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Relationship Building with Various Stakeholders

Relationship Building with Various Stakeholders

The key to building a strong stakeholder relationship is communicating effectively with all stakeholders.

LEARNING OBJECTIVES

Diagram the relationship of stakeholders, both internal and external, to a company including proper methods of communication

KEY TAKEAWAYS

Key Points

  • Stakeholders are involved in and/or affected (negatively or positively) by the outcome and impact of an action, project or program.
  • Internal stakeholders include stockholders, customers, suppliers, creditors, employees, etc. External stakeholders include the general public, communities, activist groups, the media, etc.
  • Marketing communication can be divided into internal flows and external flows directed at different target audiences. This necessitates different yet compatible communication strategies.
  • Preparing a communication plan involves five key points: defining the audience, defining its requirements, building a communications schedule, defining a medium of communication, and preparing the content.
  • It is important to create a written report after any stakeholder discussion.

Key Terms

  • stakeholder: a person or organization with a legitimate interest in a given situation, action, or enterprise
  • direct mail: Alternative expression for junk mail. Direct mail practices are often refined into “targeted mailing,” where mail is sent to select recipients considered most likely to respond positively.

Defining Stakeholders

Stakeholders are involved in and/or affected (negatively or positively) by the outcome and impact of an action, project or program. Stakeholders can be divided into two main categories:

Internal Stakeholders are engaged in economic transactions with the business. (For example, stockholders, customers, suppliers, creditors, and employees)

External Stakeholders are affected by or can affect a business’s actions without being directly engaged in the business. (For example, the general public, communities, activist groups, business support groups, and the media)

Types of Stakeholders

  1. People who influence an endeavor but are not directly involved with doing the work. Examples include managers, suppliers, or the financial department of an organization.
  2. People who are affected by any action taken by an organization or group. Examples are parents, children, customers, owners, and employees.
  3. An individual or group with an interest in an organization’s success. These stakeholders influence programs, products and services. An example of such a stakeholder is one who owns stock in the organization.
  4. Any organization, governmental entity, or individual that has a stake in or may be impacted by a given approach to environmental regulation, pollution prevention, energy conservation, etc. The environmental organization Greenpeace would be an example of such a stakeholder.
  5. A participant in a community mobilization effort representing a particular segment of society. Examples include school board members, environmental organizations, elected officials and chamber of commerce representatives.

Communicating with Internal & External Stakeholders

Marketing communication can be divided into two flows directed at different target audiences. This necessitates different yet compatible communication strategies. A company cannot be telling a customer one story and stockholders another.

A chart that shows marketing communication based on external flow (customers, resellers, companies, and publics) and internal flow (employees, stockholders, and functions).

Marketing Communication: Marketing communication uses different yet compatible communication strategies based on the target audience.

Planning

Preparing a communication plan involves five key points:

Defining the audience: List the key stakeholders needing information about the course of events in the project.

Defining the requirements: Answer the question, “What do key stakeholders want to know?” This question should be answered according to the audience’s level of knowledge.

Building a communications schedule: A flexible yet consistent schedule should be prepared and verified by the audience.

Defining the medium of communication: Presenting the information smoothly is important, especially for stakeholders. While they are not involved in the project, they need to know what is going on. An appropriate medium should be selected to ensure the information is delivered successfully.

Preparing the content: The content should include the purpose company, the steps involved in meeting company goals, and the roles and responsibilities of team members.

Tools & Techniques

Communication can be in different forms including:

  • Direct mail or online informational output
  • To management in the form of e-mail or discussion forums
  • To stakeholders in form of advertisement or public relations

The key to building a strong stakeholder relationship is communicating with all members of the company. Stakeholders should have a clear idea of a company’s strategy. After any stakeholder discussions, it is important to create a written report of what was discussed. The report can have information on various projects, goals or new initiatives. The report should be detailed yet concise:

  1. It should show the structure and analysis of the budget.
  2. Profit/loss analysis and direction of the company should be summarized.
  3. The knowledge of all these steps are important for stakeholders to understand their involvement in the process.

The Dynamic Environment