The STAKEHOLDER CONCEPT. In the 1970's Stamford Research Institute initiated the "stakeholder concept". We incorporated the concept into the GE strategic thinking process. It is clear that no successful organization can satisfy ALL Stakeholders since their interests and motivations differ. For instance if an organization decides to close plants because of economic or socio/political reasons and it must lay off people, this will not make the employees, the unions, local governments or communities happy and they will do what ever they can to stop the move. This is true with all strategies some have supportive and unsupportive stakeholders.

    Therefore it is important to evaluate the impact of key investment and differentiation strategies on all of the key stakeholders and determine who will be supportive and who will be negative and stop the strategies. Then have strategies or at least CONTINGENCY options to minimize the negatives and accentuate the positives.


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We discussed the need to have the right type of talent and be able to motivate, train and retain them. However there are other talents and skills that may not be critical but are still needed to execute successfully. You need to examine your strategy and determine the impact. For instance the strategy may call for exiting a business, a segment or discontinue a product or service line. This may have a negative reaction from employees and their union. However if a business is designated as a high growth and investment opportunity it may have a very positive reaction from employees. The message is to examine the impact on employees and determine if they are likely to respond positively and become allies or negatively and respond as an adversary.




There are many businesses that have a significant impact on a specific community and their strategies may also have a positive or negative impact. Major cities like Detroit and even states like West Virginia have been negatively impacted by the movement or decreasing employment. If your strategy recommends moving a production facility to another location you must anticipate a negative response and have strategies the help to influence the reaction of community leaders. In many cases unions and their members have boycotted companies who move and have even developed legislation and court orders to prevent the move or closings.


Obviously investors and stockholders must be satisfied or they will withdraw their funding, or even worse lead a revolt ot remove current management or even lead an unattractive take over.



The key stakeholders are the customers and it is important to understand the impact of the strategy on customers. For instance if the strategy calls for new features in a product or service that is desired by customers this is positive to both the customer and the organization. However if the strategy will eliminate a product or service that is currently used by customers then this could be a negative if it is not carefully research and implemented in a way that will be positive the customer. The message is that all key strategies must be assessed in light of the customer's needs and expectations.