Effective Stakeholder Management Response Strategies

The Importance of Effective Stakeholder Management

Discuss about sakeholder management responses, monitoring and control of stakeholder relationship.

Effective stakeholder management is extremely important for a company and this is a proven fact. There’s no single company in the world that has prospered without the support of the stakeholders and hence managing stakeholders should be given paramount importance. The classic stakeholder theory emphasises on the approach to stakeholders which helps in survival of a particular country in this scenario in the modern business companies use the stakeholder theory to effectively handle the different stakeholders. In addressing stakeholder needs and it is very important for a company to have better view of their possible stakeholders. For Pie Face Australia their stakeholders are Employees, Management who are internal stakeholders of the company and on the other hand external stakeholders of the company forms to be the Australian community, government, media, and professional bodies and finally the connected stakeholders of the company are customers, distributors, suppliers, financers, retailers et cetera (Aaltonen & Sivonen, 2009). In this case it was clear that the stakeholders of Pie Face were not satisfied with the kind of transparency showed by the company in addressing its stakeholders. Overall it is important to mention while the company has not been able to management its stakeholders properly it is important to come up with possible stakeholder management responses which could be utilised in the present case to effectively develop stakeholder management for Pie Face. The possible responses to stakeholder management are:

Implementation of change management: Implementation of change management could be a very effective response to handle stakeholder management. A change in the overall organisation will help to revamp the infrastructure, the management and the approach towards the stakeholders. For instance Pie Face has been financially unstable in the market for a long time and hence it could be said that revamping its management system will help the company to answer the needs of the stakeholders effectively. The internal stakeholders like employees would be better placed to show their skills and positive approach to develop the position of the company in the market which would help to change the approach to the operation effectively. The constant fruitful communication with the lower level and upper level employees will be effective in motivating change within the organisation (Crilly et al., 2012). Pie Face has been hit financially which means the company will be doing cost cutting in the form of termination and many inefficient employees will be terminated in this situation employees could be motivated to perform well to retain their jobs which will work to good effect for the company to come back to a stable position. Apart from this it could also be mentioned that external stakeholders could be kept informed about the different implementations which would help the company to handle stakeholder problems. The media and the government should be kept well informed in order to get their support effectively (Yang et al., 2011).

Possible Responses to Stakeholder Management

Communication strategy: Communication is always important within a workplace setting it becomes essential during the stakeholder management procedure. There are different models of communication but they all focus on achieving one common solution that is effective communication with the stakeholders. Verbal communication is one of the mostly used communication procedure for the buildup of stakeholder relationship. Apart from that encoded messages are also in use nowadays which helps to interact with stakeholders. As stakeholders entities like media and common people like to know the updates of the company Pie Face. So far the company has not been able to effectively take up communication which would help the company to answer all the possible questions of the stakeholders. It could be said that Media is a public forum and helps in disseminating information in large scale but so far Pie Face has not been able to address their issues and inform their stakeholders for instance the likes of communities and suppliers and normal consumers about their financial problems and low production. Hence it could be said that communication strategy used by the company is not effective and has to be remodeled in order to handle stakeholders successfully (Weiss, 2014). Effective communication between stakeholders is only possible through direct verbal communication and by addressing them through the mass media. Effective communication within the system is also very important for that electronic communication and group conversation and personal communication are very effective. At the present moment there are aspects which need to be handled effectively for the smooth communication. In this context it could be said that presently the company does not have effective communication strategy as the management has internal conflict and hence the system has failed to communicate with the employees and the upper management. A direct communicative approach would be much more effective in this scenario. It is important to mention that implementation of free style communication system would be effective. Each and every department should be able to communicate with each other without any barriers and should be directly connected to the CEO.

Organisational structure and design: Organisational structure is extremely important for the development of the overall operations of a company. The development in the organisational structure and culture in this case is not needed but streamlining the overall design is extremely important. It could be said that organisational structure stands to be an extremely important aspect of a business and making certain modifications in the organisational structure could be of immense help. The organisational structure of Pie Face is focused on the hierarchical view. It means all the decisions taken by the company comes through a chronological order that at times takes a lot of time to decide on certain issues. Overall it could be said that organisational structure and design in the company should be restored with few effective modifications made which would help the company to develop effective stakeholder relationship (Weiss, 2014). It is very important for the company to go for the right kind of organisational design. There are two kinds of organisational design Mechanistic and organic designs. The mechanistic design is much more orthodox and abides by the different rules and principles lay down by the company whereas on the other hand organic structure is much looser and is based on personal coordination. It is important for the company to have an effective hierarchical structure and mechanistic design which would help the company to make decisions effectively and handle its staffs in a strict manner. As stakeholders staffs should be allowed all kinds of facilities and proper organisational structure and design will help the staffs to get adapted to the system of the work and perform effectively (Garvare & johanson, 2010).

Implementation of Change Management

Corporate Governance: The corporate governance of a company is mainly focused on developing an effective relationship with its stakeholders through addressing their needs successfully. Corporate governance within Pie Face has not been effective and hence this situation has arisen. The company has to have strong corporate governance policies which will help to develop the relationship with the stakeholders. In the recent past Pie Face has experienced troubles with its external stakeholders which have also affected the position of the company. It is important to mention that Pie Face corporate governance should involve different suitable policies of addressing the stakeholder needs. For instance indulging in Corporate Social Responsibility Activities will help the company to come close to its stakeholders and manage them in an effective way. Keeping in the touch with the investors effectively and ensuring a fruitful run for them is highly effective for the company in this scenario. It is important that from now on whatever the company does focuses on the development of its stakeholders effectively. The internal stakeholders should be regularly assessed and given rewards accordingly for the growth and development. Overall it is important to mention as the corporate governance of the company should focus on the welfare of its stakeholders it will gradually develop the financial status of the company (Verbeke & Tung, 2013).

The strategic stakeholder management response systems will be effective when it is kept under scanner to assess its performance. Monitoring and control of stakeholder management is extremely important as it will help to understand the effect of each and every response given for the effective stakeholder management. Controlling stakeholder relationship could be defined as the process of monitoring, controlling and engaging stakeholders in relationships which would help to develop the performance in the long run. It is important to mention that most of the stakeholder management program gets affected by poor monitoring and control of stakeholder relationship hence it has to be said that stakeholder management is properly monitored and controlled. Monitoring and controlling stakeholders is basically monitoring the different processes of engaging stakeholders within the business and controlling stakeholder engagement within the operation of the business. At Pie Face the monitoring and Controlling of the stakeholder management wasn’t done properly which has led to the problems within the company (Minoja, 2012). Monitoring stakeholder management means assessing the overall stakeholder engagement which helps identify loopholes in the strategy and develop accordingly to bring out suitable results. In the present case it is highly visible that communication with the stakeholder was not effective and hence the company will have to develop its communication system in order to effectively develop its stakeholder relations successfully. Colleting suitable data, assessing stakeholder engagement, identifying the risks and issues and then implementation of the strategies is the best possible monitoring and control cycle for stakeholder management. Since Stakeholder stands to be a key entity in the development of the business at this juncture with the change in organisational structure and design would clearly help the business to develop stakeholder relationship and management (McKee et al., 2010).

Conclusion

The present study has covered up different key aspects of the stakeholder management response and which has helped to identify the key processes of handling stakeholder management and relationship successfully. Overall it could be said that the study has been successful in meeting the objectives of the study.

References

Aaltonen, K., & Sivonen, R. (2009). Response strategies to stakeholder pressures in global projects. International Journal of Project Management,27(2), 131-141.

Crilly, D., Zollo, M., & Hansen, M. T. (2012). Faking it or muddling through? Understanding decoupling in response to stakeholder pressures. Academy of Management Journal, 55(6), 1429-1448.

Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.

Garvare, R., & Johansson, P. (2010). Management for sustainability–a stakeholder theory. Total Quality Management, 21(7), 737-744.

McKee, K. B., Richardson, K., Hinton, M., & Lamb, L. F. (2010). Applied public relations: Cases in stakeholder management. Routledge.

Minoja, M. (2012). Stakeholder management theory, firm strategy, and ambidexterity. Journal of Business Ethics, 109(1), 67-82.

Verbeke, A., & Tung, V. (2013). The future of stakeholder management theory: A temporal perspective. Journal of Business Ethics, 112(3), 529-543.

Wang, H., & Qian, C. (2011). Corporate philanthropy and corporate financial performance: The roles of stakeholder response and political access.Academy of Management Journal, 54(6), 1159-1181.

Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.

Yang, J., Shen, G. Q., Ho, M., Drew, D. S., & Xue, X. (2011). Stakeholder management in construction: An empirical study to address research gaps in previous studies. International Journal of Project Management, 29(7), 900-910.