How to Stakeholder Map.
When discussing CSR and what it entails, the term Stakeholdership tends to come up a lot in regards to who should companies include and take into account when devising CSR activities. Under the stakeholder framework anyone who might affect the business objective; and anyone who might be affected by its realization are considered a stakeholder. Stakeholders can include managers, stockholders, creditors, employees, customers, suppliers, general public and the wider community. They all have a stake in how the business is run, its operations and the impact it makes through its activities. Thus, how stakeholders are managed is important for any business.
There are numerous interpretations of Stakeholder theory, but the underlying principle is that firms have to act in a responsible (ethical) way towards actors who can directly and indirectly influence its performance; as well contribute to a good society. The commonly used definition is by Freeman (1990) that sees stakeholders as ‘a person or group who can affect or are affected by the achievement [or failure] or an organisation’s purpose’.
Acknowledging the role of stakeholders is paramount as no business can operate without trying to understand the world they operate in and how their business makes an impact. This is more so for businesses who want to be perceived as ethically driven and CSR-focused. Any current definition of CSR includes and indicates the responsibility a company has towards its stakeholders through its ‘socially responsive activities’. Successful stakeholder management is good for business for two main reasons. One is to ensure the reputational aspect of the business and how it treats its key stakeholders. This creates a legitimacy aspect where the business is considered ethical and good to do business with.
The second aspect is from an accountability point of view, where building relationships with key stakeholders, the business is open to being held accountable for the impact it makes. This also broadens and helps management's vision of its role and responsibilities beyond profit maximization to include interests of non-stockholding groups’ (Smith et al, 2005).
In order to effectively engage with key stakeholders, the company must understand their needs, wants, interests and motivations. If that is done right, the influence of stakeholders can be managed effectively when setting up a CSR program. A useful way to identify stakeholders important to a company, is to draw a stakeholder map to visualise the relationship between both parties.This helps to identify key stakeholders and their circle of influence in relation to the business. The map also helps to find mutual ground, where the foundations for lasting positive relationships are made, granting opportunities to build on existing community connections and create new ones.
To make a stakeholder engagement map:
1) Work out who your key stakeholders are.
2) Conduct research to determine your core group of stakeholders based on your objectives.
2) Rank them on importance in regards to their influence on your organisation.