Several recent black swan events eroded the public’s
trust in business as an institution and freemarket
capitalism as an economic system.
■ The effective management of stakeholders, the
organization, groups, or individuals that can materially
affect or are affected by the action of a firm,
is necessary to ensure the continued survival of
the firm and to sustain any competitive advantage.
LO 1-5 / Conduct a stakeholder impact
analysis.
■ Stakeholder impact analysis considers the needs
of different stakeholders, which enables the firm
to perform optimally and to live up to the expectations
of good citizenship.
■ In a stakeholder impact analysis, managers pay
particular attention to three important stakeholder
attributes: power, legitimacy, and urgency.
■ Stakeholder impact analysis is a five-step
process that answers the following questions for
the firm:
1. Who are our stakeholders?
2. What are our stakeholders’ interests and
claims?
3. What opportunities and threats do our stakeholders
present?
4. What economic, legal, and ethical responsibilities
do we have to our stakeholders?
5. What should we do to effectively address the
stakeholder concerns?