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🤝Business Ethics and Politics

Stakeholder Management Models

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Why This Matters

Stakeholder management models are the conceptual backbone of modern business ethics—and they show up constantly on exams. You're being tested on your ability to understand how organizations identify who matters, why certain groups get prioritized, and what ethical frameworks guide these decisions. These models connect directly to broader course themes like corporate social responsibility, ethical decision-making, and the tension between shareholder primacy and stakeholder inclusivity.

Don't just memorize model names and their creators. Know what problem each model solves: Is it about classification? Prioritization? Engagement strategy? Ethical responsibility? When you can identify the underlying purpose, you'll be ready to compare models, apply them to case studies, and nail those FRQ prompts asking you to recommend a stakeholder approach for a given scenario.


Classification and Prioritization Models

These models answer a fundamental question: Who deserves attention, and how much? They provide systematic frameworks for sorting stakeholders based on measurable attributes like power, interest, or urgency.

Stakeholder Salience Model (Mitchell, Agle, and Wood)

  • Three core attributes—power, legitimacy, and urgency—determine which stakeholders demand immediate attention and resources
  • Seven stakeholder categories emerge from different combinations of attributes, ranging from dormant (power only) to definitive (all three attributes)
  • Dynamic relationships are central to this model; a stakeholder's salience can shift as circumstances change, requiring ongoing reassessment

Power-Interest Grid (Mendelow's Matrix)

  • Two-axis visual matrix plots stakeholders by their level of power (ability to influence) and interest (motivation to engage)
  • Four quadrants dictate engagement strategy: keep satisfied (high power, low interest), manage closely (high power, high interest), monitor (low both), keep informed (low power, high interest)
  • Resource allocation tool that helps managers avoid over-investing in low-priority stakeholders while ensuring key players receive adequate attention

Stakeholder Circle Model

  • Concentric circle visualization places stakeholders based on proximity to organizational decision-making and degree of influence
  • Core stakeholders occupy inner rings, receiving the most engagement, while peripheral stakeholders are acknowledged but not prioritized
  • Contextual awareness is built into the model—it reminds managers that even distant stakeholders can become central under changing conditions

Compare: Stakeholder Salience Model vs. Power-Interest Grid—both prioritize stakeholders, but Salience adds legitimacy and urgency as distinct factors beyond just power and interest. If an FRQ asks about dynamic stakeholder relationships, lean on Salience; for straightforward prioritization, use the Grid.


Strategic Analysis Tools

These aren't theoretical frameworks—they're practical processes for gathering intelligence about stakeholders and planning engagement. Think of them as the "how-to" complements to the classification models above.

Stakeholder Mapping

  • Identification and analysis process that systematically catalogs all parties with a stake in organizational outcomes
  • Relationship visualization reveals potential alliances and conflicts among stakeholder groups before they become problems
  • Strategic alignment function connects stakeholder interests to organizational goals, supporting coherent planning

Stakeholder Engagement Assessment Matrix

  • Effectiveness evaluation tool that measures whether current engagement strategies actually meet stakeholder needs
  • Gap analysis capability compares stakeholder expectations against organizational responses, highlighting areas for improvement
  • Iterative refinement is the goal—this matrix supports continuous improvement of engagement approaches over time

Compare: Stakeholder Mapping vs. Engagement Assessment Matrix—Mapping is diagnostic (who are they and what do they want?), while the Assessment Matrix is evaluative (are we meeting their needs?). Use Mapping early in strategic planning; use the Matrix to audit existing relationships.


Relationship and Communication Models

These models emphasize ongoing dialogue rather than one-time classification. They focus on how organizations maintain productive stakeholder relationships through proactive communication and responsiveness.

Savage et al.'s Stakeholder Management Model

  • Perception-focused approach prioritizes understanding how stakeholders view the organization, not just what they objectively want
  • Proactive risk mitigation through early identification of stakeholder concerns before they escalate into crises
  • Continuous feedback loops ensure communication flows both directions, allowing organizations to adapt to shifting expectations

Clarkson Principles of Stakeholder Management

  • Seven guiding principles including recognition, respect, responsiveness, and transparency form a comprehensive ethical framework
  • Trust-building emphasis positions ethical conduct as foundational to sustainable stakeholder relationships
  • Practical accountability standards give organizations concrete benchmarks for evaluating their stakeholder interactions

Compare: Savage et al. vs. Clarkson Principles—Savage focuses on managing perceptions and risks, while Clarkson provides ethical guidelines for conduct. Savage is more strategic; Clarkson is more normative. An FRQ about crisis communication favors Savage; one about ethical standards favors Clarkson.


Foundational Ethical Frameworks

These models go beyond management tactics to address why stakeholders matter in the first place. They challenge traditional business assumptions and establish ethical foundations for stakeholder-inclusive practices.

Stakeholder Theory (Freeman)

  • Challenges shareholder primacy by arguing that all stakeholders—employees, customers, communities, suppliers—are integral to business success
  • Broader value creation replaces narrow profit maximization as the purpose of business activity
  • Ethical accountability extends to all parties affected by organizational decisions, not just investors

Freeman's Strategic Management Model

  • Value creation for all stakeholders is positioned as strategically superior to shareholder-only approaches
  • Interconnected interests recognition means decisions must account for how benefits and harms ripple across stakeholder groups
  • Long-term success orientation argues that ethical treatment of stakeholders produces sustainable competitive advantage

Carroll's Pyramid of Corporate Social Responsibility

  • Four hierarchical levels—economic, legal, ethical, and philanthropic—structure an organization's obligations to society
  • Foundation-first logic means profitability (economic) and legal compliance must be achieved before ethical and philanthropic responsibilities can be meaningfully pursued
  • CSR assessment framework helps organizations evaluate whether their initiatives address all four responsibility levels

Compare: Stakeholder Theory vs. Carroll's Pyramid—both reject pure profit maximization, but Stakeholder Theory focuses on who deserves consideration, while Carroll's Pyramid addresses what types of responsibilities organizations owe. Use Stakeholder Theory for questions about decision-making inclusion; use Carroll for CSR evaluation questions.


Quick Reference Table

ConceptBest Examples
Stakeholder ClassificationSalience Model, Power-Interest Grid, Stakeholder Circle
Prioritization CriteriaSalience Model (power, legitimacy, urgency), Power-Interest Grid (power, interest)
Strategic Analysis ToolsStakeholder Mapping, Engagement Assessment Matrix
Communication & RelationshipsSavage et al., Clarkson Principles
Ethical FoundationsStakeholder Theory, Freeman's Strategic Management Model
CSR FrameworksCarroll's Pyramid
Dynamic Relationship FocusSalience Model, Savage et al.
Visual/Matrix ToolsPower-Interest Grid, Stakeholder Circle, Engagement Assessment Matrix

Self-Check Questions

  1. Which two models both use visual frameworks to categorize stakeholders, and how do their axes or dimensions differ?

  2. If a stakeholder suddenly gains media attention during a corporate scandal, which model best explains why their importance to the organization has increased—and what specific attribute changed?

  3. Compare and contrast Stakeholder Theory (Freeman) with Carroll's Pyramid: What fundamental question does each model answer, and how might you use both together in an FRQ response?

  4. An organization discovers that its community engagement efforts aren't meeting local residents' expectations. Which model would be most useful for diagnosing the gap, and which would guide the ethical principles for improvement?

  5. How do the Clarkson Principles and Savage et al.'s model both address stakeholder relationships, yet differ in their primary emphasis? When would you recommend each approach?