Stakeholder:

A stakeholder is “any individual or group who can affect or is affected by the actions, decisions,
policies, practices, or goals of the organization.
Primary stakeholders:
The primary stakeholders of a firm include its owners, customers, employees, and suppliers. Also
of primary importance to a firm’s survival are its stockholders and board of directors.
Secondary stakeholders:
include all other interested groups, such as the media, consumers, lobbyists, courts, governments,
competitors, the public, and society. One-way relationship.
Stakes:
A stake is any interest, share, or claim that a group or individual has in the outcome of a
corporation’s policies, procedures, or actions toward others. Stakes may be based on any type of
interest.
How to execute a Stakeholder Analysis:
A stake is any interest, share, or claim that a group or individual has in the outcome of a
corporation’s policies, procedures, or actions toward others. Stakes may be based on any type of
interest
 Who are our stakeholders currently?
 What are our potential stakeholders?
 How does existing stakeholder affect us?
 How do we affect each stakeholder?
 For each division and business, who are the stakeholders?
 What assumptions does our current strategy make about each important stakeholder (at
each level)?
 What are the current “environmental variables” that affect us and our stakeholders
(initiation, GNP, prime rate, confidence in business [from polls], corporate identity, media
image, and so on)?
 How do we measure each of these variables and their impact on us and our stakeholders?
 How do we keep score with our stakeholders?
The stakeholder analysis steps:
1. Map Stakeholder Relationships:
You have to map the relationship with stakeholder. You have to identify your relationship with
your stakeholder. It takes five questions
 Who are our stakeholders currently?
 What are our potential stakeholders?
  How does existing stakeholder affect us?
 How do we affect each stakeholder?
 For each division and business, who are the stakeholders?

2. Map Stakeholder Coalitions:

After you identify and make a map of the stakeholders who are involved with your firm in the
incident you are addressing, the next step is to determine and map any coalitions that have
formed. Coalitions among stakeholder’s form around stakes that they have— or seek to have—
in common. Interest groups and lobbyists sometimes join forces against a common “enemy.”
3. Assess the Nature of Each Stakeholder’s
Next you need to identify the nature of each stakeholder’s interests and responsibilities in a
particular situation. Since each stakeholder has a stake, interest, or claim in the process and
outcomes of the situation, opportunity, controversy, or crisis, it is important to assess the nature
of the focal organization’s responsibilities toward each stakeholder group.
4. Assess the Nature of Each Stakeholder’s Power:
You have to access the stakeholders power. Three types of power stakeholders you can use are
those with:
 Voting Power
 Political Power
 Economic Power

5. Identifying stakeholder Ethics and Moral Responsibilities:

The next step is to determine the ethics, responsibilities, and moral obligations your company has
to each stakeholder.

6. Develop strategy and tactics:

1. Your goal is to create a socially responsible, win– win set of outcomes, if possible. However,
this may mean economic costs to your firm if, in fact, members of your firm are responsible to
certain groups for harm caused as a consequence of your actions.
2. Ask: “What is our business? Who are our customers? What are our responsibilities to the
stakeholders, to the public, and to the firm?” Keep your values, mission, and responsibilities in
mind as you move forward.
3. Consider probable consequences of your actions. For whom? At what costs? Over what period?
Ask: “What does a win– win situation look like for us?”
4. Keep in mind that the means you use can be important as the ends you seek; that is, how you
approach and treat each stakeholder can be as important as what you do.
Type 1:
The Supportive stakeholder with a low potential for threat and high potential for cooperation. Here
the strategy of the focal company is to involve the supportive stakeholder. Think of both internal
and external stakeholders who might be supportive and who should be involved in the focal
organization’s strategy.
Type 2:
The Marginal stakeholder. This stakeholder has a low potential for both threat and cooperation.
Such stakeholders may not be interested in the issues of concern. The recommended strategy in
this situation is to monitor the stakeholder, to “wait and see” and minimize expenditure of
resources, until the stakeholder moves to a Mixed Blessing, Supportive, or Nonsupportive position.
Type 3:
The Nonsupportive stakeholder, who shows a high potential for threat and a low potential for
cooperation, represents an undesirable stance from the perspective of the influencer. The suggested
strategy in this situation calls for the focal organization to defend its interests and reduce
dependence on that stakeholder.
type 4
Stakeholder is a Mixed Blessing, with a high potential for both threat and cooperation. This
stakeholder calls for a collaborative strategy. In this situation, the stakeholder could become a
Supportive or Nonsupportive type. A collaborative strategy aims to move the stakeholder to the
focal company’s interests.
7. Monitor Shifting Coalitions:
Because time and events can change the stakes and stakeholders, and their strategies, you need to
monitor the evolution of the issues and actions of the stakeholder
Summary of Stakeholder Analysis
Stakeholder analysis provides a rational, systematic basis for understanding issues and the “ethics
in action” involved in complex relationships between an organization, its leaders, and constituents.
It helps decision makers structure strategic planning sessions and decide how to meet the moral
obligations of all stakeholders

Marketing and Sales Professionals and Managers as Stakeholders:

Sales professionals and managers are continuously engaged— electronically and/or face- to-
face—with customers, suppliers, and vendors. Sales professionals must continually balance their
personal ethics and their professional pressures.
Another key question for sales professionals particularly is: “Where is the line between
unethical and ethical practices for me?” Also, because customers are an integral part of
business, these professionals must create and maintain customer interest and loyalty. They
must be concerned with consumer safety and welfare, while increasing revenue and obtaining
new accounts.
A major moral dilemma for marketing managers is having to choose between a profitable
decision and a socially responsible one. Balancing company profitability with human rights
and interests is a moral responsibility of marketers.

R&D, Engineering Professionals, and Managers as Stakeholders:

R&D managers and engineers are responsible for the safety and reliability of product design.
Faulty products can mean public outcry, which can result in unwanted media exposure and
possibly (perhaps justifiably) lawsuits. R&D managers must work and communicate
effectively and conscientiously with professionals in manufacturing, marketing, and
information system
Moral dilemmas can arise for R&D engineers whose technical judgments and risk assessments
conflict with administrative managers seeking profit and time- to- market deadlines.

Public Relations Managers as Stakeholder

PR managers are responsible for transmitting, receiving, and interpreting information about
employees, products, services, and the company. A firm’s public credibility, image, and
reputation depend on how PR professionals manage stakeholders because PR personnel must
often negotiate the boundaries between corporate loyalty and credibility with external groups.
Moral dilemmas can arise when PR managers must defend company actions that have possible
or known harmful effects on the public or stakeholders. A stakeholder analysis can prepare PR
managers and inform them about the situation, the stakes, and the strategies they must address.
Human Resource Managers as Stakeholders
Human resource managers (HRMs) are on the front line of helping other managers recruit,
hire, fi re, promote, evaluate, reward, discipline, transfer, and counsel employees. They
negotiate union settlements and assist the government with enforcing Equal Employment
Opportunity Commission (EEOC) standards. HRMs must translate employee rights and laws
into practice.
Moral dilemmas can arise for these managers when affirmative action policies are threatened
in favor of corporate decisions to hide biases or protect profits.
Summary of Managerial Moral Responsibilities
Expert and functional area managers are confronted with balancing operational profit goals
with corporate moral obligations toward stakeholders. These pressures are considered “part of
the job.” Unfortunately, clear corporate directions for resolving dilemmas that involve conflicts
between individuals’ rights and corporate economic interests generally are not available. Using
a stakeholder analysis is “like walking in the shoes of another professional”: you get a sense
of his or her pressures. Using a stakeholder analysis is a step toward clarifying the issues
involved in resolving ethical dilemmas.

Three Issue management:

First Approach: Six- Step Issues Management
Process The first method, as noted, is the most straightforward and most appropriate for
companies or groups scanning the environment for issues that can impact their businesses and
internal environments.
1. Environmental scanning and issues identification.
2. Issues analysis.
3. Issues ranking and prioritizing.
4. Issues resolution and strategizing.
5. Issues response and implementation.
6. Issues evaluation and monitoring.

Second Approach: Seven- Phase Issue Development Process

Issues are believed and have been observed to follow a developmental life cycle. Views differ
on the stages, phases, and time involved in such a life cycle.
1. A felt need arises (from emerging events, advocacy groups, books, movies).
2. Media coverage is developed (television segments)
3. Interest group development gains momentum and grows.
4. Policies are adopted by leading political jurisdictions (cities, states, counties).
5. The federal government gives attention to the issue (hearings and studies).
6. Issues and policies evolve into legislation and regulation.
 7. Issues and policies enter litigation.

Third Approach: 4 stage issue life cycle:

1. Social Expectation:
 Social Discussions and debate
 Interest Group Attention
2. Political Awareness:
 Media Attention
 Legislation Initiated
 Hearing Held
3. Legislation:
 Law Passed
 Legal Involvement
 Regulation Enacted
4. Social Control:
 Compliance Issues
 Legal conflicts
 Court Ruling

Corporate Social Responsibility:

Corporate Social responsibility refers to the positive and intelligently objective concern for the
welfare of the society that restrict the individual and corporate behaviors that are destructive and
this does not matter the immediately profitable it will be.
There is a Social Responsibility of Business:
Yes, there is a social responsibility for every organization if they fulfill their social responsibility
then it benefits the society if they don’t it’s not obligatory. If the business fulfills it then it is ok
but it is not obligatory.
What is the nature of Corporate Social Responsibility:
There is no specific nature of corporate social responsibility. CSR is anything which benefit the
society and have lasting advantages. Any activity any level of action that has positive effect on
betterment of the society and contributing to human betterment.
Example:
Open hospital for poor peoples which will benefit all society.
NGO:
NGOs performs two types of business
  Some NGOs guide people and provide them time, resources and technology to establish a
business.
 If people don’t have business then they invest in different houses or provide job.

In the End, Does Good Ethics Mean Good Business?

Yes good ethics means good business because executives and firms that maintain a good corporate
image, practice fair and equitable dealings with customers and employees, and earn profits by
legitimate, legal means are de facto ethical.

How Does a firm evidence its satisfaction of that responsibility?

Firms perform survey activities and identify the needs of people or society and develop good
intentions to fulfills the need of the people or society and then evaluate and compare before and
after situation, how much successful they are in achieving their objectives regarding the betterment
of the society.
Principles of CSR:
1. Manager should acknowledge and actively monitor the concerns of all legitimate
stakeholders, and should make their interest appropriately into account in decision making
and operations.
2. Mangers should listen to and openly communicate with stakeholders about their respective
concerns and contributions, and about the risk that they assume because of their
involvement with the corporation.
3. Manager should adopt processes and modes of behavior that are sensitive to the concerns
and capabilities of each stakeholder constituency
4. Manager should recognize the interdependence of efforts and rewards among stakeholders
and should attempt to achieve a fair distribution of the benefits and the burdens of corporate
activity among them, taking into account their respective risk and vulnerabilities.
5. Managers should work cooperatively with other entities both public and private to ensure
that risks and harms arising from corporate activities are minimized and, where they cannot
be avoided appropriately compensated.
6. Managers should avoid altogether activities that might jeopardize inalienable human rights
for example the right to life or give rise to risks which if clearly understood would be
patently unacceptable to relevant stakeholders.
7. Manager should acknowledge the potential conflicts between (a) their own role at
corporate stakeholders and (b) their legal and moral responsibilities for the interest of
stakeholders and should address such conflicts through open communication, appropriate
reporting and incentive systems and their necessary, third party review.
School of thoughts on social responsibility:
1. Ethical Postures, Social responsibility and business practice:
 The ethical prospective of a business often sets the tone for its operations and employees
choice. Based on two responsive question:
 Whose interest should a corporation serve?
 To whom should a corporation be responsive in order to best serve that interest?
There are two only answers to these questions
 Shareholders only and
 Larger society
And the combination of those answers defines the school of thought

2. Inherence:

According to this manager answer only to shareholders and act only with shareholders interest in
mind. This type of manager would not become involve in any political or social issues unless it
was in the share holders best interest to do so and provided the involvement did not back fire and
cost the firm sales.
3. Enlightened Self Interest:
According to this the manager is responsible to the shareholder but serve them best by being
responsive to the largest society. It is based on the view that in the long run business value is
enhanced if business is responsive to the needs of society.
4. Invisible hands:
This school of though is opposite to the enlightened self-interest. According to this philosophy,
business ought to serve the largest society and it does this best when it serves the shareholder only.
They become involved in the issue of social responsibility or in political issues only when society
lacks sufficient information on an issue to make a decision. This school of thought holds that it is
best for the society to guide itself and that businesses work best when they serve shareholders.
5. Social Responsibility:
In this school of thought the role of business is to serve the larger society and that is best
accomplish by being responsive to the larger society. This view is simply a reflection of the idea
that businesses by being responsive to society and its need. These business believe that their sense
of social responsibility contribute to their long term success.
Ethics and Marketing
It is something that is done to customer and something that customer have to watch out for. It
generates unwanted needs for customers and they charge artificial high prices that why it is also
called necessary evil. Marketing focus on differentiation of product from its competitors.
Marketing plans 90% role in the growth of business.
We cannot align ethics and marketing. Marketing generate artificial needs which are unethical.
Example:
Color White cream.

Ethical Theory:
1. Teleological:
The outcome of customer satisfaction, a good outcome justifies the mean used by marketer
to achieve the outcome. It is the explanation of purpose for which they serve. They serve
instead of the causes by which they arise. They don’t focus on needs. Everything has
specific use.

2. Deontological:
Morality of an action should be based on weather that action itself is right or wrong under
a series of rules rather than based on consequences of that action. Action is good or bad
based on itself goodness.
Example:
Cigarette

Difference:

Teleological Deontological
They serve for the purpose They focus on morality of actions
There are no rules and regulations in They must follow the rules
teleological
They do not focus on need They focus on actions
This concept is freedom based Boundaries are assigned in it
Example are Example are Cigarette ads

This issue cannot be resolved it is fall for resolution.

Far for Resolution:
1. Its legal, isn’t it?
When we talk about marketing is it legal or not. Marketing is legal but in some prospective it
is unethical. To regulate the ethics and marketing you should make the ad legal as well as
ethical.
  Legal but unethical is minus point
 Legal but ethical is plus point

2. Does customer really care about ethics?

Mostly many customers not cares about ethics. Customers consider ethics in purchasing
decision when ethics affect them directly. They did not favor ethical firms over unethical
firms.

3. Where are the Ethical policies?

Ethical policies are made by the public, consumer group and member of media creates
ethical policies.

4. Ethical Environment: a moving target

Ethical environment changes rapidly. You have to change the environment but you do not
have to change the ethics. Environment changes with the passage of time but wee should
need to evaluate our ethics with the changing environment but it is not necessary to change
the ethics with the environment.

5. Following the money:

If it is ethical then we are benefiting the society and when it is unethical then we are
benefiting the organization where money comes from. So people will involve in unethical
activities. These are basically the changing incentives.

So, know what:

This is concerned with how we correct the marketing; two things are important:
 Self-regulation:
It involves performing the marketing activities deriving the ethical boundaries.
When some company perform an unethical marketing the competitors in the market
are ready to take the advantage of that and look it as opportunity that its competitors
failed to respond to the ethical environment.
 Benefit to the Society:
Marketer needs to consider the corporate social responsibilities they have to
perform such marketing activities that provide benefit to the society and the
marketers too. From teleological prospect, both society and organization achieve
the good outcome.