Stakeholder management

Every organisation is connected to people, groups, companies and institutions that have an interest in its activities and objectives. Some relationships are chosen and welcomed; others arise from impact, dependence, regulation or opposition. Stakeholder management provides tools for identifying these parties, analysing their interests and relationships, and deciding how the organisation should respond. Power is important, but legitimacy, urgency, rights and impact also matter.

When to use it

Stakeholder management helps an organisation understand:

• which stakeholders are most significant to the decision or organisation;
• how those stakeholders relate to one another;
• what each party contributes to and receives from the relationship;
• what influence stakeholders possess or should legitimately possess;
• how the organisation could and should respond to their interests.

Origins

The word stakeholder predates modern strategy, but its managerial use is often traced to a Stanford Research Institute memorandum from the early 1960s describing groups whose support an organisation needed to survive. R. Edward Freeman later placed stakeholder relationships at the centre of strategic management, arguing that strategy must account for parties that can affect or are affected by the organisation, including customers, employees, suppliers, financiers and communities.

What it is

Stakeholder management identifies affected and influential parties, examines their interests, rights, power, legitimacy, urgency and dependencies, and plans proportionate engagement. A map helps allocate attention, but the work is not simply a technique for neutralising powerful opponents. It should reveal impacts, enable legitimate participation, support trade-offs and monitor how relationships change.

How to use it

Begin with a broad stakeholder inventory, then group related parties where doing so does not hide meaningful differences—for example, employees, government bodies or environmental organisations. Prioritise carefully because not every stakeholder requires the same engagement. One established salience classification uses three attributes: