1.4.2 Identifying an organisation’s stakeholders
R. Edward Freeman, in his landmark book Strategic Management: A Stakeholder Approach (1984, p. 25), draws a stakeholder map of the firm (see Figure 2) which ‘takes into account all of those groups and individuals that can affect, or are affected by, the accomplishment of organisational purpose’. Each of the groups identified by Freeman not only has a role to play in the success of the firm but also has a stake in it, hence the term ‘stakeholder’.
Let us now compare Freeman’s map with a list of stakeholders identified by the Cabinet Office (2004) for strategy work at a governmental level:
- users and customers
- the departmental or lead minister (if there is one) and their specialist adviser
- ministers in relevant other government departments and their specialist advisers
- groups of officials and individuals in the relevant other government departments
- devolved administrations
- representative organisations from the relevant sectors
- local authorities and the wider public sector
- private sector organisations and individuals who have a current or potential future vested interest in an area (for example, if they might be involved in future delivery)
- Parliamentary Committees
- . academics, research organisations and think tanks
- . employers and trade unions
- . international organisations such as the European Commission (EC), World Bank, International Monetary Fund (IMF) or United Nations (UN).
Stop and reflect
What similarities and differences can you observe in the two sets of stakeholders? With which set do you identify most, and why?
One of the most common ways of identifying stakeholders is to plot them on a ‘map’, usually in concentric circles, according to the degree to which they are affected by an organisation’s strategy or its operations. The stakeholder map at Figure 3 illustrates how an imaginary probation service might plot its stakeholders.
The stakeholder map above uses three categories – internal, directly affected and indirectly affected – to plot its stakeholders, but an alternative approach might be to divide them into primary or secondary stakeholders. Primary stakeholders are those seen as most vital to an organisation, without whom the organisation cannot survive, such as customers, suppliers, shareholders and employees, whereas secondary stakeholders are those on whom the organisation does not rely directly for its existence, such as media, community and regulatory bodies.
Stop and reflect
Who are your organisation’s primary stakeholders? Can you think of any stakeholders who might be categorised as both primary and secondary?
However, there are dangers in categorising stakeholders thus as they may belong to more than one group, either internal or external, and alignments may shift depending on the issue in hand. Although stakeholder groups tend to be made up of large numbers of individuals, they are not necessarily homogeneous and may in fact consist of groups within groups, with power often unequally shared. (We shall return to the issue of stakeholder power shortly.)
An alternative way of mapping the stakeholders is to use a relationship map or network diagram such as the one below (Figure 4) where each coloured node and its ‘satellites’ represent groups within groups.
The UK’s National Health Service (NHS) Institute for Innovation and Improvement (2008) has devised a useful checklist for ensuring that you include all relevant stakeholders. Although intended primarily for NHS practitioners, the checklist known as ‘9Cs’ (see below), has wider applicability and can easily be repurposed for private sector or other public sector organisations:
- commissioners – those who pay the organisation to do things
- customers – those who acquire and use the organisation’s products
- collaborators – those with whom the organisation works to develop and deliver products
- contributors – those from whom the organisation acquires content for products
- channels – those who provide the organisation with a route to a market or customer
- commentators – those whose opinions of the organisation are heard by customers and others
- consumers – those who are served by the organisation’s customers, e.g., end users
- champions – those who believe in and will actively promote the project
- competitors – those working in the same area who offer similar or alternative services.
Stop and reflect
Thinking of your own organisation, can you identify a stakeholder group for each of the 9Cs?