Problem Based Learning (PBL). Trigger 9.
Stakeholder Relationships
Problem: How
corporate image affects stakeholders’ relationships?
Learning objectives:
- What is relationship management? (Definitions of relationship management? The importance of stakeholder relationship management with a company?)
- How to create and maintain trust and loyalty with stakeholders through communication? (Communication plans/ strategies to create trust and loyalty with investors (employees/ customers)? Communication plans/ strategies to maintain trust and loyalty with investors (employees/ customers)?)
- How to rebuild trust and loyalty with stakeholders through communication? Communication plans/ strategies to rebuild trust and loyalty with investors (employees/ customers) from crisis?
Relationship Management-a strategy employed by an organisation in which a continuous level of engagement is maintained between the organisation and its audience. Relationship management can be between a business and its customers (customer relationship management) and between a business and other businesses (business relationship management).(Investopedia)
Stakeholder Relationship Management- the process of forming, monitoring and maintaining constructive relationships with anyone "who has an interest in your project or will be affected by its deliverables or output (Business Dictionary; Projectsmart.co)
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| Communication Plan with Stakeholders |
Stakeholder Salience Model (Cornelissen, 2011):
The central idea is that the more salient or prominent stakeholders have the priority and therefore need to be actively communicated with.
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Three Key attributes:
Power- the power of the stakeholder group upon an
Legitimacy- the legitimacy of the claim laid upon the organisation by the stakeholder group
Urgency- the degree to which stakeholder claims call for immediate action
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Latent Stakeholder groups: (groups possessing only one
attribute):
Dormant-those who have power to impose their will on others but because they do not have a legitimate relationship or urgent claim, their power remains dormant
Discretionary-those who possess legitimate claims but have no power to influence the organisation and no urgent claims. (e.g. recipients of corporate charity)
Demanding-those who have urgent claims, but neither power or legitimacy to enforce them. (e.g. lone demonstrator)
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Expectant stakeholders: (possessing two attributes)
Dominant-have power and legitimate claims->strong influence on organisation (employees, customers, owners, investors)
Dangerous- have power and urgent claims, but lack legitimacy (wildcat strikes, employee sabotage, terrorism etc.)
Dependent-lack power but have urgent, legitimate claims; rely on others for the power (local residents of a community)
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Definitive Stakeholder- those who have legitimacy, power and urgency. They are by definition needed to be communicated with.
(e.g. shareholders, customers, investors etc. depending on the organisation)
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Communication with Stakeholders:
Public Relations provides some of the deliberate cues that enable stakeholders to develop images and perceptions through which they recognise, understand, select and converse with organisations. (Fill,2009).
Building credibility/trust/loyalty(Fill, 2009):
Communication with Stakeholders Model: (Cornelissen, 2011)
Maintaining credibility/trust/loyalty:
Corporate Advertising -a mean of communicating more effectively with stakeholders.; advertising on behalf of organisation; The main purpose of corporate advertising is to be the provision of cues(e.g. presenting personality of organisation) by which stakeholders can identify and understand an organisation. (Fill, 2009)
Corporate advertising can also be used to correct misunderstanding that stakeholders might have of corporate reality. (Reisman, 1989)
Goals of corporate advertising:
Case Example: Starbucks (based on Cornelissen, 2011, case study 3.1)
Stakeholder Collaboration:
Employees: Treating employees as "partners" (Mission Statement)
Customers: Customers Engagement (e.g. Social Media Campaign http://mystarbucksidea.force.com/)
Community: Supporting local community initiatives; collaborations with NGO, promoting production and consumption of the "fair trade" coffee.
Case #1: in 2007 Starbucks was criticised for blocking Ethiopia's desire to trademark some of its famous coffees. By using trademarks(3 trademarks were claimed), Ethiopian government could charge licensing fee from distributors. The EU, Japan and Canada approves the trademark scheme, however Starbucks was pressuring via industry lobbyists the US patent office to turn down the Ethiopian patent claim. 2 of the trademarks were refused. Media campaign against Starbucks was launched accusing Starbucks of acting unethically towards one of the world's poorest countries, however, Starbucks responded by counter-offensive campaign. This situation led to a public relations crisis and Starbucks agreed a wide-ranging accord with Ethiopia to support and promote its coffee.
Case #2: Starbucks Tax Avoidance in UK
Sources:
Marketing Communications. Chris Fill, 2009
Marketing Communications. Chris Fill, 2009
Corporate Communication. A Guide to Theory and Practice. Joep Cornelissen, 2011
http://www.investopedia.com/terms/r/relationship-management.asp#ixzz3YQie4uMA 
