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Today1. Presentation

2. Break3. Sustainable Fishing Case

4. Interactive Game

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Session IIStakeholder Management

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Stakeholder Management

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Stakeholders• Definition– any individual or group which affects or is affected by

the organization

• Stakeholder management: – Balancing the competing preferences or claims of

specific stakeholders (SH)

• Stakeholder saliency– Power – how much can they influence the organization?– Legitimacy – are their claims legitimate? actions

appropriate?– Urgency – do their claims require immediate attention?

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Stakeholder management• 3 approaches– Descriptive: legal requirement – "have to" deal with SH– Instrumental / pragmatic: see SH as means to reach

performance goals – "makes business sense"– Normative: the morally right thing to do – "should"

• Tools – Stakeholder mapping– Issues and impact charts– Priority table– Influence grid

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Internal

Value Chain

External

ExternalNGOs, communities, government, media, unions, banks,…

Value chainCustomers, suppliers

InternalEmployees, managers, shareholders

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Typical stakeholder map

Firm

Government

Political groups

Shareholders

Financial institutionsSpecial

interest groups, NGOs

Customers

Suppliers

Unions

Employees Media

Competitors

Consumer

groups

Trade assns.

Community

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ESC Rennes' stakeholders

ESCR

National government ministries

Accrediting bodies CCI

Financial institutions

Prospects

Students

Suppliers

Unions Employees

Media

Competitors

Companies

CGE - French bus. school

assn.

Local government

Alumni

Parents

International partners

French feeder schools

Management

FacultyAdmin.

staff

Program

Nationality

Associations

French partner schools

Issues?

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Stakeholder management5 key questions

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1. Who are our stakeholders?

Stakeholder map

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Stakeholder management5 key questions

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2. Which SH are priority in terms of:

• Legitimacy?• Power?• Urgency?

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Stakeholder management5 key questions

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3. Which opportunities (potential cooperation) and threats

(potential risks) do SH represent?

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Stakeholder management5 key questions

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4. What are our responsibilities towards SH?• Economic

• Legal• Ethical

• Philanthropic

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Stakeholder management5 key questions

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5. How to manage SH claims, relations?• Directly or indirectly, i.e., lobbying• Proactively or defensively• Negotiation strategy: win-win, competitive,

accommodate, compromise• Formalize SH relations within the organization:

centralized vs. decentralized

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Issues and impactsSH Human

rightsTechnology implementation

Economic impact

Safety / social impact

Environmental impact

Proposed legislation

Customers

Suppliers

Employees

Regulators

Unions

NGOs

Investors

Unions

Media

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Priority tableSH Ability to help us Ability to hurt us Likelihood of acting Overall priority

Customers

Suppliers

Employees

Regulators

Unions

NGOs

Investors

Unions

Media

Score from 1 (least) to 5 (most)

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Influence Grid

Low

Low

High

High

Su

pp

ort

Influence

EMPOWER

MONITOR

PARTNER

ENGAGE

Work together to achieve common goals

Influence their thinking

Enhance their influence

Track behavior and communications

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Something fishyCase study

• You are a purchasing manager for a multinational food company specializing in the sale of fresh tuna and frozen fish products.

• You have sub-contracted fishing boats using nets which, in addition to catching tuna, ensnare and kill dolphins.

• Your office regularly receives scientifically-valid reports from government and environmental protection agencies about the depletion of the world’s oceans. One of them, the Marine Stewardship council (Fr.) keeps a close eye on your company’s operations and offers a sustainable fishing label which you really haven’t investigated.

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Something fishyCase study

• Some of your fishing boats have physical confrontations with Greenpeace which oppose excessive fishing and the mistreatment of dolphins.

• In addition, the media (video) draw regular attention to the plight of dolphins ensnared in nets.

• Some of your customers, like the Auchan hyper market chain, have already taken a position, and you’ve lost their business. What if other retailers follow suit?

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Something fishyCase study - your turn!

• Work in small groups for 30 mn. to analyze this situation – Opportunities and risks– Which negotiation strategy / approach– Use SH map and influence grid tools

• More specifically, which strategy to use in dealing with Greenpeace? see video. Remember that Greenpeace is a large organization with its own issues.

• Make recommendations

• How specifically would you manage SH relations?

• Be ready to present your analysis and recommendations Short PPT

Click for video on Greenpeace warrior spirit

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Types of NGOs

Company focusedDirect opposition

Greenpeace, Human Rights Watch

Policy focusedLobby to shape opinion

and legislationAmnesty Int’l., World Conservation Union

Issue focusedSolve specific

environmental, economic, or social problems

Care, Int’l. Red Cross

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Stakeholder Issue - WaterThe next battle

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Water issues• Conservation– Garric, Audrey (2012), Qui consomme vraiment

l’eau de la planète ? , Le Monde, accessed 2012 02 17

• Accessibility

• Pollution

• Privatization of water utilities– Argument for: efficiency, service, less corruption– Argument against: full-cost recovery, the nature

of water (a public good – should be managed by the government)

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Privatization failures

• Véolia and Suez Environment in Paris and Budapest

• Suez Environment, U.S.

• Coca Cola video: facts on water, 2007 partnership with WWF

• Nestlé

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Coca Cola Bottling PlantKerala, India

• $ 1 bn. invested in Indian business 1993-2004

• Problems– Used 510,000 liters of groundwater daily– Water table levels fell by 8 – 12 m

• Kerala bottling plant– 2001-03 Campaign to close plant– 2004 court order closing plant

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Coca Cola Bottling PlantReaction, stakeholder issues

• Reaction–Reduced water use by 24% in plants– Installed rainwater collection systems in 26

of their plans• Stakeholder partnerships of Coca Cola with–Water Stewardship Initiative*–WWF (partnership policies)–Attention paid to water footprint– See also Alliance for Water Stewardship

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Coca Cola Bottling PlantCommitments to:

•Reduce

•Recycle

•Replenish

• See WWF India's partnership policy

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NestléBottled water

• Arguments against– Wastefulness: 3 l. water 1 l. bottled water– Transportation costs– Plastic bottles, recycling– Tap water is a free, healthy substitute

• Arguments for: health• Toronto's ban on bottled water• See Story of Bottled Water video and city of Cleveland’s

(SH) reaction

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NestléSH management

• Ad campaign

• Hired lobbyist to fight against municipal bans

• Nestlé was accused of hiring a security firm to spy on NGO ATTAC in Switzerland and Colombia.

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Stakeholder managementKey points

• Map your stakeholders

• Prioritize claims and issues in terms of legitimacy, power, and urgency:

–Use the stakeholder influence grid to segment SH in terms of support and influence

• Scenario planning: –Consider opportunities and risks– Integrate these into company objectives and

strategy29

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Stakeholder managementKey points

• Develop internal SH management capability

– Generally speaking, be pro-active, take initiatives

– Determine negotiation strategy with respect to each SH: win-win, competitive, accommodation, negotiation, compromise.

– Formalize relations: communication strategy and tools

– For staff with frequent SH interactions• Train them in key issues and negotiation

approaches• Involve them in strategic decisions

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