11.2: Frameworks for analyzing stakeholders

Many different techniques exist to conduct stakeholder analysis. If you look through corporate sustainability reports or websites, you are likely to encounter some of these methods.

In general, the stakeholder analysis should help the company to identify:

– Which stakeholders are important and must be attended to, in terms of credibility and legitimacy of the stakeholder.
– Consider the change of those priorities over time (as things in the business environment change).
– Deal with conflicting stakeholder demands, because it may not be possible to please everyone

Stakeholder analysis can be broken down into four main phases.

Identifying: listing relevant groups, organizations, and people
The first step in the mapping process is to understand that there is no magic list of stakeholders. The final list of identified stakeholders will depend on the business, its impacts, and its current engagement objectives—as a result it should not remain static. This list will change as the environment around the business evolves and as stakeholders themselves make decisions or change their opinions.

Analyzing: understanding stakeholder perspectives and interests.
Once the business has identified a list of stakeholders, it is useful to do further analysis to better understand their relevance, the perspectives they offer, their relationship to the issue(s) and each other. This allows them to be prioritized based on their relevance and relative usefulness to the project.

Some criteria for identified stakeholder analysis include:
Contribution (value): Does the stakeholder have information, counsel, or expertise on the issue that could be helpful to the company?
– Legitimacy: How legitimate or valid is the stakeholder’s claim for engagement? For example, is the stakeholder providing financial or resource support?
– Willingness to engage (interest): How willing is the stakeholder to engage?
– Influence (power): How much influence does the stakeholder have? (Also clarify “who” they influence, e.g., other companies, NGOs, consumers, investors, etc.)
– Necessity of involvement: Is this someone who could derail or de-legitimize the process if they were not included in the engagement?

These five criteria can be used to create and populate a summary chart of how stakeholders fulfill each of them. Values (low, medium, or high) can then be assigned to each of these stakeholders. This data set may then assist with identifying which stakeholders to prioritize and engage.

Mapping: visualizing relationships to objectives and other stakeholders
Mapping stakeholders is a visual exercise and analysis tool that you can use to further determine which stakeholders are most useful to engage with. Mapping allows us to see where stakeholders stand when evaluated by the same key criteria and compared to each other and helps you visualize the often complex interplay of issues and relationships created in the criteria chart above (See tab on: Analyzing).

Prioritizing: ranking stakeholder relevance and identifying issues
It is not practical and usually not necessary to engage with all stakeholder groups with the same level of intensity all of the time. Being strategic and clear about whom you are engaging with and why, before jumping in, can help save both time and money. Combined with the criteria chart and mapping, companies utilize issue materiality to rank their stakeholders into a prioritized engagement list. This facilitates the identification the most relevant issues and the most relevant stakeholders.

Not all stakeholders are equally critical to the company’s business. To identify critical stakeholders, the management of a company must consider: (i) the stakeholder’s power, (ii) the stakeholder’s legitimacy, and (iii) the urgency of the issue at stake.

Those stakeholders that are important on all three dimensions are considered “definitive stakeholders” as seen in the diagram below.

Once we have figured out the power, legitimacy and urgency of the stakeholder, we can also look at the attributes of that stakeholder. The diagram below identifies the attributes the stakeholder already has (red boxes), and the attributes that the stakeholder would need to gain (grey boxes) in order to become a “definitive stakeholder”.

Supplementary Resources

Roberts (2015) “Stakeholder Analysis: What it is and why it matters”

Allen and Kilvington (2010) “Stakeholder Analysis”

%d bloggers like this: