Stakeholders, by the nature of their role, conduct ongoing

Stakeholders, by the nature of their role, conduct ongoing assessments of the effectiveness of organizations. What are some of the ways stakeholders assess organizational effectiveness? Which of these is most valid? Why? Is there ever a time when stakeholders wield too much influence on the organization? Why or why not?

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The nature of an organization’s relationship with stakeholders often evolves through a series of stages (inactive, reactive, proactive, and interactive). In which of these stages is the organizational response to stakeholder input most effective? Why? Is there ever a situation in which a response based in the seemingly least desirable stage is actually the most valid? Why or why not?

Stakeholders and Organizational Effectiveness

Introduction

Defining organizational effectiveness in relation to the contributions of multiple stakeholders is difficult. Searching the internet for a definition of organizational effectiveness returns thousands of possibilities. This indicates that there is a great deal written on the subject with no definitive answer. This lecture will explore the issues of multiple stakeholder perspective. In addition, the stages of organizational/stakeholder interactions will be explored. These stages include the inactive, reactive, proactive, and interactive stages. Combined, the perspectives and data generated must entwine to become effective organizational stakeholder strategy.

Examining Stakeholder Needs and Goals

Stakeholder groups relate to an organization in a variety of ways. These stakeholders are either working independently or in coalitions to achieve specific goals, which may or may not be evident to the organization. This produces both positive and negative effects on the organization. On the positive side, an organization depends on the collective contributions of stakeholders as a means to become viable. Since each group is motivated by its own individual set of goals, the organization becomes effective by discovering and working toward meeting those goals. Further, by evaluating how well it meets these goals, the organization can determine if success criteria are met. On the other hand, stakeholders evaluate the organization by how well their goals are met; if their goals are not met and/or if the organization does a poor job of evaluating needs, there is a good chance these stakeholders will look elsewhere for ways to attain their goals and objectives. For this reason, the way an organization evaluates and works toward meeting the goals of their stakeholder groups greatly determines the success or failure of the organization (Beardshaw&Palfreman, 1990).

Stakeholders further evaluate an organization by the return they receive on their investment. Because there are many different types of stakeholders with a large variety of needs, the value they place on these returns could be created by any number of resources including but not limited to their salaries, stock options, conditions of employment, goods received, or career prospects along with community service or a myriad of other things. The value placed depends entirely on primary drivers of the stakeholder. Necmi and Mezuno (2012) state that the basic issue in determining return on investment becomes how to capture different stakeholder perceptions on a common set of performance measures and to distill this information into a single and workable organizational plan.

Identity Synergy

Based on the needs of the organization, it is important that a strong identity be developed while also creating a relationship between the organization and stakeholders. Once the relationship is developed, stakeholders find it much easier to relate to the organization in terms of identifying with its mission and vision. This close identification will, in turn, contribute to positive outcomes for the firm and stronger stakeholde