This document contains lecture notes on managing public issues and stakeholder relationships. It discusses key concepts like public issues, stakeholder expectations, environmental analysis, drivers of stakeholder engagement, and different stages of engagement from inactive to interactive. It provides examples to illustrate reactive, proactive, and interactive engagement approaches. Stakeholder analysis is discussed as identifying relevant stakeholders, their interests, power, and potential coalitions. The consequences of not engaging stakeholders and adopting strategic monitoring are also examined.

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MGTS7608
BUSINESS AND SOCIETY
Managing Public Issues and
Stakeholder Relationships
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2 - 2
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https://www.sbs.com.au/news/the-feed/here-s-a-running-list-of-australian-
businesses-that-have-underpaid-staff-in-2019
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Underpayment is widespread!
https://www.sbs.com.au/news/the-feed/they-told-me-that-they-could-pay-
me-12-chinese-student-speaks-out-about-wage-theft
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Public Issues
ØPublic issue
Any issue that is of mutual concern to an organization
and one or more of its stakeholders
ØStakeholder expectations
A mixture of people’s opinions, attitudes, and beliefs
about what constitutes reasonable business behaviour
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A Firm and Its Stakeholders
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Environmental Analysis
and Intelligence
Ø Environmental analysis
A method managers use to gather information about
external issues and trends, so they can develop an
organizational strategy that minimizes threats and
takes advantage of new opportunities
Ø Environmental intelligence
The acquisition of information gained from analyzing
the multiple environments affecting organizations
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Eight Strategic Radar Screens
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Drivers of Stakeholder Engagement
Ø Stakeholder engagement is, at its core, a relationship
Ø The participation of a business organization and at least
one stakeholder organization is necessary, by definition,
to constitute engagement
Ø Engagement is most likely when both the company and
its stakeholders both have an urgent and important goal,
the motivation to participate, and the organizational
capacity to engage with one another
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Engaging with stakeholders
Ø Over time, the nature of business’s relationship with its
stakeholders often evolve through a series of stages
§ Inactive – Companies ignore stakeholder concerns
§ Reactive – companies act only when forced to do so, and then in a
defensive manner
§ Proactive – Companies try to anticipate stakeholder concerns
§ Interactive –Companies actively engage stakeholders in an ongoing
relationship of mutual respect, openness, and trust
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The Performance-Expectations Gap
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Stakeholder Analysis
Ø It is part of every manager’s job
Ø Process whereby identify relevant stakeholders
and analyse their interest and power
Ø Asks 4 questions:
§ Who are the relevant stakeholders?
§ What are the interests of each stakeholder?
§ What is the power of each stakeholder?
§ How are coalitions likely to form?
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Engaging with stakeholders
Ø Over time, the nature of business’s relationship with its
stakeholders often evolve through a series of stages
§ Inactive – Companies ignore employees concerns
§ Reactive – companies act only when forced to do so, and then in a
defensive manner
§ Proactive – Companies try to anticipate employees concerns
§ Interactive –Companies actively engage employees in an ongoing
relationship of mutual respect, openness, and trust
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Engaging with stakeholders
Ø Over time, the nature of business’s relationship with its
stakeholders often evolve through a series of stages
§ Inactive – Companies ignore customers concerns
§ Reactive – companies act only when forced to do so, and then in a
defensive manner
§ Proactive – Companies try to anticipate customers concerns
§ Interactive –Companies actively engage customers in an ongoing
relationship of mutual respect, openness, and trust
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Engaging with stakeholders
Ø Over time, the nature of business’s relationship with its
stakeholders often evolve through a series of stages
§ Inactive – Companies ignore shareholders concerns
§ Reactive – companies act only when forced to do so, and then in a
defensive manner
§ Proactive – Companies try to anticipate shareholders concerns
§ Interactive –Companies actively engage shareholders in an
ongoing relationship of mutual respect, openness, and trust
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Engaging with stakeholders
Ø Inactive – Companies ignore stakeholder concerns
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Inactive
response?
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https://www.nytimes.com/2019/10/29/business/boeing-ceo-
hearing.html
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Boeing 737 MAX Investigation
The Boeing 737 MAX, which was certified by the FAA and entered revenue service
in 2017, was involved in two fatal crashes within five months of each other that
killed a total of 346 people, including 8 Americans. The aircraft remains grounded
worldwide.
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Engaging with stakeholders
§ Reactive – companies act only when forced to
do so, and then in a defensive manner
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Reactive? Nokia?
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Success is not permanent
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Nokia share price 2007-2012
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Engaging with stakeholders
§ Proactive – Companies try to anticipate
stakeholder concerns
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The South Korean Government has Ministry
of Trade, Industry and Energy said the
$16.75 billion won ($14.8m, £9.57m)
investment would help manufacturers
compete with cheap labour in China. In
2018 Samsung developed high precision
robots with precision speed reducers,
motors, controllers and sensor encoders.
The plan, the ministry said, was for South
Korean robots to pick up work normally
done by low-wage Chinese workers.
Robots will eventually be put to work
making products such as mobile phones
and other consumer electronics that
require the level of precision often only
possible with human hands.
(Wired UK, 15/2/2016).
Proactive?
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Aggie the Art Gallery Guide (sometimes
seen at UQ!)
http://www.artgallery.wa.gov.au/events_programs/aggie.asp
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The future?
Sophia the Robot Speaks at the UN
And Is Now A Citizen of Saudi Arabia
•Intelligent Machines
•/Oct 30, 2017
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China responds
The University of Science and Technology
of China recently unveiled an interactive,
eerily human-looking robot named Jia Jia.
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The future?
https://futurism.com/japan-robot-hotel Jan 2019
Robots could change a
room’s temperature and
respond to basic small talk,
but couldn’t answer any
questions about the area or
other attractions.
Customers complained.
Management removed robots
and replaced them with
human employees at the
front desk to answer
questions.
Japan’s Henn -na Hotel sacks 240 robots
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More likely scenario?
https://www.abc.net.au/news/2019-09-09/new-wa-mining-boom-brings-automation-to-
the-fore/11454838
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Stakeholder Analysis
Ø It is part of every manager’s job
Ø Process whereby identify relevant stakeholders
and analyze their interest and power
Ø Asks 4 questions:
§ Who are the relevant stakeholders?
§ What are the interests of each stakeholder?
§ What is the power of each stakeholder?
§ How are coalitions likely to form?
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ØWhat difference does it make?
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Engaging with stakeholders
§ Interactive –Companies actively engage
stakeholders in an ongoing relationship of
mutual respect, openness, and trust
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Noma chef Rene Redzepi at the pop-up restaurant at Barangaroo.
Social media pictures quickly revealed that
lemon myrtle ice cream with bush limes
and fennel flowers, snow crab in fermented
kangaroo, crocodile-fat shards, wattle
porridge, and scallop pie with lantana
flowers were among the dishes in the 10-
to-12-course $485 menu.
Waitlist of 27,000 as world-famous Noma restaurant hits Sydney
(AFR 27/1/2016)
Interactive? NOMA
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Engaging with stakeholders
Ø Are there consequences of not engaging and not
adopting the radar screens approach?
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Customer preference?– Uber vs Taxis
https://www.brisbanetimes.com.au/politics/queensland/the-graph-that-shows-
exactly-when-uber-wounded-brisbane-s-taxis-20180219-p4z0vq.html
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Tactics?
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Uber to lose London license
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Expectations - shareholder activism
https://www.smh.com.au/business/investments/big-investors-take-a-public-
stand-on-climate-change-risk-20180215-p4z0gr.html
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Woolworths – under pressure!
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