Chapter 2: Managing Public Issues and Stakeholder Relationships

Chapter 2Managing Public Issues and Stakeholder RelationshipsCopyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinCh. 2: Key Learning ObjectivesEvaluating public issues and their significance to the modern corporationApplying available tools or techniques to scan an organization’s multiple environmentsDescribing the steps in the issue management process and determining how to make the process most effectiveIdentifying who is responsible for managing public issues and the skills required to do so effectivelyUnderstanding how business can build collaborative relationships with stakeholders through engagement, dialogue, and network-buildingIdentifying the benefits of stakeholder engagement to the business firm2-*Public IssuesPublic issue Any issue that is of mutual concern to an organization and one or more of its stakeholdersStakeholder expectations A mixture of people’s opinions, attitudes, and beliefs about what constitutes reasonable business behavior2-*Public Issues: Performance-Expectations GapDiscrepancy between what stakeholders expect and what an organization is actually doingImportant to identify emergent expectations as early as possibleDoing so can gain the company competitive advantageFailure to understand stakeholder concerns and to respond appropriately will:Cause the performance–expectations gap to growThe larger the gap, the greater the risk of stakeholder backlash or missing a major business opportunity 2-*Figure 2.1The Performance-Expectations Gap2-* Environmental Analysis and IntelligenceEnvironmental analysisA method managers use to gather information about external issues and trends, so they can develop an organizational strategy that minimizes threats and takes advantage of new opportunitiesEnvironmental intelligenceThe acquisition of information gained from analyzing the multiple environments affecting organizations2-*Eight Strategic Radar ScreensFigure 2.22-*Competitive IntelligenceThe systematic and continuous process of gathering, analyzing, and managing external information about the organization’s competitors that can affect the organization’s plans, decisions and operationsNumerous ethical issues arise in acquisition and use of information gathered through competitive intelligence, public affairs managers must be keenly aware of these issues2-*The Issue Management ProcessIdentify IssueAnticipating emerging concerns, or “horizon” issuesAnalyze IssueEvaluating the issue; coming to an understanding of how it will evolve and how it will affect the organizationGenerate OptionsEvaluating action options, involves complex judgments that take into account “non-quantifiable” factors like the company’s reputationTake ActionOnce option is chosen, must design and implement itEvaluate ResultsMust assess results of the program and make adjustments as needed2-*Figure 2.3The Issue Management ProcessThe process continuously cycles back to the beginning and repeats2-*Organizing for Effective Issue ManagementWhich part of the organization is mobilized to address a particular emerging issue often depends on the nature of the issue itselfA corporation’s issue management activities are usually linked to both the board of directors and to top management levelsEffective global leadership on public issues requires three basic capabilities:Understanding of the changing business contextAbility to lead in the face of complexityConnectedness – The ability to engage with external stakeholders in dialogue and partnership2-*Stages in the Business-Stakeholder RelationshipOver time, the nature of business’s relationship with its stakeholders often evolve through a series of stagesInactive – Companies ignore stakeholder concernsReactive – companies act only when forced to do so, and then in a defensive mannerProactive – Companies try to anticipate stakeholder concerns Interactive –Companies actively engage stakeholders in an ongoing relationship of mutual respect, openness, and trust2-*Drivers of Stakeholder EngagementStakeholder engagement is, at its core, a relationshipThe participation of a business organization and at least one stakeholder organization is necessary, by definition, to constitute engagementEngagement is most likely when both the company and its stakeholders both have an urgent and important goal, the motivation to participate, and the organizational capacity to engage with one another2-*Making Engagement Work EffectivelyIn stakeholder dialogue, a business and its stakeholders come together for face-to-face conversations about issues of common concernCorporations sometimes encounter public issues that they can address effectively only by working collaboratively with other businesses and concerned persons and organizations in stakeholder networksEngaging with stakeholders benefits businesses by bringing in expertise, enhancing legitimacy, and generating creative solutions to common problems2-*