04. stakeholder analysis

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ia Stakeholder AnalysisStakeholder Analysis

Trevor Sofield Professor of Tourism University of Tasmania Australia. Consultant : ITC

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Definition of StakeholdersDefinition of Stakeholders

“Any group or individual who can affect or is affected by the achievement of an organisation’s objectives.”

(Freeman, R.E. (1984) Strategic Management: A Stakeholder Approach, Boston: Pitman.)

Developers, businesses, neighbours, communities, government ministries, non-governmental agencies,

etc and etc.

.. ... .PHNOM PENH PLAN

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Stakeholder AnalysisStakeholder Analysis

Narrow definitions of who is a stakeholder look at direct relevance to the activity’s core economic interest, whereas -

broad definitions are based on the premise that companies and businesses can be affected by, or can affect almost anyone.

• Mitchell, R.K., Agle, B.R. and Wood, D.J. (1997) “Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts,” Academy of Management Review 22 (4), 853-886.

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Is now a widely accepted part of the code of corporate ethics

• The concept hinges upon the notion of fairness

“Stakeholder management requires, as its key attribute, simultaneous attention to the legitimate interests of all appropriate stakeholders, Minorities included, both in the establishment of organizational structures and general policy and case-by-case decision making.”

(Donaldson, T. and Preston, L.E. (1995) “The Stakeholder Theory of the Corporation: Concepts, Evidence and Implications,” Academy of Management Review 20 (1), 65-91).


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Stakeholder Analysis

outline their mandate

A diagnostic tool to -

Stakeholder analysis is a continuous process

identify key stakeholders clarify their interests comprehend their perception of the problem specify their resources (supportive and destructive)

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Levels of importance of stakeholders

• Primary stakeholder: one who without continuing participation the business cannot survive or the development/intervention succeed.

• Secondary stakeholders: ones who influence, affect or are influenced by or affected by the business/development initiative but who are not engaged in transactions with the business/development initiative and are not essential for its survival

• i.e. Those that affect vs those that are affected by.

• Active versus passive stakeholders (eg farmers versus absentee landlord)

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Helpful stakeholders to enlist: –

• ADVOCATES – Idea creators, designers

• CHAMPIONS - to lead the change

• SUPPORTERS - “critical mass”

• DECISION MAKERS (to approve the activation of critical change enablers – policies, funds, people)

• OPINION LEADERS - decision-swayers, special interest groups that sustain people’s awareness of the need for change (lobby groups, NGOs, media)

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Functions of Stakeholder TheoryFunctions of Stakeholder Theory

(Donaldson and Preston (1994); Jones (1995)

Stakeholder theory can also deal with conflicts and trade-offs. These tend to increase when development and population growth occurs, which makes resources more scarce and therefore more highly valued.

• This links into sustainable tourism which recognises that multiple interests must be addressed and that balances or tradeoffs must occur.


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Problems with the Concept of Stakeholder TheoryProblems with the Concept of Stakeholder Theory

• Where does tourism begin and end?

• Involving every stakeholder in discussions and negotiations can be an expensive task.

• The broad definition:- “any group or individual who can affect or

is affected by the achievement of an organisations objectives” – presents problems as boundaries become imprecise: a NGO in one country may claim stakeholder status in another country

• It doesn’t always address power relations

• Subjectivity of deciding who is a stakeholder

• Bringing stakeholders to the same table may result in more not less conflict.

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Benefits of Stakeholder AnalysisBenefits of Stakeholder Analysis


1. Can improve quality, efficacy and evaluation of policies and projects

2. Can improve assessment of social and political impacts of policies and projects

3. Allows for differences in opinions to be identified

4. Doesn’t differentiate between those who own versus those with interest in tourism so does not automatically exclude non-owners

5. Makes managers responsible for more than profit maximisation (the triple bottom line)

6. Its relevance for identifying multiple objectives and concerns (e.g between economic, social and environmental viewpoints and between different interests of different stakeholders)

7. A way in which the need and interests of people who are under-represented politically and economically can be highlighted.

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A Model for Stakeholder Analysis A Model for Stakeholder Analysis

(Hardy 2001)

any boundary(indicative diagram only. There could be

many more arrows representing many more relationships)

N=x

GROUP 2

GROUP 3

GROUP 4

GROUP 1

N=x N=x

N=x

A general model for Stakeholder Analysis,

applicable at any scale.


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Multiple arrows represent interactions, reactions and feedback between stakeholder groups.

‘N’ represents the number of different stakeholders that may exist within any

stakeholder group.

The outer circle represents any boundary -

regional, local or state.

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A Model for Stakeholder Analysis A Model for Stakeholder Analysis

(Hardy 2001)

What do we mean when we say a stakeholder group is mixed?

N=8

GROUP 1; Accommodation

Sector

GROUP 3COMMUNITY

N=5

Suppose Group 3 represents the community sector, there may be farmers, landless peasants, small stallholders, and home-stay lodge owners. As with other groups of stakeholders, within this group there will be different interests and objectives. Note that the home stay lodge owners can be located in two different groups, and their interests within the two groups may not be identical!

Suppose Group 1 represents the accommodation sector, there may be two 4-5 star hotels, an eco-lodge, a backpacker lodge, an airport transit motel, a tented safari camp, and 2 community home-stay lodges (N=8).

Some of their objectives and interests will be VERY different and they may experience greater difficulty agreeing among one another than with representatives from other groups of stakeholders.

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Strategic Analysis of Stakeholders

Assess:

Interests, aspirations (share the vision?)

Problem perception (each one sees different aspects of the same problem – which aspect?)

Resources (capable and motivated to participate and contribute?)

Roles. Ways to enlist participation in the project (How to involve them in the project so that envisioned changes can happen?)

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SummarySummary

• Stakeholder analysis assists understanding of tourism as a system encompassing different interests such as environmental, financial, community and tourists satisfaction interests.

• It is therefore an appropriate tourism planning method to identify multiple objectives as it presumes no one stake predominates.

• However it raises the issue of: Where do stakeholders start and end?

• Stakeholder management is a methodology within which sustainable tourism development can be delivered.

• It is an essential component of Value Chain Analysis where stakeholders and their interests must be identified, and partnerships between them forged to maximize poverty alleviation.

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Stakeholder Table: Public Transport example

Stakeholder Interests Problem Perception

Resources Role / Mandate

Passengers Safe, reliable, and reasonable public transport

Many delays

Frequent bus

breakdowns

Frequent accidents

Impolite drivers

Dangerous driving

Willingness to pay for improved services

Not applicable

Private Car owners

No traffic jams and safe roads

Too many accidents caused by buses

May consider use of public transport if reliable and safe

Not applicable

Mayor of Port Rarorialofa

Reliable, low-cost public transport system

Citizen complaints

about public

transport system

Increased traffic jams

Veto power in Council

Commands popular support

To manage City of Port Rarorialofa

Bicycle PowerFor the Future

Reducing pollution for healthy living

Car emissions, obese people

5,000 members To lobby Mayor and change public opinion

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Groups Interests Problem Perception

Resources Role / Mandate

1.

2.

3.

4.

EXERCISEIdentify 4 stakeholders involved in the

Kokoda Track tour

END

04. stakeholder analysis

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