- Utilizing the stakeholder framework
- Stakeholder interests vs. societal interests


[SLIDE 1]

For a corporation that emphasizes business ethics and social responsibility and wishes to develop effective corporate governance, there are six steps to managing the process utilizing the stakeholder framework.

The first step in utilizing the stakeholder framework is to identify an organization's values, norms, mission, and behavior that affect social responsibility. The organization's social responsibility program must align with its corporate culture.

The second step is to identify an organization's stakeholder groups. Stakeholders can withhold needed resources if their needs, wants, and desires are not met. Because of this, it is vitally important for an organization to consider stakeholders in all business decisions.

The third step is to identify stakeholder issues. The company must find out what its stakeholders' main concerns are. The company can then work to address those concerns through business decisions and by formulating new strategies.


[SLIDE 2]

The fourth step in utilizing the stakeholder framework is to assess an organization's commitment to its stakeholders and its social responsibility. After stakeholders and their interests and concerns are identified, the organization must then evaluate current practices and select social responsibility initiatives that will have the most impact on stakeholders' concerns.

The fifth step is to identify resources and determine urgency. The organization must identify the specific resources needed to address stakeholders' issues and how urgent each issue is.

The sixth and last step in utilizing the stakeholder framework is to obtain feedback from stakeholders on how well the organization is doing in addressing their wants, needs, and desires. Feedback can be obtained in a variety of different ways including surveys, focus groups, and observation.


[SLIDE 3]

Balancing stakeholder interests can be challenging. Even when companies utilize a stakeholder framework, information and good judgment is still necessary. Conflicts can arise when businesses try to give stakeholders what they want but stakeholder desires conflict with broader societal interests.

For example, the demand for rechargeable lithium batteries continues to grow with increasingly more auto companies offering battery-powered vehicles. Lithium mining, however, can carry a high environmental cost depending on the processes used in extraction. Businesses must balance stakeholders' desires for electric vehicles with obtaining lithium batteries that were made with lithium that was sourced from a company that uses environmentally friendly extraction processes.