BUS 205 week 1 Discussion

2 Stakeholders and Stakeholder Analysis Kaisorn/iStock/Thinkstock Learning Objectives After reading this chapter, you should be able to:1. Explain the idea of corporat e stakeholders.

2. Analyze social and stak eholder networks.

3. Apply a stak eholder analysis to a corporate environment and apply the steps to initiate stakeholder dialogue.

4. Describe the significance of deontological ethics and utilitarian ethics corpor ate collaborations.

2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.1 Identifying Stakeholders Pretest Questions 1. A shar eholder and a stakeholder are the same thing. T/F 2. Social netw orks are static. T/F 3.

Dialogue is a w ay to create new and useable information. T/F 4.

“Seek the gr eatest good for the greatest number of people” is a good way to sum up the guiding philosophy behind deontological ethics. T/F Answers can be found at the end of the chapter. Introduction Chapter 1 discussed the importance of building sustainable corporations. Running a socially responsible organization requires multiple people in the organization to work toward this goal. The word corps means a body of people engaged in a collective action. But who consti- tutes the “corps” in corporation? Achieving sustainability involves understanding the “who” of corporations—the human beings who work within them and help determine their work culture and behavior patterns.

Achieving corporate sustainability also requires identifying opportunities and problems and turning to corporate actors (and outsiders) to help address them. Most corporate systems are incredibly large and complex, and they involve a lot of people. Reasonable boundaries are needed to delineate the responsibilities of leaders, managers, and employees. We need to define who is closest to an issue and who is responsible for generating solutions to problems.

In order to understand the corporate system and its characteristics, one must first define the system. Social network theory helps categorize people in and around a corporate system (the stakeholders of the firm) and how they relate to each other and the organization.

This chapter discusses categories and types of stakeholders and social network theory. In the modern context, businesses use electronic media to create social networks of people who are connected in some way to the firm and its employees. This chapter also explores how individ - uals can map more personal social networks. Networks can help people achieve goals, which makes them powerful and gives those who direct and control them power, too. With that in mind, this chapter also explores the idea of power and the difference between individual and emergent power. Understanding social networks involves understanding where power and responsibility rest—as well as where socially responsible actions can have the greatest impact. The final section of the chapter examines how to run a formal stakeholder analysis and create mutually beneficial dialogue with stakeholders. 2.1 Identifying Stakeholders This chapter builds on the earlier discussion of systems theory and proposes taking a systems view of stakeholders , or the people and firms that interact with and are affected by corpo - rate operations. One way corporations can act in a sustainable and socially responsible way \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.1 Identifying Stakeholders involves considering and accounting for all entities who are affected by their actions. This means managers need to understand how to identify these entities. One way to do so is to use social networks and develop appropriate communication strategies that allow corporations to both reach and learn from all parties affected by corporate behavior.

In any publicly traded corporation, the shareholders (or stockholders) are those who have paid money to own part of the company. An older view of corporations suggests that stake- holders and shareholders are the same group of people. From such a vantage point, owners are the primary ones who matter. People who hold this view believe that only those who have a financial interest in the company should provide input on the company’s strategy. More recently, stakeholder theory introduced the idea that shareholders represent just one of many people who have a legitimate and viable right to impact corporate strategy.

A stakeholder, then, is a person or organization that has something to gain or lose through the outcomes of corporate planning, processes, or projects; or because of the corporation’s ongo- ing function. Prudent leaders know how to identify stakeholders, inform them, solicit their input, learn from them, and engage them in creating an appropriate direction for the com- pany. For example, leaders need the support of at least a subgroup of stakeholders for every leadership decision: Employees must enact new plans, customers need to buy new designs or services, regulators need to approve new construction or new product launches, activists need to approve or stop disapproving of corporate changes, and so on. Thus, all organizations need to have a clear understanding of who their stakeholders are, which stakeholder inter - ests matter, and how to involve stakeholders in creating a common and profitable future. For new and perhaps unusual or controversial social responsibility and sustainability goals, lead- ers need a very sharp understanding of which stakeholders might agree with new ideas and which ones may not. The next sections introduce categories of stakeholders that are present in the modern corporation, including their characteristics and relationships to the corporate social network.

Market and Nonmarket Stakeholders Two broad categories of relationships exist between companies and corporate stakeholders.

The first is between companies and market stakeholders, a term that includes employees, stockholders/shareholders, customers, suppliers, retail wholesalers or dealers, and possibly creditors. What market stakeholders have in common relates to the role each stakeholder plays in getting a product or service to the market or to consumers. Each one has a particular kind of interest (usually financial) in the corporation’s well-being.

The second relationship exists between a company and nonmarket stakeholders (some - times called “secondary stakeholders”). A nonmarket stakeholder has no direct financial relationship to the corporation but has indirect social, environmental, and possibly financial relationships with it. This category includes communities, nongovernmental organizations, the media and media organizations, business support groups such as trade associations, the government, competitors, and even the general public.

An example of how an organizational issue can involve a number of stakeholders comes from the Hyundai Motor Company. Since 2014 Hyundai has recalled millions of cars for various reasons. Engines have failed in thousands of Hyundai cars, resulting in class action lawsuits \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.1 Identifying Stakeholders and settlements. Other factory recalls include malfunctions with braking, electrical, and sus- pension systems, according to the documents posted to the website of the National Highway Traffic Safety Administration (2015).

Who are the stakeholders in this problem? The easy answer is the owners of the company.

Yet the owners reside in Korea and for some period of time may have been largely unaware of the particular problems that affect what is in reality a small percentage of Hyundai vehicles.

Customers certainly represent stakeholders because they invest in the safety of a particular vehicle. Hyundai customers’ behavior may impact Hyundai employees’ behavior, since con- sumer reactions relate to employee options (more customers equal more work and employ - ment, fewer customers might mean layoffs or reassignments). Customer complaints regard- ing problems could impact employees or lawyers on a daily basis. The issue also impacts the marketing efforts, as other employees are trying to continue to sell Hyundai cars in the United States. Furthermore, the issue impacts the media, which chooses whether to report the issue and what to report, and it also affects those within the company who deal with the problem’s public relations aspects. Of course, government regulators also become involved, as do people in the legal system who may be involved in the lawsuits that evolve from the mat - ter. Moving outward, other Korean manufacturers become involved too, when they worry if negative press surrounding Hyundai will hurt other Korean brands. In total, there are several thousand stakeholders in this issue that pertains to a select number of cars. It thus becomes very difficult for corporate leaders to identity all the competing and conflicting stakeholder interests and account for them in their corporate stewardship.

Stakeholder Interests Market stakeholders primarily have financially motivated interests in a corporation. Employ - ees enter into a contract with the corporation to provide time and talent in exchange for money. They want a stable relationship with appropriate compensation and a safe working environment. Stockholders offer capital to the corporation and expect an appropriate return on their investment. Consumers hope for product satisfaction. They want an appropriate ser - vice or product in exchange for cash.

Suppliers typically see the corporation as a customer. They supply certain products and ser - vices to it in exchange for a fair profit or payment and possibly for the opportunity to advance a company or mission they admire. Suppliers hope for a stable relationship with the corpora- tion and expect fair and prompt payment for products or services in this business-to-business relationship. Similarly, retailers at the other end of the corporate system want to buy products or franchise services from the corporation and pass them along to a smaller portion of the marketplace. Finally, creditors in the form of banks expect business loan repayment, which is associated with collecting the loan through legal means.

Analysts find it more difficult to identify nonmarket stakeholders, because such stakehold- ers can be any person or entity that has an indirect relationship with the corporation. These stakeholders include communities in which the corporation may have offices, plants, or other properties. In the case of an extractive mining company, for example, nonmarket stakehold - ers include people local to the area, those downstream from any waste or disposal sites, and people who may breathe air or use water possibly polluted by the mine. Nonmarket stake- holders can even include future generations who can or cannot continue to live at or near the \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.1 Identifying Stakeholders site. If such people choose not to or cannot speak for themselves, or if activists in another part of the world take an interest in that population, then activists in distant locations also become nonmarket stakeholders. Nonmarket stakeholders also include the people who use the prod- uct extracted from the mine or use products in which the mined resource is an ingredient.

Think of the materials in most cell phones—everyone with a particular cell phone constitutes a market or nonmarket stakeholder in relation to any chemicals or precious metals that are common across the brand.

Nongovernmental organizations (NGOs) also have a stake in the corporation’s well-being because they monitor corporate actions and ensure they conform to legal and ethical stan- dards to protect public safety. In other words, NGOs want to protect other stakeholder groups.

Regarding the previous example of a mining company, NGOs interested in indigenous rights, historical preservation, or environmental safety become nonmarket stakeholders too. Simi- larly, media, government organizations, and regulators might be nonmarket stakeholders.

Competitors are also impacted by corporate decisions such as changes in price or ingredients, additional or removed features, or new service offerings, so they too become stakeholders.

The list of stakeholders seems extensive and can be overwhelming.

As the web of stakeholders within and around a corporation grows and becomes more com- plex, the analysis expands from market stakeholders to nonmarket stakeholders. Corporate leaders cannot give all stakeholders the same weight. Thus, good leaders need methods to identify, weigh, engage, or disregard stakeholders. Some options for doing so are outlined in the following section.

Albrecht’s Eight Strategic Radar Screens Karl Albrecht, Canadian futurist and coauthor of Service America: Doing Business in the New Economy, categorizes stakeholders in a more complicated typology than market and nonmar- ket. He places stakeholders into categories associated with various issues. For example, cus- tomers have particular issues with corporations that differ from those they have with the gov - ernment. Albrecht claims that leaders draw issues from eight distinct strategic radar screens, or categories. Thoughtful leaders, according to Albrecht, should categorize issues, people, and organizations using these dimensions (Albrecht, & Zemke, 2008). These eight areas include consumer, competitor, economic, technological, social, political, legal, and geophysical envi- ronments (see Figure 2.1).

Consumer Environment Specifically, the consumer environment includes consumers with various demographics and characteristics. Consumers vary by gender, age, marital status, and income, among other fac- tors, and these variations give them certain buying characteristics. For example, social media sites typically feature advertising that targets a younger audience. In contrast, traditional forms of media, such as newspapers and television, feature advertising that targets older con- sumers. These choices reflect the corporation’s understanding that there are multiple con- stituents in the consumer environment and that marketing attempts try to match products and messages with consumer type.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.1 Identifying Stakeholders Figure 2.1: Types of market stakeholder relationships in the corporate environment f02_01 Consumer Geophysical Legal Competitor Economic Political Social Technology The Corporate Environment/ Types ofMarket Stakeholders Source: Adapted from Corporate Radar: Tracking Forces That Are Shaping Your Forces That Are Shaping Your Business , by K. Albrecht, 2000, New York: American Management Association.

Competitor Environment The competitor environment includes organizational competitors; analysis is required to consider their strengths and weaknesses. Competitors help determine how much market share the corporation can attain and how much the firm can expand in a particular market- place. If a competitor is collaborative, firms can gain valuable insight and technology from common-ground collaborations or affiliations in trade associations. There are many exam- ples of competitors that define a particular corporation’s strategic approach. For example, small businesses competing in a small town may change their strategy and become more customer-service oriented or offer specialty products if a large box retail competitor enters the market and changes the competitive and business landscape.

Economic Environment The economic environment includes information about cost, international trade, and other factors. The availability of investment capital, interest rates, and the willingness of loan agen- cies such as banks to provide capital all have a significant impact on the ability of the corpo- ration to do business. In previous generations, many businesses assumed they were isolated from global economic issues. But recent years illustrate that all nations, economies, and the corporations within them remain directly or indirectly connected through an economic web.

For example, at the outset of 2016, global oil prices dropped to a 16-year low (CNBC, 2016).

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.1 Identifying Stakeholders While many companies benefited from the resulting decrease in transportation costs, others closely related to energy laid off workers in anticipation of lost business.

Technological Environment The technological environment includes the development of new technologies and software, as well as the way information flows within corporations. For example, new processes such as cloud-based Internet services allow custom manufacturing companies and service companies to take orders, ship products, or deliver services in a dramatically reduced time frame. This speed allows some companies to be much more competitive. Companies that fail to adopt technologies that enable such customer responsiveness risk losing market share. Technology can also allow the consumer to share thoughts and reactions to products, or even play a role in customizing and producing a product.

Social Environment The social environment represents a mixture of many different voices and influences. This category includes culture, values, beliefs, and social trends that arise among employees and the communities in which corporations reside. For example, when the gaming industry wants to open a hotel and casino on tribal land, social organizations that oppose gambling move to fight the project. When the tobacco industry develops a vapor electronic cigarette, social orga- nizations that advocate for health take public stands in opposition to the product and propose regulation. In both examples, there are also advocates for gaming and for vapor products that also organize. Almost all corporate activity has at least some social implication, though not all corporate activity creates organized social opposition.

Political Environment The political environment remains a critical factor for firms to consider, and political consider - ations represent another type of stakeholder. Political environmental considerations include actions that can be taken by all levels of government to regulate both the import and output of a particular business. Corporations must often respond to political issues and trends at the local, state, provincial, national, and international level. There are many examples of unsus- pecting corporations being thrust into the international limelight when a particular trend or issue emerges. For example, when former US secretary of state Hillary Clinton revealed in late 2015 that a small company in Colorado managed her e-mail service when she served as sec- retary of state, the small 24-person firm suddenly had to respond to multiple media inquiries about its relationship with the Clinton family.

Legal Environment The legal environment describes the regulations and laws that a corporation operates within.

Legal situations vary immensely from country to country, providing an extremely complex situation for companies that sell highly regulated products such as pharmaceuticals in mul - tiple countries. A drug that is not legally registered or regulated in one country can require years of formalized testing and approvals in another. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.2 Social Network Theory Geophysical Environment Finally, the geophysical environment includes a relationship with the physical environment in which the corporation resides. This involves the corporation’s physical location and may deal with issues of waste, transportation, pollution, the extraction of minerals, water, land, and air. Environmental regulations initiated by governments through the legal system exhibit the interrelationship between these different kinds of issues. For example, the Rhine River flows through the heart of Europe and for years was a dumping place for toxic waste that impacted every country downstream. An eventual multination agreement to clean up polluting prac- tices also impacted all nations along the Rhine.

Section 2.2 introduces social network theory as another way to consider and identify key stakeholders. The method works well when distinct categories or types are hard to identify. It also helps clarify stakeholder identities and power. 2.2 Social Network Theory Each of Albrecht’s strategic radar screens to categorize stakeholders represents a point of view, actual people, or proxies who advocate for a particular perspective and behaviors from the corporation. Each is also part of the web that we call a social network. For example, when considering the geophysical or legal environment, neither the law nor the environment can speak. People represent those categories and speak about those issues. It is important to understand that an organization’s social network includes these direct and indirect voices.

The social network represents a social structure consisting of interpersonal connections between individuals. These connections involve people within an organization who usually communicate with other individuals, thus creating and maintaining relationships with the people who both give and take valuable information.

Characteristics of Social Networks Social networks have certain characteristics. First, they are emergent. This means that social networks are organic and change in response to the need for information or resources. Rela - tionships also change over time and are thus dynamic and emergent. Social networks have patterns that are emergent. For example, suppose a celebrity is seen on a YouTube video wearing a certain pair of shoes. The video is shared virally on the web, creating an emergent demand for the shoes that was unforeseen. The purchasing pattern of those who want to buy this model of shoe is observable but not always predictable. Over time, certain parts of social networks are predictable because patterns repeat so consistently. Finally, social networks are nonlinear. People don’t always exchange information equally. If you mapped information exchanges, you would see they are more like three-dimensional nets or webs that emerge through the relationships that differ in the type and amount of exchange of goods, services, information, and goodwill.

Your friend group represents a social network. Your family represents a social network. An institution has a social network, if it consists of more than one person. The corporation is pri- marily a social network. All of the eight categories of people and issues described by Albrecht \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.2 Social Network Theory interrelate through different social networks. Once you understand that everyone has a social network around them, you can learn to map that network, analyze it, attempt to enter into it, or offer to exchange information with members.

An example of a social network that became a business is Butcher’s Bunches, a small company in the western United States started by the mother of a young boy who could not eat sugar.

When she made sugar-free homemade jams for her son and posted the idea on Facebook, her friends and family began asking for samples. Before long, she was making a batch every day and selling enough to buy a commercial kitchen. Her Facebook following grew until she had regular orders, some from retail institutions. Today she has 10 employees but does almost no marketing, because her social network, which is the modern-day version of word of mouth, brings more business than she can handle (Butcher’s Bunches, 2013).

Social networks have become particularly visible over the past 20 years because of the emer - gence of media-based programs that facilitate social interaction and social network mapping.

Facebook, Instagram, LinkedIn, and other such software facilitate the visualization of a social network.

Benefits of a Social Network In order to understand social networks, attempt to build a map of your own. Several online tools can help you do this, but one of the better (and free) software products is called E-Net.

A simpler but effective way to visually see and effectively map your social networks involves taking a piece of paper and writing your name in the middle of it. Because people in your social network exchange information and/or resources with you, the next step is to identify and list people who have recently given you an important piece of information or resource.

Write those names down and for each one, draw a line between your name and the names of the other people. It is rare to have all your contacts equally important and close to you. You can group together the people who give you the most information and resources. Next, to the extent that you can, begin connecting people in your network who know each other by draw - ing lines between them. Connect those people until the web is a fairly accurate representation of how you get your information and resources.

Whether you draw your social network or create it on a website, you should end up with something that reveals its size and extent. As you think through this, you may see that social networks provide social support. This means that the network empathizes with you, advises you, and may physically support you in times of need. The network, or certain people within it, represents a place where you can complain, gain sympathy, and receive emotional aid.

Social support also provides information. All of us need important information about how to get things done. Imagine your first day at work, for example. How did you get information about where to get supplies, park your car, or eat lunch? Usually, using your social network or adding new people to it helps you thrive in a new environment. Additionally, social net- works provide sense-making information, which helps you interpret the world. The people and organizations within the network help you see what is important and where to go for assistance. Finally, a social network provides access to resources. It can help you get in touch with people who have something that you need, whether it be a loan, a tool for a task, or help finding a job.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.2 Social Network Theory Quality of Social Networks People often assume the strongest social networks consist of people who are most like them.

But that is not always the case. People who are the same age, sex, or race or who have the same political views are not always as interesting to us as people who are different. People who are too similar to us cannot always provide new information that can lead to a break - through, an innovation, or access to a new set of resources. In social network analysis, this phenomenon maps to the idea of strong versus weak ties (Granovetter, 1983).

Strong ties refer to our connections with the people who are closest to us, who give us the most information, and to whom we talk most frequently. Weak ties refer to people and con- nections who know little about us but whom we can access because of someone else in our network (the phrase “friend of a friend” typically refers to a weak tie). Interestingly, research shows that weak ties are particularly important to moving a person or agenda forward. For example, research by Granovetter (1983) indicates that weak ties provide novel information, such as job opportunities. Strong ties most often tell you something you already know. Many people make the mistake of building only strong ties, depriving themselves of important information and opportunities.

These concepts of social networks, network mapping, and types of ties all directly relate to sustainability and CSR because they enable you to know yourself, your company, and your competitors from a social network perspective. Once you map your position and that of others, you can then craft plans or make strategic choices to include the right stakeholders who will help you achieve your goals in your social network. More importantly, you can take an issue or idea and attempt to map out the network of possible supporters, detractors, and bystanders.

Once you create such maps, you may also become strategic about when and where you pro- vide information, since you know with confidence how information travels through various networks. You can take this concept from the individual level to the organizational level and map connections between stakeholder groups as well. In order to do so, you need to be able to move past identifying networks and understand how much power individuals, organizations, and networks actually have. Next, we discuss how to conceptualize and measure different kinds of individual and organizational power.

Individual Power in Organizations A common model of individual power comes from French and Raven (1959), who described five types of organizational power—legitimate, reward, expert, referent, and coercive. These types of power commonly exist in all organizations and provide another lens by which to ana - lyze a social network. After you collect the names of entities in an issue network, for example, you can then note what kind and how much power each entity may have vis-à-vis the issue in question. Social network mapping becomes much more than a list of names and connections once you can attach information about power that essentially acts as a modifier or multiplier for certain names and entities. Some people in your network will have one kind of power and not another. Others will have an abundance of several kinds of power. The main job of any net- work analyst is to identify and categorize the people and power data in order to make better strategic plans. Such mapping can help when leaders wish to suggest a strategic change, but it can also be useful when introducing new socially responsible or sustainable ideas. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue Legitimate Power The first source is legitimate power. This power comes from the belief that a person within an organization has the formal right to make decisions, command others, and gain compliance from them. This formal right can come from a job title or organizational authority. Presidents and CEOs often have legitimate power because of their title and the formal decision-making role their title signifies.

Reward Power The second kind of power is reward power. This type of power assumes the leader has the ability to reward another person’s performance. When a manager has this power, he or she can gain long-term compliance by giving out short-term rewards that might include praise, money, status, promotions, or other benefits.

Expert Power The third type of power is expert power. This power derives from a person’s superior judg- ment, skill, or knowledge. It tends to be earned over time and accrue due to accomplishments.

For example, in a technology-based work environment, the experts who purchase, install, and maintain computer systems have exceptional power to control and influence work flow.

Referent Power The fourth kind of power is referent power. It comes from the social connections a person may have that can protect them from harm or provide them with influence. If you know some - one who is important, you have referent power. When people “name-drop,” they are referring to a powerful person and attempting to share in that person’s referent power. You might not know the president of the university, but suppose you know a professor and that professor knows the president. The professor’s access to a person with legitimate power gives him or her referent power.

Coercive Power The fifth and final kind of power is coercive power, which stems from the belief that a leader or person could punish you if you don’t comply with what he or she requests. The ability to punish also creates resentment, so coercive power—which involves threats—can rarely be used repeatedly. For example, your manager likely has the power to file disciplinary action if you are late to work.

2.3 Stakeholder Analysis and Dialogue All models of power assume that people and entities have connections with others in a social network. Power emerges in the social network circuits without revealing its source. In order to move ideas through the network, analysts need to know which stakeholders in the system \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue to reach, communicate with, persuade, and gain information from. This leads to the issue of more specific stakeholder analysis.

Inexperienced managers commonly make the mistake of thinking they can easily identify all of the stakeholders around a particular issue. Just as with any dynamic system, understand - ing those who are influenced by the system is highly problematic. It requires a systematic thought process and includes an element of randomness. The process of identifying the con- nections, networks, and power of the connections between a firm and its social network is called stakeholder analysis.

Stakeholder analysis identifies those vested in a business issue. It helps people understand who is in the network of influence or power, as well as who is in the network of interest. Any network of influence is usually smaller than the network of interest. There are generally more people interested in an issue than people who can influence an issue. Knowing who is in the network of interest is extremely important because it allows us to gauge the potential risks and benefits of a particular action. When we add stakeholder influence to a map of our social network, we can identify people who should be informed and involved in different phases of a project.

Steps in Stakeholder Analysis Conducting a stakeholder analysis involves the following steps:

1. Identify: This st ep starts with making a list of who the stakeholders are. What are their interests and commitments? What risks do each of them pose?

Prioritize: This st ep attempts to label and quantify power, as well as note that power differs by issue. Who is most affected? Who has power and influence? Who feels urgency?

Map: This st ep involves considering the known relationships between and among actors by exploring the relationships between stakeholders. Some elements of rela- tionships are random or private, but it is good practice to attempt to map all known relationships.

Eng age: Brainstorm how stakeholders can be engaged. What media should we use?

This requires some research about different types of stakeholders and their prefer- ences and biases.

Monit or and review: Identify how the stakeholder relationships are changing. How can we continue to communicate? What new issues are surfacing? This step requires monitoring and remapping as issues move from launch phase to execution or closure.

Each of these steps will be discussed in more detail in the following sections. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue Identify and Map Stakeholders The best stakeholder analysis processes are highly visual. Analysis begins by developing a list of members in the community of stakeholders. Once the list is complete, assign characteris - tics to each one of the stakeholders. For example, it is common to assign data about how much money, power, or influence any one person or group exhibits in relation to a particular issue.

That type of weighting illuminates the high-priority stakeholders—they may not be the peo- ple or groups you expect. The list of potential stakeholders, even on a small issue, becomes very long. But analysts have to make priority-based decisions regarding who to engage in conversation.

To assist with stakeholder analysis, there are a number of online mapping tools that allow users to sort stakeholders into categories. Once the stakeholders have been listed, building a map of them is important for visualizing the network of influence and power that will facilitate moving forward with a particular issue. There are numerous ways to visualize a web of stakeholders for an issue. Visualization allows multiple people to come to a common understanding of different stakeholders’ relationships. Bourne (2015) advocates a type of visualization called Stakeholder Circle, in which some stakeholders remain very close to the center or central part of the issue. Others belong further away. However, some who are far away also have the power to end the project. Some stakeholders who are very close to the center have the power to influence the project but do not control sufficient resources to terminate it. Good managers understand these types of power issues and consider them when they make decisions regarding how to lead and manage or otherwise engage relevant people.

Prioritize Stakeholders Once the list of stakeholders is made, it is important to rank them in priority order. Consider the following:Impact: Who will be most impacted by the decision?

Power: Who has the power to influence the decision?

Need: Who needs or wants to be involved in the discussion?

Support: Who can offer the support required to be successful?

Figure 2.2 reflects a stakeholder categorization model proposed by Mitchell, Agle, and Wood (1997), who classify stakeholders based on their power to influence the decision or issue and on the interest and urgency of the stakeholder’s claim on the issue or decision. This type of analysis allows a manager who is operating with limited resources to assess which types of stakeholders to track and which types to potentially ignore or pay less attention to. Also, since this type of analysis includes advice on how to engage or interact with different stakeholders, this model helps move from the identification and mapping steps toward the prioritizing and engaging steps.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue Figure 2.2: Stakeholder classification model f02_02 Low Interest Power High High Low Keep Satisfed Engage Closely and Infuence Actively Monitor (minimum effort) Keep Informed Source: Figure by Lynda Bourne / CC BY Leaders often manage issues under significant resource constraints, as no firm has unlimited financial and human resources. In addition, most businesses and leaders face more issues than a single person—or even a single team—can manage. Therefore, leaders must choose which issues to address. To help them prioritize, urgency or issue importance comes into play.

General Dwight D. Eisenhower, the head of Allied forces in World War II, used a particular model known as the urgent versus important decision model to sort issues. He continued to use this tool as a decision-making and time-management model when he became president of the United States (see Figure 2.3).

The model suggests sorting issues around importance and urgency. Important things that are not urgent can be done later, or be scheduled and dealt with at the appropriate time. Unim- portant things that are not urgent can be delegated to someone else or even ignored. Impor- tant things that are urgent must take the first priority. The skill lies in deciding what and who is important or urgent—such decisions may require collaboration within an organization and good communication. Communicating within social networks dominates the final portion of this chapter.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue Figure 2.3: Urgent versus Important Decision Model f02_03 Low Urgency Importance High High Low Schedulea time to address task Task is top priority Do task later Delegate task Source: Adapted from The Decision Book: 50 Models for Strategic Thinking by Mikael Krogerus and Roman Tschäppeler, 2012.

Stakeholder Communication and Engagement There are four common approaches for engaging with stakeholders. The first is an inactive approach, which means taking no action. In studying corporate citizenship, Professor San- dra Waddock (2006) researched various ways corporations engage stakeholders. Surpris - ingly, data indicates that most firms do not deal with stakeholders in any systematic fashion.

Research suggests that most companies wrongly believe that inaction will help the issue go away. Or managers believe that giving an issue attention by dealing with it openly serves to worsen the problem (Waddock, 2006). In other words, while an issue might be impor - tant and urgent for one person or group, the same issue may be unimportant and not urgent to another. Usually these differences of perception lead to internal difficulties and external implications that only exacerbate stakeholder problems (Waddock, 2006).

A second common approach to corporate issues involves becoming reactive, or taking action after an issue arises. News outlets often report stories of companies that react to an orga- nizational issue only after the fact by defending themselves in court against liability or by campaigning for public trust. Corporate actors caught in the reactive paradigm tend to listen to stakeholders only after being criticized in the media or some other form of public crisis triggers a belated reaction.

The third type of approach is to be proactive. Proactive companies represent the opposite of both prior reactions; such firms try to anticipate stakeholder concerns and needs. These kinds of firms use environmental scanning practices, databases, and skilled public outreach to iden- tify stakeholders’ concerns and engage them around a particular issue. Such firms also engage in the kind of stakeholder mapping discussed earlier, which helps managers anticipate how changes in current events, power dynamics, funding, and market forces might impact the firm.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue Monitor and Review Stakeholders According to Waddock (2006), the best strategy for engagement is the interactive approach.

This means that companies actively engage with stakeholders in an ongoing relationship.

Ways to achieve this kind of relationship include hosting stakeholders in corporate meetings, appointing them to governing boards, creating industry associations together, and otherwise nurturing an ongoing relationship (Waddock, 2006). Good communication within a firm is not enough to make an organization more responsible and sustainable; enacting good com- munication practices outside of the firm is equally important. In the next section, we describe how to engage stakeholders using dialogue.

Promoting Dialogue Deciding and enforcing the appropriate type and scope of communication within a corpora- tion remains an age-old problem. Almost every culture, society, and corporation has its own norms for dealing with complex problems involving stakeholders. Different norms and cus- toms related to dialogue (verbal and nonverbal) reveal how each community or subculture develops an agreed-upon, culturally endorsed, and near communal way of facing problems, knowing evidence, and determining the best course of action.

The power of dialogue involves more than sharing information already known to individu- als; it is also about combining that information and using it to view problems and solutions in a different way. It means using the information—and even the act of convening people—to develop new and creative approaches. Ideally, dialogue handled and facilitated well leads to new, more creative, and better approaches than what any one person could develop alone (Hammond & Sanders, 2003). Dialogue is thus one major tool for solving complex problems, especially problems bigger than one individual.

The following case study illustrates the power of dialogue in stakeholder relationships and shows how keeping stakeholders informed—even when there is bad news—can have long- term positive effects on a company. CSR and Sustainability in Action: The Environmental Problem of Nike Air When Tom Hartge was product manager in the running shoe division of Nike Incorporated, he focused the bulk of his early career on perfecting the Nike Air product— the lightweight plastic air pocket embedded in the heel of a running shoe. He learned that a German environmental group was singling out all companies that used an environmentally harmful chemical called sulfur hexafluoride, or SF6. This was a problem for Hartge, because the air pocket in the Nike running shoes contained air and SF6. The German group targeted Nike for using SF6 and accused it of contributing to pollution.

Trying a new stakeholder approach, Nike chose to work side by side with all stakeholders to find a solution. (continued) \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue CSR and Sustainability in Action: The Environmental Problem of Nike Air (continued) It took Nike years and millions of dollars to overcome the SF6 problem. The delay came from the fact that SF6 kept shoes high performing and lightweight, so the design team did not want to compromise shoe performance (or economic benefits from shoes sales) by changing components. However, Nike showed it was open to dialogue and learning from a variety of stakeholders, and the company sought out activist groups for advice.

During the research and development period, the team of stakeholders continued to work together despite many potentially derailing disagreements. Nike was able to maintain good relations with the stakeholder groups, in part because it kept dialogue open about efforts, procedures, and reasons for the delays. The stakeholders could see the effort, if not the results. Because of the trust established during the process, the stakeholders worked together and did not create bad press for Nike when deadlines passed; relations remained strong during the multiyear process.

In the end, Nike was able to develop a new technology that uses nitrogen instead of SF6.

The solution involved a new technique called thermoforming. Thermoforming produced a tighter seal than the previous technique, so Nike could make a pocket that could hold up across a shoe’s entire surface (and be good for the environment). The result was a new product, the Air Max 360, a light shoe with higher performance. The new technology led to increased sales and manufacturing savings.

This case study illustrates the power of stakeholders to drive a sustainability and CSR agenda that can be good for the environment, customers, and companies. In addition to supporting the value of stakeholder dialogue, it illustrates how sustainability and CSR pressures can drive performance increases and financial benefits.

Source: From “Nike Goes for the Green,” by S. Holmes, 2006 (http://www.bloomberg.com/bw/stories/2006-09-24/ nike-goes-for-the-green ). Dialogue Process Dialogue forces managers to choose to whom they will listen and to whom they will not. When- ever a dialogue occurs, some voices, parts of the social network, or members of stakeholder group are invited into the room, while others are excluded (either intentionally or uninten- tionally). Thus, in setting up a formal dialogue, the leader or manager must make choices.

Earlier we described stakeholder relationships and argued that the best corporations have an interactive relationship with stakeholders. But all relationships require resources, time, energy, and commitment to resolving issues. Deciding which issues to face and which to put aside is a critical decision for all managers.

Stakeholder analysis is an external process of identifying who should be involved in the dia- logue process. When managers and leaders choose which stakeholders to include in the dia- logue, they make a series of difficult decisions. They have to select which issues to address.

They must decide who will be involved in the dialogue related to that issue. They must decide who is to be included in the discussion, what information will be brought to the table, and who will be excluded. During the dialogue process, they must decide whose voice (of those present) will be given weight and whose voice might be ignored or not heard. Once managers \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue reach the implementation phase, they have to decide who will be responsible for executing collective decision. This means assigning action steps to different groups. Finally, leaders and managers have to decide who will be given resources to implement solutions, and how much to ask for or allow. This is particularly critical, as the allocation of resources often determines which parts of a solution succeed and which will not.

The following list summarizes the types of questions leaders typically ask when they attempt to bring stakeholders together. As you consider using dialogue to work toward a more sustain- able or socially responsible future, you can ask these questions (or suggest your colleagues ask them):

• Issue identification: What issues and concerns do we address?

• Inclusion: Who is included in the dialogue about the organization’s direction? Who is excluded?

• Weight: Whose voice is given weight in the dialogue, and whose voice is not heard?

• Implementation: Who is responsible for executing the final decisions? Who is excluded?

• Resources: Who is given access to resources to implement solutions or take action?

Who is not?

• Benefit: Who benefits, and who does not? Why? Is this what we want, or is this hap- pening as a side effect of another choice?

Dialogue Versus Dialectic Dialogue is such an important tool that it is worth better understanding when and why it works, as well as when and why it may not. True dialogic communication does not assume a right or wrong answer (although it can be difficult to remember this during conversations in which you have strong opinions). Rather, it refers to a process where parties attempt to iden - tify the best answer for the time and context with the information available.

What is the difference between having dialogue and being dialectic? Dialectic communication is used for persuasion. It is used by professors in lectures, politicians in debates, market- ers in their appeal to purchase, and lawyers in courts or public meetings. It is mandated in some civic meetings where participants use formal and mandated rules for speaking, voting, and recording minutes. Dialectic communication processes assume that two people arguing opposing points will create truth somewhere in the middle. A prosecutor and a defense or an advocate and a detractor are dialectic roles that pit conservative against liberal, left against right, or one party against another. In dialectic communication, there are winners and losers.

But in dialogic communication, participants are creative. They find common ground and then work to discover a solution that is mutually beneficial.

Dialogue that is undertaken in a formal and nondialectic way is often called a peace-making, innovation, strategic-planning, or community-engagement process. All of these labels repre- sent forms of dialogue that engage stakeholders in communal knowledge and action.

Research suggests that successful dialogue must have the following preconditions. First, the group must be diverse along multiple dimensions so that information reflects the complex - ity of the problem and different views are considered. Diversity drives dialogue because it \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue requires groups to find common ground before demanding resources or imposing solutions.

Diversity must be cultivated and can include cultural, organizational, social, and educational dimensions. Ideally, the group must include people who represent every subculture of key stakeholders, as a microcosm of the organization. The group must also include voices from each of the organization’s strategic perspectives and levels, so all parts of the organization are represented. Administration, accounting, human resources, line workers, sales, and so on must all come to the table. In addition, to be successful, the dialogue must include individuals who are willing to be reflective and let go of strong cultural identities in order to form group cohesion. The group must also have a significant content issue on which to work, one that is compelling and engaging enough to be worth the time and effort it takes to gather and work.

Finally, all parties in the dialogue need sufficient time to form a new group identity, so that the solution can stem from the new relationships rather than from previous and less diverse thinking (Hammond, Cissna, & Anderson, 2003).

Many people seek to avoid this kind of complex and intimate problem solving, choosing a more hierarchical and dialectic method instead. To promote dialogue, avoid the following behaviors:

• Equivocal language: Using jargon and language others do not understand • Information control/withholding: Keeping secrets • Excessive self-disclosure: Flooding the room with emotional needs and unnecessary information • Inadequate self-disclosure: Shocking people with details or remaining cryptic • Process imposition: Requiring others to unnecessarily follow your communication practices • Process equivocation: Failing to clarify the dialogue process • Recontextualizing: Changing subjects so it is impossible to focus on the key issue The National Park Service uses a particular form of dialogue to plan all park updates and changes, and it is worth studying. CSR and Sustainability in Action: Dialogue at the National Park Service In 1994 the National Park Service (NPS) conducted an intentional dialogue for parties to focus on reducing the amount of time it takes to plan national parks. The first step involved creating a data file of the stakeholders, who were identified using a stakeholder analysis tool. The dialogue included previous park organizers and park superintendents.

Those not directly affected by the park-planning process were also included so the NPS could consider a diversity of voices and viewpoints. These additional and more indirect stakeholders included public officials and citizens from nearby communities. It also included several people who are passionate visitors to national parks. (continued) \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.3 Stakeholder Analysis and Dialogue CSR and Sustainability in Action: Dialogue at the National Park Service (continued) Once relevant stakeholders were identified, the group came together and built a common account of history. The group examined how parks had been planned in the past, what worked, and what did not. Each group member had a voice, and the inclusive process ensured that all parties contributed. Secondly, group members created a list of issues within the NPS, the U.S. Department of Agriculture, and the federal government. In this part of the dialogue, they expanded the problem and perspective, and they examined the regulatory environment facing the national parks. The team also considered the relationship between the parks and the federal government.

In the next section of the dialogue, group members looked at which social groups used the parks and which provided political and economic support. Finally, they considered what would be an ideal future park-planning process. The group set standards for what it wanted to accomplish through park planning and listed steps toward the ideal future.

Some steps had not existed in the park-planning process before the group formed. The NPS example shows how parties in conversation can discover things as a collective that no individual could discover on his or her own. Indeed, the ultimate objective of dialogue is transcendence or innovation. Transcendence refers to the ability to find new ways of doing things. You may come to a conversation with your way in mind, and another person may come to the same conversation with his or her way; but dialogue, when managed properly, provides an opportunity for parties to find a third way. Apply Your Knowledge: Stakeholder Analysis and Dialogue Planning Issue identification: Identify a key issue facing an organization. It might be an issue of environmental or social impact. Describe the issue from a social and organizational perspective.

Stakeholder analysis: List the market and nonmarket stakeholders in the organization.

Create a stakeholder analysis using the stakeholder method proposed in this chapter.

Design a dialogue: Create an invitation list for a dialogue. Who should be involved in an ongoing discussion about the issue? Who should be excluded, and why?

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 2.4 Stakeholder Engagement and Ethics 2.4 Stakeholder Engagement and Ethics Previous discussions reveal that when leaders and stakeholders gather to solve problems using dialogue, the first key issue revolves around who should be part of the discussion. How - ever, once the group is assembled and key questions and assumptions are made using the dialogue process, there remains one area to address: Leaders need to be aware of their ethi- cal orientation, problem-solving, and dialogic preferences. They also need to be transparent with others about these facts. With that in mind, this section will discuss the role of ethics in promoting CSR.

Business Ethics and CSR Most professional standards or codes of conduct in business stem from what are called nor- mative ethics. These describe a standard of behavior that is immovable and promotes a cer - tain standard, without deviation. For example, speed limit signs provide a specific number that defines the boundary between legal speeds and illegal speeds. Once passed into law, a speed limit represents a normative statement—an immovable standard about safe driving speeds. Similarly, normative ethics dominate business accounting practices, risk manage- ment, operations, human resources, and many other aspects of corporate organizational life.

Government regulations often set normative standards for environmental impacts or tax regulations. Such regulations essentially attempt to define and prescribe the boundaries of “normal” behavior.

For many years, business students studied ethics from a normative perspective. They memo- rized codes of conduct and regulations. What was legal was considered ethical. Students were not required to think about going beyond “normal” to proactive ethical positions. With the emergence of corporate social responsibility, however, came the concomitant idea that not all ethical issues can be anticipated. For example, once managers consider more than sharehold- ers who typically want high returns, they begin to consider less predictable voices—such as villagers who resist local development or families who demand improved services. Leaders, managers, and employees should be empowered to take proactive anticipatory positions on ethical matters. This fact often puts corporate citizens in a bind because they have a duty to a corporate community, a social community, and an environmental community. The approach to sustainability and CSR advocated here suggests that leaders must find ways to comply with norms to fulfill their duties and create the greatest good for the greatest number of people.

Essentially, two major ethical traditions dominate the options for any individual: deontologi- cal and utilitarian.

Deontological Ethics Leaders who operate under deontological ethics tend to focus on roles and responsibilities.

A deontological ethic refers to a position that evaluates morality based on the action’s adher- ence to a rule. Such leaders want to follow the “right way” and care deeply about what norms are already in place. They ask who has responsibility to the corporation, broader society, the political system, and the environment. It is also likely that any duty a corporate officer has to these entities will at some point conflict with duties he or she may feel to other entities.

The situation becomes more complicated when the demands of various stakeholders come into play. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. In addition to a focus on duties, the deontological approach prescribes a normative (or single) approach to communicating between stakeholders, one that is dialectic. It is conceivable, and perhaps even common, for a deontological mind-set to result in a strong centralized approach that keeps corporate decisions within a particular group and communicates dialectically to other stakeholders about duties and responsibilities.

A t its extreme, this kind of organization resembles an old-style military hierarchy, wherein information is rationed on a need-to-know basis and resources are guarded.

Deont ology can also be expressed in the opposite manner, wherein a leader shares openly with a variety of stakeholders. He or she will listen to their input and make democratic deci - sions using a dialogic process. In this kind of organization, a deontologically minded leader generally privileges ongoing work processes over outcomes or deliverables and supports stakeholders’ extensive involvement.

While the deontological mind-set offers one option for driving engagement with stakehold - ers, the other option is a utilitarian mind-set.

Utilitarian Ethics When a mind-set of utilitarian ethics dominates, the focus moves from duty and toward cre- ating the best outcome for the most people. A utilitarian ethic essentially evaluates the right- ness or wrongness of an action by considering its consequences. Utilitarian ethics suggest that the ultimate goal should be to enable the greatest good for the greatest number of people.

If the greatest number of people dwells inside the stakeholder network, then satisfying those needs is the most ethical course of action.

The dialogical approach to building a sustainable corporation is most common among those who support utilitarian ethics because in order to do the greatest good for the greatest number of people, one needs to understand the needs of others. Utilitarian leaders tend to argue that “being heard” is critical to good decision making. At the core of the utilitar- ian dialogic approach is inclusion, as more voices have more potential to identify the solu- tion that will serve the most people. As you might imagine, this inclusion requires strong meeting- management skills, as dialogue t ends to become more complex as the number of participants rises.

Put in simple terms, in the deontological tradition of ethical decision making, one would ask, “Where is the highest duty?” In the utilitarian system, one would ask, “Who receives the great- est good?” As you consider how to lead stakeholder discussions, you will need to consider where you stand along the deontological–utilitarian continuum. Or you need to find where your leader stands, and you may want to speak up for a different viewpoint to ensure that diverse opinions emerge. Understanding the mind-set and ethical bias of different stakehold - ers allows people to run better meetings and find more ideal solutions.

A basic discussion of ethical traditions introduces the value of understanding what point of view and mind-set a stakeholder has adopted. Understanding how an ethical position informs action helps leaders conduct a more inclusive and deliberate dialogue. In addition, many peo- ple justify and motivate CSR actions and sustainability choices on ethical grounds; others justify and motivate them using economic arguments. No leader can engage in discussions about CSR options without considering how his or her own ethics and the ethical mind-sets of \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary every stakeholder do or do not overlap. Thus, the discussion of ethical traditions is designed to help you think through your own mind-set and provide questions you can ask others—par- ticularly when discussing CSR and sustainability. Chapter Summary This chapter began by defining corporate stakeholders and looked at the many complicated levels of power and influence various stakeholders have in and around an organization. The chapter described the difference between a shareholder and a stakeholder and examined market and nonmarket stakeholders. It also examined the stakeholder networks as a form of social networks and proposed dialogue as a communication practice for managing many of the complex problems that arise in a corporation. The final section examined normative eth- ics, duty-based or deontological ethics, and utilitarian ethics and argued that future business leaders who want to be socially responsible must anticipate ethical issues if they are to build a sustainable corporation.

Posttest 1. Inno vation and the way information flows in a corporation is known as the environment.

consumer b. competit or c.

technological d.

geophysical 2.

A stak eholder analysis can provide .

a list of good contacts b. an o verview of critical issues c.

a clear view of po wer relationships d.

a starting point f or helpful dialogue 3.

The deont ological approach to ethics suggests there are .

man y right ways b.

one rig ht way c.

a set of pr ofessional standards d.

r easons to make it up as you go 4.

The r elationship between the corporation and the community is called the environment.

consumer b. social c. legal d.

geophysical \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary 5. Dialogue is a f orm of communication best suited to solve which of the following problems?

simple pr oblems with many stakeholders b.

simple pr oblems with few stakeholders c.

comple x problems with many stakeholders d.

comple x problems with no stakeholders 6.

A person w ho understands all of the technical aspects of a product and has unique knowledge is a person with power.

r eferent b.

r eward c.

expert d.

legitimate 7.

A person w ho can punish team members when they do not do their part has what kind of power?

coer cive b.

r eferent c.

reward d.

expert 8.

The ethics of duty is .

utilitarian b. deont ological c.

dialogic d.

Kantian Answers: 1(c); 2(c); 3(b); 4(b); 5(c); 6(c); 7(a); 8(b) Critical-Thinking Questions 1. Mak e a list of all the market and nonmarket stakeholders in a particular business or educational institution. What types of power does each stakeholder have? How can a stakeholder’s power be used to influence the organization’s decisions?

Dr aw a picture of your current social network then discuss how it changes and evolves. What forces cause your network to expand and contract? Who are your strong and weak ties? How can a strong tie become weak and a weak tie become strong?

What kind of po wer do you hold as a student? What kind of power does the instructor hold? What kind of power does a company’s information technology director hold? Or its CEO?

Identify times w hen duty-based ethics (or deontology) conflicts with utilitarian ethics (or the greatest good for the greatest number of people). With which ethical view do you most agree? Why?

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary 5. Discuss w hether dialogue is more difficult than dialectic communication. What are the advantages of dialogue in complex systems? Additional Resources Social network mapping software includes:

Hashkat, aka “#k@”: http://hashkat.org/ AllegroGraph: http://allegrograph.com/allegrograph/?gclid=Cj0KEQjwj7q6BRDcxfG - 4pNTQ2NoBEiQAzUpuWxT9eT7D06Tlmi8_5HaDTWIMke-DDxIWjRRKf6deyrYa Apr-8P8 H AQ Automap: ht tp://w w w.casos.cs.cmu.edu/projects/automap/ EgoNet: ht tps://sourceforge.net/projects/egonet/ NetMiner 4.2.2: ht tp://w w w.netminer.com/main/main-read.do NetworkX: ht tps://net work x.github.io/ Social Network Visualizer: ht tp://socnet v.sourceforge.net/ Learn more about utilitarianism: http://www.utilitarianism.com/utilitarianism.html Learn more about deontological ethics: ht tp://w w w.philosophybasics.com/branch_ deontolog y.html Answers and Rejoinders to Chapter Pretest 1. F alse. There are many kinds of stakeholders. A shareholder is just one kind of stakeholder.

F alse. Social networks are dynamic, ever changing, and self-organizing.

T rue. Dialectic is a two-sided argument, while dialogue is a common exploration.

F alse. This particular phrase represents the guiding philosophy behind utilitarian ethics, not deontological ethics. Rejoinders to Posttest 1. The t echnological environment is defined by information flow and the need for and the role of innovation.

The stak eholder analysis is an essential way to see power relationships.

The deont ological ethic is normative and suggests one right way.

The social en vironment includes the cultural and social trends present in the com- munities in which the corporation does business, and it connects the corporation with the community.

Dialogue is best suit ed to address complex problems that require creativity and have many stakeholders.

7. Coer cive power is the power to punish or threaten.

Deont ology is the ethics of duty. Key Terms coercive power Power that comes from the ability to create fear, punish, or remove resources.

deontological ethics The ethics of duty usually associated with professional norms.

expert power Power that comes with a per- son’s superior judgment, skill, or knowledge.

legitimate power Formal authority granted to people in organizations based on their position or role.

market stakeholders Those who have a direct financial interest in the corporation, such as a shareholder or an employee.

nonmarket stakeholders Those who lack a direct financial interest in the corporation but who might be impacted by corporate actions.

normative ethics A standard of behavior that is immovable and promotes a certain ideal without deviation.

referent power Power that comes from having people with influence in one’s social network. reward power Power that comes from the ability to give resources.

social network The web of social con- nections between individuals and between individuals and the corporation.

shareholders (or stockholders) Those who have paid money to have partial owner- ship of a company.

stakeholder analysis A process that identi- fies the vested interests in a given business issue.

stakeholders People and firms with a vested interest in a corporation.

stakeholder theory The operational concept that there are many types of people who are vested in the corporation, and in many ways.

utilitarian ethics A code that stresses the importance of doing the greatest good for the greatest number of people. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution.