



Identifying who the stakeholders are
Salience of the various Stakeholder classes and their
claims to the organization
Who is a Stakeholder?
“Any group or individual who can affect or is
affected by the achievement of the organization‟s
objectives” ~ Freeman

3.
Stakeholders

4.
Defining Stakeholders - Broad Vs Narrow
View

Narrow view
Concerned with only the risk factor and includes:


Voluntary Stakeholders & Involuntary
Stakeholders
Broad View
Takes into account all those groups who can
affect or are affected by the achievement of the
organization‟s objectives.


who can affect the organization – Influencers
who are affected by the organization – Claimants

5.
Stakeholder Attributes
1. Power
A relationship among social actors, in which A can get
B to do something which B would not have otherwise done
Categorization of power – Coercive, Utilitarian &
Normative
2. Legitimacy
Socially accepted and expected structures or behavior under
a socially constructed system of norms, values, beliefs and
LEGITIMACY
definitions
INDIVIDUAL
ORGANIZATIONAL
SOCEITAL

6.
Stakeholder Attributes
3. Urgency
Exists when 2 conditions are met –
 When a relationship or claim is of a time-sensitive
nature
 When it is critical to the stakeholder

7.
Stakeholder Classes
Power
Dormant
Definitive
Urgency
Dependen
t
Demanding
Discretionary
Legitimac
y

8.
Stakeholder Classes

Class 1 - Latent Stakeholders
•
•
•

Powe
r
One Attribute & Low Salience
Dormant
Managers may choose to do nothing
Consists of – Dormant,
Legitimacy
Urgency
Demanding and
Deman
Discreti
onary
Discretionary shareholders
ding
Dormant Stakeholders
• Possess power to impose their will but little or no
interaction as they lack legitimacy or urgency
• Examples – Those who have a loaded gun, those who
can spend a lot of money

9.
Class 1 - Latent Stakeholders (Continued)

•
•
Discretionary Stakeholders
Powe
Likely to be recipients of corporate
r
philanthropy
Dormant
Examples – Beneficiaries of charity,
Non-profit organizations
Legitimacy
such as schools & hospitals
Deman
Discreti
ding
onary
Urgency

•
•
•
Demanding Stakeholders
Those with urgent claims but no legitimacy or power
Irritants for management but not worth considering
Examples – People with unjustified grudges, serial
complainers

10.
Class 2 - Expectant
Stakeholders
•
•
•

2 Attributes & Moderate Salience
Active rather than Passive
Consists of – Dominant, Dependent
and Dangerous Stakeholders
Dominant Stakeholders
 Many theories position them as the
only stakeholders of an organisation
 Possess Power + Legitimacy
 Examples – Board of Directors, Public relations

11.
Class 2 - Expectant Stakeholders
(Continued)
 Dangerous
•
Stakeholders
Those with powerful and urgent
claims and can be coercive and
possibly violent
 Dependent
•
•
Stakeholders
Stakeholders who are dependent
on other bodies to carry out their will,
because they lack the power to enforce their
stake
Examples – Residents & animals impacted by incidents
like Oil Spill, Mining etc.

12.
Class 3 - Definitive Stakeholders
•
•
•
Often dominant stakeholders
with an urgent issue
Dependent groups with
powerful legal support
Examples –
Democratic legitimacy achieved by a „Dangerous‟
nationalist party by winning national elections

13.
DYNAMISM in RELATIONS

A stakeholder can increase/decrease their
salience by acquiring or losing one of the
attributes: power, legitimacy or urgency
Nonstakeholder

Latent
Expectant
Definitive
Example: When SEBI/IRDA receives a
complaint, it moves from being a expectant to
a definitive stakeholder

14.
POWER-DYNAMISM MATRIX

Stakeholders in groups A &
B:
Are the easiest to deal with
Dynamism

Stakeholders in group C:
Are important because they are
powerful. But low dynamism
means their reaction is
predictable and expectations
can be managed
Stakeholders in group D: Are
important because thy are
powerful. But low dynamism
means their reaction is
High
Low

Power Low
Fewer
Problems
(A)
Unpredictabl
e but
Manageable
(B)
High
Powerful but
Predictable
(C)
Greatest
Danger or
Opportunitie
s (D)

15.
British Petroleum

Shareholder-driven company(bottom-line)

Attempted to gain higher stock values through
higher profits at the expense of safety
concerns

16.
Deepwater Horizon Oil Spill
Biggest hit for BP and its public
relations that had a direct impact on its
share prices
•
Killed 11 people and injured many
others
•
Date:
Environmental Disaster: ignited public
antagonism
•
Most importantly, it was not the first
disaster linked to the BP brand.
•
20th April, 2010
Place:
Gulf of Mexico

17.
Stakeholders of BP Identified







Government(federal and state)
Employees(current and the ones killed)
Shareholders(majority and minority)
Environmentalists
Businesses along the coast(Tourism, Seafood)
Coastal Residents
Customers

18.
Stakeholders and their Classes for
BP
Stakeholders
Power
Government
Employees
Shareholders
Environmentalists
Businesses along the
coast
Coastal Residents
Customers
*
*
*
-
Attributes
Legitimacy Urgency
*
*
*
*
*
*
*
*
*
*
*
-
Shareholder
class
Definitive
Expectant
(Dependent)
Expectant
(Dominant)
Expectant
(Dangerous)
Expectant
(Dependent)
Expectant
(Dependent)
Latent
(Discretionary)

19.
What the company did?




Undermined the extent of the damage
Denied various claims made by researchers
Use of unethical practices
No empathy with those affected
No consistency between the image
it was trying to portray and
what it really was!

20.
What BP should have done?
1.
2.
3.
4.
5.
6.
Be more alert to the significance of the company‟s
identity in the minds of the public
React quickly
Be present on the ground to build an emotional connect
with those affected
Balance legal/economic language with
emotional/empathic tones in their public statements
Acknowledged the company‟s moral responsibility
before dealing with legal liabilities
Put the interests of the company‟s shareholders and
managers after those of the environment and the
communities affected by the spill

21.
References




http://citizenpolity.com/2010/09/07/definingshareholders-stakeholders/
http://www.lawyersandsettlements.com/blog/bp-oil-spillfallout-whos-affected-03758.html
http://www.nytimes.com/2010/07/13/business/energyenvironment/13bprisk.html?_r=2&src=twt&twt=nytimes&
http://taprootcreative.com/2011/04/lessons-in-crisiscommunication-an-analysis-of-bp%E2%80%99sresponse-to-the-gulf-oil-disaster/

22.
Questions