Lecture 8: Stakeholder evidence Flashcards
(20 cards)
Defining stakeholders
- “Stakeholders are groups and individuals who have a stake in the success and failure of a business” (Freeman et al, 2010:xv)
- “Stakeholders are those individuals or groups who depend on an organization to fulfill their own goals and on whom, in turn, the organization depends” (Johnson et al, 2017:134
- “Stakeholders are key individuals or groups of individuals with vested interests or ‘stakes’ in a given decision or project. The stakeholder can be a direct or an indirect stakeholder. A direct stakeholder is a customer, supplier, a government body, or anyone else formally linked to the organization. An indirect stakeholder is a member of the community who is not directly involved in the organization but who is affected by its behaviour, such as a resident in its immediate community” (Clegg et al, 2011:405)
In contrast, stakeholder evidence involves subjective feelings and perceptions - so reliability and validity is not the major issue.
Critical appraisal instead focuses on whether stakeholder evidence accurately represents the feelings and perceptions of all stakeholders in that group. A key idea is that the type of evidence determines how the evidence is critically appraised.
Types of stakeholders
Stakeholders take a variety of forms. As a result, there are many ways of classifying stakeholders.
The most common distinction is probably between internal stakeholders (for example, employees, managers and board members), connected stakeholders (for example, customers, suppliers, distributors, financiers and shareholders) and external stakeholders (for example, regulators, government, professional bodies, local communities and the society at large).
Mapping stakeholders related to a decision or problem
A stakeholder map is a useful tool to overcome the decision maker’s biased consideration of a decision’s implications for other people. This map illustrates the potential array of stakeholders related to a specific decision.
Organizational decisions often have lots of stakeholders, both inside and outside the organization. In some situations, this may lead to ‘information avoidance’ - the tendency for decision
Who are the most relevant stakeholders?
After mapping all stakeholders for a decision, the next step is to determine the most relevant. A stakeholder’s relevance is determined by two variables: the extent to which the stakeholder’s interests are affected by the decision (harms and benefits), and the extent to which the stakeholder can affect the decision (power to influence).
Harms and Benefits
Stakeholders vary in how much they are affected by a decision. Some may benefit (e.g., managers or shareholders), while others may face harm (e.g., customers or suppliers). The more a stakeholder perceives they will gain or lose, the more interested they become in the decision. These perceptions matter even if the harms or benefits don’t actually occur. Some stakeholders may be unaware of their stake, or unable to act, but their inclusion still affects the overall decision quality.
Power to Influence
Stakeholders’ ability to influence a decision depends on their power, which can stem from their formal authority or their capacity to persuade others. The more power a stakeholder has, the greater their potential to shape outcomes. Stakeholders with both high interest and high power are typically the most relevant in decision-making processes.
Whom to ask?
- Who could affect this decision, its implementation or its outcome?
- What are their interests and concerns?
- What are their feelings and perceptions of this decision?
- How much influence do they have?
- Do they have legal rights to participate in this decision?
- How could they affect the decision?
- Do they have the power to block the decision or impede its implementation?
- Who could be affected by this decision?
- What are their interests and concerns?
- What are their feelings and perceptions of this decision?
- Who may experience harm from this decision?
- What are their interests and concerns?
- What are their feelings and perceptions of this decision?
- How well are their interests balanced with those who may benefit?
- Who may stand to benefit from this decision?
- What are their interests and concerns?
- What are their feelings and perceptions of this decision?
- How well are their interests balanced with those who may be harmed?
Using the answers to these questions, you should be able to fill out the stakeholder map and the power/interest diagram, and determine who are - given the decision at hand - the most relevant stakeholders. In general, these are the stakeholders to consult in the decision process.
problem definition entails at least four elements:
1. The problem itself, stated clearly and concisely. (What? Who? Where? When?)
2. Its (potential) organizational consequences.
3. Its assumed major cause(s).
4. The PICOC (Population, Intervention,
Important questions you can ask are:
1. Do you agree on which solution is the ‘best’ and/or ‘most feasible’?
2. Do you see downsides to or unintended negative consequences of the preferred solution?
3. Do you see alternative solutions to the problem that may work better?
How to ask?
Quantitative methods involve collecting numerical data through tools like surveys, structured interviews, and tests. They are useful for measuring stakeholder perceptions (e.g., how many stakeholders feel a certain way), but less suitable for exploring the nature of those perceptions.
Qualitative methods collect non-numerical data through interviews, focus groups, or text analysis. These methods help explore stakeholders’ deeper feelings, motivations, and opinions, often expressed in their own words.
Focus groups are a popular qualitative tool where 6–10 people discuss a topic moderated by a facilitator. They allow for rich, interactive insights but must be well-managed to avoid bias like groupthink.
Qualitative interviews can be structured (fixed questions), unstructured (free-flowing), or semi-structured (guided with flexibility). Semi-structured interviews are common as they balance consistency with exploration. Transparency, neutrality, and careful wording are key to getting honest, valuable responses.
Recording interviews and focus groups is recommended to ensure accuracy and minimize bias.
flow chart: acquire
- identify all stakeholder groups affected by the decision
- identify stakeholders interests and determines potential harms and benefits
- determines stakeholders power to influence the decision-making process
- identify the most relevant stakeholder by mapping their power and interests
- determines which questions to ask based on the problem/solution definition and PICOC
- determine which stakeholder to ask (whole population, sample)
- determine how (method) the evidence will be obtained
- acquire the evidence
Stakeholder Theory
- “The theory that successful businesses must consider and create value for their many stakeholders” (Luhman & Cunliffe, 2013: 153)
- Emphasis on engagement, managing the interests of multiple groups, rather than those simply of shareholders
- The need to focus on individuals and groups whose support is necessary for the success and survival of an organization
- Seeking balance and integration with competing interests
Stakeholder management
- A new strategy may be welcomed or viewed as a threat by stakeholders
- Natural tendency for stakeholders to align themselves with one position over another
- Who is supportive of us? Who is obstructive? Who is ambivalent?
- Helpful to understand actor’s positions as this has may have consequences for change outcomes
- Stakeholders are not a ‘homogenous’ group – each carry different levels of
POWER and ATTENTION
Power & decision-making
“Power is the ability of individuals or groups to persuade, induce or coerce others into following certain courses of action.” (Johnson et al, 2017: 136)
“Political competence” means being the kind of manager who can get things done, despite resistance, because they are skilled at political games (Bacharach, 2005: 93)
Pluralistic organizations
- Characterized by multiple objectives, diffuse power, and knowledge-based work processes
- Includes many individuals and groups from a variety of professional backgrounds or specialisms (who don’t always agree on everything).
- Decisions are openly challenged and contested (Denis et al, 2007: p179)
- Competing institutional logics
- Faulty assumptions of homogeneity
- Stereotyping others by role
- Integrated care services (‘the romance that sometimes never lasts’)
- Group inter-dependency is necessary (but perhaps unwanted)
Representativeness
- Representativeness is a major indicator of stakeholder evidence quality
- Does the data gathered accurately represent the sample?
- The more representative the sample, the more confident we can be that we can generalize the evidence to the whole population (or group)
- Is the evidence trustworthy if only a small sample is involved?
- Were stakeholders given the opportunity to freely express their views? (recall ‘organizational silence’)
What ethical issues to consider in the decision-making process?
- Who to involve in the process (i.e. ‘who is in and who is out’?)
- Who to listen to the most, and who we say we will ‘listen’ to
- Who we share decision outcomes with (i.e. who do we trust?)
Common ethical issues to make decisions about:
- HR & workforce matters / Supply chain environmental issues / Sustainable investment / Commercial sponsorship / Conflicts of interest etc
Power and participation
- Who should be involved is an inherently political issue (Johnson et al, 2013)
- HRM literature has long-promoted inclusive approaches to increase create a sense of employee ownership and increase commitment to change(Guest, 1989)
- Benefits in top management gaining knowledge via lower-level participation (Quinn, 1980)
- Participative decision-making viewed as important in pluralistic settings where power is diffused and stakeholders have widely divergent objectives (Denis et al, 2001)
- Participation useful for “winning people over” (Ackerman et al, 2005:27)
- Redistribution of power (post-decision making) can creative rivalry and conflict during implementation(Knights & Morgan, 1991)
- Potential loss of top management control by initiating inclusive approach than can lead to implementation failure (Whittington, 2001)
- Wider participation unattractive to top management due to time requirements (Nutt, 1999)
- Wider participation viewed as frustrating, wasteful, and divisive by top management (Quinn, 1980)
- Participation alone cannot generate support for change – procedural fairness is necessary(Chakravarthy & Garguilo, 1998)
The benefit of politics in decision-making
- Politics as a system of influence can act in a Darwinian way to ensure the strongest members of an organization are brought into positions of leadership
- “Political games not only help suggest who those stars are, but also help to remove their weaker rivals from contention”
- Politics can ensure that all sides of an issue are fully debated, whereas the other systems of influence may promote only one
- Politics may be required to stimulate necessary change that is blocked by the more legitimate systems of influence
- Politics can ease the path for the execution of change (Mintzberg et al, 2009:253-254)
Achieving favourable decision outcomes
- How decisions can be more critical than any other factor are arrived at
- Procedural fairness: influences people’s support for decisions, decision-makers, and for organization (Brockner, 2002)
- Participants social/psychological needs are satisfied when they interact with others who are procedurally fair (Tyler, 1997)
- Procedural justice: perceptions of the processes used to deliver the [strategy-making] outcomes (Kim & Mauborgne, 1995)
- Procedural rationality: that procedures are coherent, robust, and understood Showing concern for a process that is explainable and comprehensible(Ackermann & Eden, 2005)
The Impact of the Decision
When appraising stakeholder evidence, it’s essential to first assess its practical relevance—the impact the evidence has on decision-making. This involves evaluating two types of impact:
Practical Relevance – If powerful stakeholders view a decision negatively and have the power to block or disrupt it, their perceptions can significantly influence the outcome. Tools like the power/interest diagram help identify these stakeholders.
Ethical Relevance – This relates to how a decision might harm certain stakeholder groups, especially if the harm is perceived as unfair. Ethical concerns arise not only from who is harmed but also from who benefits. Even well-intended decisions (like layoffs or product innovations) can raise ethical issues if their impacts are unevenly distributed.
representativeness 2
Representativeness
→ Representativeness refers to how accurately a sample of stakeholder opinions reflects the broader group, which is essential for judging the quality and trustworthiness of stakeholder evidence.
Why Representativeness Matters
→ Because stakeholder evidence is based on subjective perceptions, it’s crucial that the sample accurately reflects all relevant views to ensure findings are generalizable.
Two Key Factors in Trustworthy Stakeholder Evidence
→ Stakeholder evidence is most reliable when stakeholders can freely express their views and when the sample is truly representative of the full population.
Sampling Challenges
→ Achieving a representative sample is difficult, as even large or random samples can contain bias and may not fully reflect the stakeholder population.
Improving Representativeness
→ To improve representativeness, practitioners should use random sampling, compare sample characteristics to the full group, and adjust methods if disparities are found.
Identifying Relevant Stakeholders
Use a power/interest diagram to identify which stakeholders are most relevant to the decision being made.
Ideal vs. Practical Sampling
While including all stakeholders would be most representative, practical constraints usually require selecting a smaller sample.
Sample Size vs. Representativeness
A common misconception is that a large sample guarantees representativeness, but even large random samples can be unrepresentative.
The Problem of Selection Bias
Selection (or sampling) bias occurs when the selected group doesn’t reflect the broader population, leading to misleading results.
Minimizing Bias through Random Sampling
Random sampling helps reduce bias by giving each stakeholder an equal chance of being selected, though it’s not foolproof.
Checking Sample Characteristics
Always compare your sample’s characteristics to those of the full population using base statistics to assess how representative it truly is.
