Stakeholders: Who Really Has a Slice of the Pie?

Recently I was asked to record a mini series for Learning Now TV on engaging conversations, due to be broadcast shortly. In the first episode I discussed the importance of stakeholder analysis and mapping. It’s all too commonplace that when we consider stakeholders that we presume their authority and slice of the pie is aligned with the hierarchical structures within an organisation, and that may not always be the case.

Often it is overlooked and considered to be a quick step of briefly discussing a project with a small group of colleagues. This can quickly lead to a project swiftly unravelling and subsequently either being delayed, changed, or shelved.

As with the recording, I’m going to get a little academic with you. Identifying stakeholders goes far beyond just making a list – there are power and influence dynamics at play that need to be identified for you to maximise your discussions and strategies moving forward.

In 1986 Morgan identified the Sources of Stakeholder Power as:

  • Formal authority
  • Control of scarce resources
  • Use of organisational structure, rules and regulations
  • Control of decision processes
  • Control of knowledge and information
  • Control of boundaries
  • Ability of cope with uncertainty
  • Control of technology
  • Interpersonal alliances, networks, and control of ‘informal organisation’
  • Control of counter-organisations
  • Symbolism and the management of meaning
  • Gender and management of gender relations
  • Structural facts that define the stage of action

It is important as we strategically identify where the sources of stakeholder power are, not just in terms of who to engage with and to what extent, but also in identifying where potential bottlenecks are.

But wait, there’s more, this is not where the academia ends…

In 1995, Winstanley et al theorised The Stakeholder Matrix.

The matrix helps to identify which stakeholders have criteria power and operational power. Criteria power is the power to define goals, aims and purpose within an organisation, operational power is the power to determine how the product or service offered by the company is provided by the allocation of resources.

This mapping to this matrix will provide insight into understanding where stakeholders and stakeholder groups might hold and seek to exercise power. Note that these may be quadrants, but they are continuums for operational and criteria power, meaning that stakeholders may be plotted at different locations within the quadrants dependant on their level of power.

When reflecting upon where to plot the stakeholders within the matrix, the definitions of the quadrants must be considered:

  • Arm’s Length Power: Stakeholders that have little power in detailed decisions but significant indirect power
  • Comprehensive Power: Stakeholders with power in planned economies or wholly owned and managed subsidiaries. These have great power in detailed decision-making processes.
  • Operational Power: Stakeholders with power and influence over operational decisions
  • Disempowered: Stakeholders with little opportunity to secure alternative sources of supply or markets for their product or skills. These have no power in the decision-making process.

Once you have understood the power of the stakeholders and their interest and influence, the final stage is to identify their salience. Salience (Mitchell et al. 1997) is defined as prominence, importance and significance. The interests of the most salient of stakeholders should be at the fore of your mind when planning your work. The stakeholder with the most salience is the most significant stakeholder in your work.

The three attributes of salience in this context are:

  • The power the stakeholder has over the actions of your work
  • The legitimacy of their claim over your work and its outcome
  • The urgency that you feel to satisfy stakeholder claims to the outcome of your work

The types of stakeholders according to the power, legitimacy and urgency of their claims are:

  • Latent stakeholders
    • Dormant (Power)
    • Discretionary (Legitimacy)
    • Demanding (Urgency)
  • Expectant Stakeholders
    • Dominant (Power and Legitimacy)
    • Dangerous (Power and Urgency)
    • Dependent (Legitimacy and Urgency)
  • Definitive Stakeholders
    • Dominant (Power, Legitimacy, and Urgency)

Through applying the three models identified in each of the activities ensures a robust approach to the multi-dimensional nature of stakeholders, enabling them all to be mapped appropriately.

This may sound completely academic, tedious, and time consuming, but never underestimate your stakeholders, the power and influence they have, even from the ones that you least expect.

Success comes from planning.

“If you fail to plan, you are planning to fail” – Benjamin Franklin

References:

Morgan, G. (1986), Images of Organisations, Sage

Winstanley, D., Sorabji, D., & Dawson, D. (1995) When the pieces don’t fit: A stakeholder power matrix to analyse public sector restructuring, Public Money & Management, 15:2, 19-26, 

Mitchell, R.K.; Agle, B.R.; Wood, D.J. (1997). “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts”. The Academy of Management Review. 22 (4): 853–86

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