May enable firm to charge premium prices and gain brand loyalty
May help generate enduring relationships with suppliers and distributors
Can attract outstanding employees
Can utilize the goodwill of public officials for support in difficult times
Characteristics of Sustainability
Environmental Economic Social
Corporate Stakeholders
Stakeholders
have an interest in the business and affect or are affected by the achievement of the firm’s objectives
Enterprise strategy
an overarching strategy that explicitly articulates the firm’s ethical relationship with its stakeholders
Stakeholder Analysis
Stakeholder analysis
the identification and evaluation of corporate stakeholders
usually done in a three-step process
Stakeholder Analysis
The first step in stakeholder analysis is to identify primary stakeholders.
Primary stakeholders
have a direct connection with the corporation and who have sufficient bargaining power to directly affect corporate activities
include customers, employees, suppliers, shareholders and creditors
Stakeholder Analysis
The second step in stakeholder analysis is to identify the secondary stakeholders.
Secondary stakeholders
have an indirect stake in the corporation but are also affected by corporate activities
include NGOs, activists, local communities, trade associations, competitors and governments
Stakeholder Analysis
The third step in stakeholder analysis is to estimate the effect on each stakeholder group from any particular strategic decision.
Stakeholder Input
Once stakeholder impacts have been identified, managers should decide whether stakeholder input should be invited into the discussion of the strategic alternatives.
A group is more likely to accept or even help implement a decision if it has some input into which alternative is chosen and how it is to be implemented.
