CHAPTER 2

STRATEGIC MANAGEMENT OF
STAKEHOLDER RELATIONSHIP
Appreciation
From our definition of CSR from the previous
chapter, it is an ongoing commitment of
organizations to ensure accountability to the
stakeholders its existence has an impact on.
On the other hand, strategic CSR may be
explained as a process in which businesses
evaluate their various stakeholders’ changing
demands & how these demands are to be met
or satisfied.
The process by which to create
strategic CSR must involve
thought-out planning & execution.
Whatever the company’s plans have
on CSR, it cannot be effective
unless the strategy aligns its
stakeholder concerns with
corporate goals.
Diagnostic questions:
1. Who would you consider society’s
stakeholders?
2. Is it important to manage
relationships with the various
stakeholders of the company? Why?
3. What is the purpose of the strategy?
4. How can one create value for a
company?
Who would you consider as the stakeholders?
A stakeholder is a party that has an interest in a
company and can either affect or be affected by
the business. The primary stakeholders in a
typical corporation are its investors, employees,
customers and suppliers.
However, with the increasing attention on CSR,
the concept has been extended to include
communities, governments and trade
associations. In addition, pls see page 15 in your
book.
Is it important to manage relationships with
the various stakeholders of the company? Why
Yes! Stakeholder management is
important because it is the lifeblood
of effective project relationships. This
means not only knowing your
stakeholders but also understanding
their unique communication needs at
various points in the project.
What is the purpose of the strategy ?
In both the cases, Strategy can step in
and play its role. Strategy is important
because it will give you a guideline of the
future targets of the company using
which, the company can realign its
marketing strategy for the product which
is facing fire. It can also launch new
product variants or new lines and lengths
if the strategy allows.
How can one create value for a
company?
By giving importance on the what the
company has. Example the product
that they are producing. Consider the
quality and the durability of the
product being produced. In terms of
services, provide quality services and
be sure the customers will be satisfied.
What is a strategy?
A strategy is defined as a plan of
action taken to achieve objectives.
Furthermore, it is the intelligent
allocation of resources through a
unique system of activities to
achieve a goal.
The process of strategy involves 3 steps:
Formulation
Implementation, and
Evaluation. (David 2017)
While strategic management is a process
of creating a competitive advantage over
its competitors and sustaining this
advantage in the long term. The process is
illustrated on your book page 14-15.
Establish Goals/Objectives
This is initially performed by creating
and/or clarifying your business
vision/mission and identifying goals
/objectives.
1. Vision
2. Mission
3. Goals
4. Objectives
Scan environment – Perform a thorough
analysis and assessment of the internal
external environment of the company
1. External: Let us consider the
opportunities and threats, given the
dynamics of a particular industry.
2. Internal: We have to consider the
company’ strengths and weaknesses by
assessing its resources.
THE THREE STEPS
1. Formulation – develops top-level strategies
that can be trickled down to the rest of the
organization.
For example, if your business has
reached market saturation and you need to
diversify to survive, your corporate level
strategy would be to spread to new markets.
That becomes the guiding force for
everything your business does from now on.
More examples of top level strategies
are:
R&D: Redesign product
Marketing: Implement new advertising plan
Production: Make changes to existing
infrastructure
Rebrand for a new demographic
Increase marketing budget
Tap new and emerging markets
2. Implementation
 Executes developed plans by
providing detailed objectives and
action plans.
3. Evaluation – measures and assesses
results, & recommends changes for
improvement if necessary.
Who are the stakeholders?
The key stakeholders are:
1. Shareholders (investors, owners,
partners, or anyone who has a financial
stake in the company)
2. Customers
3. Employees
4. Suppliers and
5. Society(government, civil society, &
institutions)
Stakeholder Theory
One of the key arguments used in
understanding CSR is the stakeholder
theory.
This theory states that companies are
responsible for generating reasonable
profits for their shareholders but should
also be responsible for the stakeholder’s
well-being (Freeman 1984)
Strategic CSR
In the early years of CSR, programs were
designed and developed with minimal
stakeholder engagement. However, it
has become evident that creating shared
value among a company’s stakeholders is
critical and essential to the CSR agenda,
and beneficial for program objectives,
impact, market value and bottom line.
Dialogue, feedback, transparent reporting,
collaborative partnerships, for example, are
powerful tools to build trust and strong
relationships among the stakeholders.
Strategic CSR starts within an organization
when it embeds & aligns its CSR initiatives as
part of the company’s overall strategy.
This simply means that a company’s
objectives, strategies and core values take into
consideration the impact its operations have
on the stakeholders.
Please refer to the drawing on page 16.
Similar to the process of strategic
planning, an effective CSR strategy
would entail performing the following
steps.
1. Identify the goals/objectives of the
company.
2. Scan the environment .
3. Formulate a CSR strategy
4. Implement the CSR program
5. Evaluate the program.
Success Indicators:
For CSR to be strategic, companies
must manage stakeholder
relationships effectively, for social
responsibility is primarily about
stakeholders’ well-being.
The following are the success
indicators:
1. Alignment of CSR with Business
Strategy
2.Leadership
3.Employee Engagement
4. Collaboration
5. Communication
6. Value Creation
THAT ENDS CHAPTER 2
Any Question?
If there is none may I check your
attendance.
Prepare for a quiz on Thursday.
We will not meet on Friday because I
will have my second doze vaccine.
God bless us all......