Lesson 2 - The Stakeholder Approach to Management

Question 1

What is the definition of stakeholders?

Answer 1

Individuals or groups with an interest, claim, or right in the organization’s actions, decisions, policies, or goals

Question 2

What types of “stakes” can stakeholders have?

Answer 2

Interests (affected by decisions), legal rights (treated/protected in a certain way), and ownership (legal title to assets)

Question 3

What are the three views of the firm regarding stakeholders?

Answer 3

Production View (focus on suppliers and buyers), Managerial View (includes owners and employees), and Stakeholder View (recognizes interactions with various groups)

Question 4

Who are primary stakeholders?

Answer 4

Shareholders, employees, customers, suppliers, and local communities - directly impacted by the firm’s actions

Question 5

Who are secondary stakeholders?

Answer 5

Media, activist groups, competitors, governments, and civic institutions - indirectly impacted but influential

Question 6

What attributes can be used to evaluate stakeholders?

Answer 6

Legitimacy (validity of claims), Power (ability to influence decisions), Urgency (need for immediate attention), and Proximity

Question 7

What are three approaches to stakeholder management?

Answer 7

Strategic (profit-driven focus), Multifiduciary (ethical responsibility toward stakeholders), and Synthesis (balance fiduciary and ethical duties)

Question 8

What is an example of nonsocial stakeholders?

Answer 8

Environment, future generations and nonhuman species

Question 9

What are the three levels of stakeholder management capability?

Answer 9

Rational level, process level, and transactional level