Stakeholder Analysis

AbstractAn organization has relationships with multiple constituencies that create value for the organization: employees, suppliers, customers, financiers, and so on. Some of these constituencies become vulnerable by voluntarily placing various bets and wagers on the outcomes of the organization; shareholders buying shares in a limited liability company is the most obvious example. We use the label stakeholder to refer to those constituencies who, by virtue of their participation in the organization, have placed sizable bets on organizational outcomes and, consequently, have something significant at stake. The purpose of the stakeholder analysis discussed in this chapter is to evaluate which constituencies have most at stake and how their cooperation can be secured by implementing the requisite governance safeguards. Because we view stakeholder governance not as a matter of categorizing constituencies into stakeholders and non-stakeholders but, rather, as a matter of degrees, informed prioritization of stakeholders becomes essential.