Multi-StakeholDer Dialogue 52621 Defining Stakeholding stakeholding is a process by which stakeholders are actively involved in the design, delivery, review and improvement of products and services (including political and social services). stakeholders are involved to ensure gains over the long term.1 stakeholder theory describes organizational connections to stake- holders addressing how stakeholders can enhance an organization and become more engaged.2 types of Stakeholders A stakeholder is a person, or group of persons, with who has an interest or concern in a particular process due to direct or indirect involvement. Marsh (1998) proposes four major types of stakeholders (p. 27).1 1. Core Stakeholders ­ people essential to Teachers the organization or process (Core stakeholders) 2. Customers ­ people who receive the Children (Customers) product or service (community members, interest groups) Department 3. Controllers ­ people who define, regulate, of Education (Controllers) and influence the organization or process (legislators, regulators, providers of capi- Parents (Core stakeholders) tal, government services, media, trustees) 4. Partners ­ people through whom part Bus company or all of the service is provided (suppli- (Partners) ers, temporary staff, distributors, agents, Figure 1. Vector diagram showing example stakeholder consultants) requirements for a school (Marsh, 1998) What is Stakeholder Dialogue?3 · An interactive, working communication process that involves all types of stakeholders in decision-mak- ing and implementation efforts. · involves all interest groups with a concern in a two-way communication process. · Focuses on increasing understanding and relations among stakeholders through the use of communi- cation that enable participants to move forward with implementation plans. · stakeholder dialogue is generative ­ discourages blaming for the past and creates a shared future. 1 Marsh, J. (1998). A Stake in Tomorrow: World Class Lessons in Business Partnerships. London: B.t. Batsford Limited. 2 Freidman, A. L., & Miles, s. (2006). Stakeholders: Theory and Practice. new York: Oxford university Press. 3 the environmental Council (2006). Principles of Stakeholder Engagement. retrieved May 21, 2007 from http://www.the-environment- council.org.uk/principles-of-stakeholder-engagement.html. Multi-Stakeholder Dialogue | CommGAP Dimensions of Stakeholder Dialogue4 Pederson (2006) has identified five dimensions of stakeholder dialogue and engagement. These five dimensions define the extent to which a stakeholder dialogue is truly participatory. For a dialogue to be productive and participatory all these dimensions should be considered. 1. Inclusion ­ If important stakeholders are left out of decision-making the benefits of dialogue can be limited. dialogue should include important groups and individuals affected by the issues. 2. Openness ­ dialogue should be open so that all stakeholders have a chance to voice their opinions. Organizations should not have a predetermined agenda or plan. 3. Tolerance ­ One opinion should not take precedence over others, no arguments should be consid- ered more legitimate. stakeholders and organizations must be open minded. 4. Empowerment ­ stakeholders should feel that they have the ability to affect the structure, pro- cess, and outcomes of dialogue (p. 142). stakeholders will be less committed if they sense an imbalance of power. 5. Transparency ­ All stakeholders involved in the dialogue should be given information needed to make decisions and implement outcomes. Factors that Affect the Quality of Stakeholder Dialogue3 Despite the desire for a productive and participative process, there may still be factors that influence the quality of stakeholder dialogue. the following four features determine the outcome of stakeholder dialogues: 1. Commitment ­ there must be a willingness to give priority and resources to the issue at the heart of the dialogue. Additionally, key persons must be committed to planning and implementation of decisions. 2. Capacity ­ refers to the physical, organizational, and human resource available for stakeholder dialogue. Organizations with more resources may have more capacity for dialogue. However, even when organizations have capacity it does not mean they are willing to use them. Commitment 3. Consensus ­ A precondition for dialogue is that (Willingness) there be some degree of goal congruence and shared values or preferences. there must be consensus between participants in the dialogue Consciousness Capacity (Knowledge & STAKEHOLDER and implementing agents. Awareness) DIALOGUE (Resources) 4. Consciousness ­ Organizational leaders must assist in the implementation of stakeholder dia- Consensus logue. dialogues must become integrated into (Consensus vs. the organizational system as opposed to some- Conflict) thing extraneous. People must be conscious of Source: Pedersen (2006) inspired by discussion- how they translate stakeholder dialogue into Orientated Organizational self-Assessment action. (www.edc.org) 4 Pederson, e. r. (2006). Making corporate social responsibility (Csr) operable. How companies translate stakeholder dialogue into practice. Business and Society Review, 111:2, 137­163. Multi-Stakeholder Dialogue | CommGAP | 2 Stakeholder Types and Strategies for Dialogue5 While multiple stakeholder dialogues present an opportunity for participative and integrated decision- making, these dialogues can be challenging. savage, nix, Whitehead, and Blair (1991) suggest that orga- nizations learn to manage their stakeholders and present a typology of stakeholders and strategies for managing each type. StakeholDer type 1: the Supportive StakeholDer the supportive stakeholder is the "ideal" High Potential for threat Low stakeholder that supports organizational goals and actions. High Stakeholder Type 4 Stakeholder Type 1 Strategy: involve supportive stakeholders (Mixed blessing) (Supportive) Strategy: Collaborate Strategy: Involve to maximize their cooperative potential. Potential for cooperation StakeholDer type 2: the Marginal Stakeholder Type 3 Stakeholder Type 2 StakeholDer (Non-supportive) (Marginal) Low Strategy: Defend Strategy: Monitor this type of stakeholder is neither highly threatening nor cooperative. these types of stakeholders are generally not concerned about issues (although they may have "hot button" issues). Strategy: Monitor these individuals and recognize their interests are specific. Activate these stakeholders when issues are salient to them. StakeholDer type 3: the nonSupportive StakeholDer these stakeholders have high threat potential and are low on cooperation. therefore, these individuals are most threatening to an organization. Strategy: defend against a nonsupportive stakeholder. reduce dependence that is the basis for the stake- holders' interest in the organization or issue. StakeholDer type 4: the MixeD BleSSing StakeholDer. these stakeholders are individuals who could potentially threaten or cooperate (savage et al. (1991) describe these as people who are in short supply). Strategy: these individuals must be managed with collaboration that seeks to maximize stakeholder coop- eration (making threatening stakeholders less likely to oppose the organization). Stakeholder Involvement Strategies6 By engaging in dialogue or symmetrical communication both the organization and stakeholders may change. Organizations can seek to be influenced and influence other stakeholders by the following: · Engage frequently and systematically with stakeholders to determine mutually beneficial action. · remember communication must be two-way. the aim of dialogue should be to achieve mutual under- standing and rational agreement or consent. · Organizations that set policies which dictate transactions with stakeholders will not be successful. 5 savage, G. t., nix, t. W., Whitehead, C. J., and Blair, J. d. (1991). strategies for assessing and managing organizational stakehold- ers. Academy of Management Executive, 5:2, 61­75. 6 Morsing, M. and schultz, M. (2006). Corporate social responsibility communication: stakeholder information, response and involve- ment strategies. Business Ethics, 15:4, 323­338. Multi-Stakeholder Dialogue | CommGAP | 3 · rather than imposing initiatives on stakeholders, invite stakeholders to become involved in negotia- tions to explore their concerns about initiatives (making changes along the way). · if there are not channels for communicating with stakeholders ­ create them! try to reach silent stakeholders and form partnerships with stakeholders early.7 Stakeholder Management Strategies the Clarkson Principles of stakeholder Management are "highly respected in the literature as a model of best practice" (p. 152) and acknowledge a commitment to dialogue with stakeholders.2 these principles are directed specifically at managers who are responsible for the performance of an organization, making them aware of diverse constituencies and the use of stakeholder management to increase success.8 they believe that managers must recognize their obligation to deal openly and honestly with stakeholders and emphasize interdependence among stakeholders. the following are seven principles of stakeholder Management. Clarkson Center for Business Ethics (1999) Principles of Stakeholder Management Principle 1 Managers should acknowledge and actively monitor concerns of all legitimate stakeholders, and should take their interests appropriately into account in decision- making and operations. Principle 2 Managers should listen to and openly communicate with stakeholders about their respective concerns and contributions, and about the risks they assume because of their involvement with the organization. Principle 3 Manager should adopt processes and modes of behavior that are sensitive to the concerns and capabilities of each stakeholder constituency. Principle 4 Managers should recognize the interdependence of efforts and rewards among stakeholders, and should attempt to achieve a fair distribution of the benefits and burdens of organizational activity among them, taking into account their respective risks and vulnerabilities. Principle 5 Managers should work cooperatively with other entities both public and private, to insure that risks and harms arising from organizational activities are minimized and, where they cannot be avoided, appropriately compensated. Principle 6 Managers should avoid altogether activities that might jeopardize inalienable hu- man rights or give rise to risks that, if clearly understood, would be patently unac- ceptable to relevant stakeholders. Principle 7 Mangers should acknowledge the potential conflicts between (a) their own role as organizational stakeholders, and (b) their legal and moral responsibilities for the interests of stakeholders, and should address such conflicts through open commu- nication, appropriate reporting and incentive systems, and where necessary, third party review. 7 Forstner, G., and Bales, J. (1992). Building dialogue into the public consultation process: Part one. Public Relations Quarterly. Fall 1992, 31­35. 8 Clarkson Center for Business ethics (1999/2001). Principles of Stakeholder Management. toronto: university of toronto. reproduced 2002, Business Ethics Quarterly, 12, 257­264. Multi-Stakeholder Dialogue | CommGAP | 4 Commgap the Communication for Governance and Accountability Program (CommGAP), a global program at the World Bank, seeks to confront the challenges inherent in the political economy of development. By applying innovative communication approaches that improve the quality of the public sphere ­ by amplifying citizen voice; promoting free, independent, and plural media systems; and helping government institutions communicate better with their citizens ­ the program aims to demonstrate the power of communication principles, processes and structures in promoting good and accountable governance, and hence better development results. CommGAP is funded through a multi-donor trust fund. the founding donor of this trust fund is the uK's department for international development (dFid). Communication for Governance & Accountability Program (CommGAP) Development Communication Division External Affairs Vice Presidency the World Bank 1818 H street, nW, Msn u11-1102 Washington dC, 20433 p 202.458.7955 F 202.522.2654 e commgap@worldbank.org WeB: www.worldbank.org/commgap Blog: publicsphere.worldbank.org