What are the major challenges that organizations face when attempting to balance differing stakeholder values

balance differing stakeholder values

In order to make effective decisions, organizations must consider the opinions and values of the involved stakeholders. What are the major challenges that organizations face when attempting to balance differing stakeholder values? How do these challenges influence the effectiveness of the organization? How can organizations best mitigate these challenges?

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DQ 2

Stakeholders often form partnerships across organizations. What is the primary motivation for the formation of these partnerships? What are the most significant contributions these partnerships can make to organizational effectiveness?

This module addresses issues from the stakeholder’s viewpoint. Interests of the stakeholder are taken into account, since what drives them to either become involved or detached may simply be based on an organization’s ability to accurately identify the stakeholder’s needs. This, in turn, drives the strategic plans an organization makes to meet these needs. In addition the power a stakeholder wields both within and external to the organization will be discussed. What are the main drivers, and how is the power both generated and influenced? Last, stakeholders may take special interests in common needs or issues. As they form coalitions and act to influence specific issues, the power and ability of stakeholders to generate plans and outcomes will become a driving influence in organizational process and policy.

Stakeholder Interests

Each stakeholder has a unique relationship with the organization. They also each have a unique hand in assisting the organization in value creation. Managers have a responsibility to both the organization and the stakeholders to remain cognizant of these needs and the interrelationships. Lawrence and Weber (2011) state that in exchange for their investment, stakeholders expect to receive various things in return. Although there are multiple stakeholders in any one organization, the process of identifying each stakeholder’s interests is difficult at best. In addition, Koll, Woodside, and Muhlbacher (2005) have found that, once these interests are identified, organizational responsiveness to keystakeholdersand performance becomes increasingly difficult based on the variety of needs. They further found that balanced responsiveness to multiple constituencies is more likely to lead to high organizational effectiveness than is focused responsiveness to a single group. They also noted that serving multiple stakeholderinterestsis challenging. Accurately and clearly identifying individual stakeholders and their related interests becomes critical.