TOPIC 1.2: Stakeholders
As reflected in the introduction, stakeholders may be defined as individuals or groups on whom the agency depends and without whom the agency would cease to exist. Agency staff (and clients) are clearly stakeholders as are people in other agencies whether they be private, government or non-government agencies. Managing outwards in a networked government recognises stakeholders throughout the system within which the public manager exists.
Stakeholders provide vital information for assessing the internal and external environment. They provide information on the market, potential strengths and weaknesses and often see opportunities and threats from a ‘fresh’ perspective.
Stakeholders include people, organisations or groups with an interest or stake in the line of business. We will see more detail in Module 4 regarding stakeholders in policy communities and issue networks.
A number of questions may be asked of stakeholders when determining the dynamics of the stakeholder environment. These include:
- What does this stakeholder say about your organisation’s or business unit’s strengths and weaknesses?
- What problems need solving?
- What trends do they perceive as either opportunities or threats?
- What does this stakeholder need or expect from your organisation or business unit?
- What does this stakeholder want you to do more or less of?
- What additional or increased programs or services do they think you should be offering if resources were available?
Conducting a stakeholder analysis is an example of a systems approach, which takes account of some of the ‘soft’ system factors. For example, we may identify stakeholders, with reference to their relationship with your organisation or service, including stakeholder sources of motivation, power, knowledge and influence.
Required Activity
20 min
- Brainstorm a list of stakeholders who have an interest in, or who might be impacted by your work (program or proposed change).
- Cluster or group stakeholders based on their shared interests.
- Apply the ‘Understanding Stakeholders’ Diagnostic Tool in Table 1.1 below to 2 or 3 of your key stakeholders to identify the likely overall influence that each stakeholder group may have.
- Rank the various factors. What does this tell you about the various stakeholders? Which are crucial? Where are the risks?
| Stakeholder: _______________________ | V. Low 1 |
Low 2 |
Avg 3 |
High 4 |
V. High 5 |
| Dependency – groups or individuals who are directly or indirectly dependent on the organisation’s activities, products or services, or on whom the organisation is dependent in order to operate. | |||||
| Responsibility – groups or individuals to whom the organisation has, or in the future may have, legal, commercial, operational or ethical/moral responsibilities. | |||||
| Tension – groups or individuals who need immediate attention from the organisation with regard to financial, wider economic, social or environmental issues. | |||||
| Influence – groups and individuals who can have impact on the organisation’s or a stakeholder’s strategic or operational decision-making. | |||||
| Diverse Perspectives – groups and individuals whose different views can lead to a new understanding of the situation and the identification of opportunities for action that may not otherwise occur. | |||||
| Total Possible out of 25 |
Table 1.1: Understanding Stakeholders Diagnostic Tool
Recommended
You might find the current AccountAbility AA1000 Stakeholder Engagement Standards a useful reference. This can be downloaded for free by signing up on the website.
Required Activity
20 min
Look at Table 1.2: ‘Tools of Engagement’ presented below. What techniques and approaches might you apply to communicate or engage with one of your stakeholder groups? Mark/tick those you would be likely to use.
Your Stakeholder Group ________________________________
| Level of Engagement | Methods of Engagement |
| Consult – Limited two-way engagement: organisation asks questions; stakeholders answer | • Surveys
• Focus Groups • Meetings with selected stakeholder/s • Public Meetings • Workshops • Online feedback mechanisms • Advisory committees |
| Negotiate | • Collective bargaining with workers through their trade unions |
| Involve – Two-way or multi-way engagement: learning on all sides but stakeholders and organisation act independently | • Multi-stakeholder forums
• Advisory panels • Consensus building processes • Participatory decision making processes • Focus groups • Online feedback schemes |
| Collaborate – Two-way or multi-way engagement: joint learning, decision-making and actions. | • Joint projects
• Joint ventures • Partnerships • Multi-stakeholder initiatives |
| Empower – New forms of accountability; decisions delegated to stakeholder; stakeholders play a role in governance. | • Integration of stakeholders into governance, strategy and operations management |
Table 1.2: Tools of Engagement
Source: International Association of Public Participation https://www.iap2.org/mpage/Home
Government agencies constantly adapt to stakeholders and the environments in which they operate. Continuous improvement processes are part of managing outwards in a networked government.
Changing environmental conditions and stakeholder influences, have seen government agencies adapt in many ways. For example, continuous improvement and operational reforms may focus on:
- Renewal and review – Implementing contestability processes to establish whether services delivered by government are appropriate compared to alternative market based options.
- Performance management – Measuring outputs through purpose-built techniques including program budgeting, corporate planning, performance indicators and payment for outcomes.
- Entrepreneurial action – Moving away from the standard product and becoming experimental, innovative and inventive; placing greater emphasis on risk-taking and place-based initiatives.
- Principal/agent separation – The separation of the responsibilities of policy-makers from service delivery organisations, which may be other government agencies or private sector organisations; purchaser–provider contracts are a feature of this separation.
- Quasi market – Policy owners seek bids or engage multiple program delivery agencies in an effort to reduce costs and improve efficiencies. For example, government’s investment in Non-Government Organisation (NGOs) for the delivery of many social services.
- Citizen responsibility – The idea that those receiving services should become more active on their own behalf; consumer sovereignty, personalising service and self-help. For example, the role of people with disabilities in the NDIS.
A key driver changing stakeholder relationships and enabling government to do business differently is the digital revolution.
Recommended
15 min
In relation to the stakeholder group you have nominated and the level and methods of engagement, consider how you would go about finding answers to these questions:
- In what ways does this stakeholder group affect our organisation and do they represent a wider group?
- What motivates the key individuals in the stakeholder group?
- How powerful is this stakeholder group? What gives them this power?
- What factors might affect that power in the future?
Deeper Learning
15 mins
You were introduced to the ‘Rich Picture’ systems thinking tool in GSZ631 Managing within the Context of Government which helps you to think about and identify the inter-relationships between systems and stakeholders in your workplace.
Using a rich picture approach, map the system within which you work. Identify the stakeholders and their interests, alliances and conflicts in your system.
Your rich picture should:
- illustrate the stakeholder dynamics in your system.
- identify the ways in which relationships between stakeholders in your system are changing.
- What do you think is driving changing relationships?
Figure 1.1 below is an example of a rich picture and following that are some guidelines for developing one.
Guidelines to developing rich pictures:
- Assemble everything relevant to a problem situation – all your observations.
- Use words only where ideas fail you for a sketch that traps your meaning.
- Don’t impose any particular style or structure on the picture. Place pics where appropriate.
- If you ‘don’t know where to begin’, the following may get you started:
- first look for structure in the situation (relatively stable – the people, official organisations, elements of the landscape)
- next look for elements of process within the situation (what’s changing?)
- then look for the ways in which the structure and the processes interact.
- Include not only the ‘hard’ factual data, but also, the ‘soft’ and subjective.
- Examine social roles and behaviour expected from those roles. Catch conflicts.
- Include yourself in the picture. Ensure your roles and relationships are clear.