Click on each step to know more about it. Developed by Dr. Sriram Rajagopalan.
Identify
Assess
SWOT
CSR
Address
Identify Statkeholders
For global, corporate, business, or functional strategies, leaders' identification of stakeholders that potentially have an influence or impact on the outcomes is paramount.
The first group of stakeholders are the powerful internal and external stakeholders and their needs. Internal leaders that support the products or services are as important as the external shareholders that can liquidate the stocks impacting the market cap.
The next group of stakeholders are the customers, suppliers, local community groups and union. Any dissatisfaction from these groups may impact the operations and brand image.
Stakeholder's Interests
Strategic leaders assess the stakeholders' needs, expectations, and wants. The goal is to differentiate the absolute requirements from negotiable claims. From this list of clear requirements, strategic leaders will establish the priority.
The stakeholder assessment can be evaluated based on power, influence, and interest or through the saliency model using power, legitimacy, and urgency. The time to engagement and the nature of engagement differs based on stakeholders and their absolute and relative power.
Identify Opportunities and Threats
According to the SWOT analysis, the opportunities and threats are external forces. If external stakeholders are identified, then, the opportunities and threats from using them within our strategy must be factored. The external stakeholders' strengths and weaknesses therefore will present as opportunities or threats for our objectives.
Effective understanding and implementation of risk management discipline is critical in this phase. Whether we use the external vendor's raw materials or supplies in manufacturing, or use external consultants for their expertise and thought leadership in developing our products or services, or depend on external firms for their network in the distribution logistics, there are positive and negative risks depending upon how they conduct their business.
Identify Social Responsibilites
Just like our external stakeholders can present opportunities or threats, we can represent opportunities or threats to our stakeholders. How we present ourselves as a corporate citizen for the larger community can impact whether our stakeholders will continue to work with us and in what capacity.
One approach that strategic leaders can take is asking what economic, legal, ethical, and philanthropic responsibilities we have to our stakeholders. This approach is called as the corporate social responsibility. The extent to which we should exhibit this responsibility connects how well the stakeholders will work with us.
Address Stakeholders Concerns
This final step in the stakeholder impact analysis phase is addressing the concerns identified in these earlier four stages. Some of these concerns may be explicitly raised by the stakeholders or implicitly inferred by the strategic leaders.
The goal of this phase is to evaluate what specific activities must be done to address the stakeholders' concerns, and how to communicate the ongoing updates as part of the strategy to engage with stakeholders. Using such stakeholder engagement strategy helps strategic leaders to manage the diverse group of stakeholders to gain and sustain the competitive advantage.
