Stakeholder Relationship Management example
- Analyze potential conflicts that may arise among internal and external stakeholders
Conflicts of interest between stakeholders frequently occur in complex organizations. When one talks about stakeholders, they most probably refer to shareholders. Most organizations have, for a significantly long time, had a tradition of regarding the interests of their shareholders as first and foremost (Bourne). That means that they employ various strategies possible to ensure they get things done in their way. However, the recent past has seen significant changes in organizational management, in which some executives perceive the concept of shareholder value management as primitive. According to Bourne (2016), some companies fail because of overemphasizing on the top management over the interests of stakeholders (Bourne). The senior executives of such companies use the chance to pursue their interests, a factor that causes problems for the financial management of the organization.
One of the most significant conflicts of interest that occur in health organizations is the difficulty of deciding on whether to implement ideas that favor the clients or the stakeholders. Sometimes internal stakeholders, particularly the chief executive officers, sometimes may choose to enforce policies that support clients intending to get a positive reputation that may, in one way or another, attract more clients (Korschun). Sometimes such ideas may not effectively promote the interests of external stakeholders, a factor that in most cases, causes conflict. Taking care of the interests of consumers more than those of the stakeholders is advantageous because it takes care of the organization as well (Korschun). They are based on the belief that the aim of the organization is not only to achieve short-term success but the consistency and security of the organization as well.
Internal and external stakeholders may sometimes clash over opinions and interests. That commonly happens when the goals of the manager and other internal stakeholders, for example, become incompatible. The chief executive manager is entrusted with the responsibility of creating ideas that can help the organization achieve its objectives (Bourne). The plans are expected to benefit all the stakeholders in the proportion of their contributions to the organization. For that reason, the manager should always act in ways that are legal, ethical, as fair as possible. Sometimes a stakeholder may approach the chief executive officer with the intent of influencing the decision-making process (Bourne). That is a common problem which the managers of major health organizations deal with regularly in the bid to achieve fairness. Diplomacy is the best strategy for dealing with such challenges because no matter how little the impact of the respective stakeholder may be, they can significantly affect the outcomes of significant projects (Korschun). The fact is that every complex organization must continue operating despite the ideological differences between its stakeholders. However, the process of developing methods of dealing with various problems that arise in the process of achieving organizational goals should be based on ethical tenets, laws, codes of conduct, rules, and policies that govern the organization.
- Evaluate the role of team leadership in preventing and/or managing conflict at the interpersonal, team, and organizational levels
The manger should employ various team leadership skills to prevent and manage conflicts in the organization. He/she should establish and make known their integrity concerning their role in all essential projects (Goetsch and Davis). When stakeholders understand the manager’s beliefs, they will find ways to act in a way to support the bid to actualize them. Any stakeholder that may want to influence the manager’s judgments or plans of action for a specific project will think twice before proposing anything directed to the achievement of personal interests. That approach may not be an effective deterrent, but it will at least define the executive’s determination in achieving specific goals. Stakeholders who want to present propositions that favor their interests will make an effort to accompany them with reliable reasons (Goetsch and Davis). They should also explain how they expect their proposals to impact the interests of other stakeholders and how they can manage the impacts. That commonly happens with the labor unions who present the interests of the workers to the management. They accompany them with concrete reasons as to why the manager should give them special attention during decision-making processes.
The manager or team leader should make known the significance of their role in particular projects. It prevents unwanted influence from stakeholders beyond the leader’s function (Rahim). A good example is a case in which a stakeholder who is also an investor in a construction company approaches a health organization manager and requests for special consideration in rewarding of a tender. They may present financial rewards if the manager does that (Rahim). Sometimes the manager may be willing to act according to the request, but they may be unable because they are not directly involved in the decision-making process. The manager should make such information clear to all stakeholders to avoid such conflicts. The manager should also apply other strategies to strengthen their integrity (Rahim). They should be prepared to deal with extreme levels of such cases in which the stakeholder may influence them to extend the financial benefits attached to the deal with the people involved in the bidding process. The leader should clarify that such actions are beyond their control.
The manager or team leader should make a written report of any proposals that may cause conflicts. They should have valid reasons showing that the recommendations may influence the bid to achieve organizational goals (Rahim). They should also ensure that all the stakeholders are informed of the report, beginning with the manager’s immediate superior. The manager or organization leader should always remember that their responsibility in a specific project does not end in refusing to comply with the demands of particular stakeholders. Even if the manager accepts to be influenced in one way or another, a significant element of conflicting interests will always exist (Rahim). Sometimes the stakeholder who presented the proposal for a construction company may approach other internal stakeholders and try to influence them in the same manner. The manager or team leader should be aware of that and should, therefore, inform other significant team members in advance about the same. One of the significant parties that may help them in such bids is the head of procurement (Goetsch and Davis). The manager should approach them and advise them to reject the proposal before it reaches the approving committee.
When the manager makes a written report of similar events, they inform all the stakeholders that sometimes such things happen. For that reason, the manager is given a direct role in investigating such cases in case they occur (Andriof and Waddock). When they approach the procurement managers and other vital stakeholders on matters related to stakeholders’ special interest, it acts as a deterrent, since all parties will fear being subjected to legal actions for violating corporate rules (Andriof and Waddock). Since the process of approving proposals involves many people, the manager should ensure they inform all the participants of particular malpractices and their respective consequences. That factor will improve the manager’s reputation and streamline the process of achieving corporate goals.
- Assess the importance of maintaining relationships with stakeholders through organizational change processes
Organizations gain significant benefits from maintaining positive relationships with stakeholders. A stakeholder may be defined as any individual or organization that is interested in one way or another to the organization and its products or services. They include clients, vendors, project managers, co-workers, and senior leadership (Andriof and Waddock). First of all, companies are established to offer services or products to customers. That means the organization cannot function properly without the support of its customers (Andriof and Waddock). Most organizations maintain positive relations with their clients by default for them to remain in operation. For that reason, the topic of customers as stakeholders is approached differently from others.
The relationship described in this section may mean a collection of many things and actions. It goes beyond transactions such as project delivery or sale. One of the most significant elements of a positive relationship between an organization and its shareholders is a trust (Rahim). A trustworthy organization tries to act according to what it promises its stakeholders. To make the relationship complete, the stakeholder must also act according to what they promise. Communication is another significant element of a positive relationship. The organization should always let the stakeholders know about significant events related to the organization. It should keep them up to date on essential matters (Goetsch and Davis). The stakeholders should also inform the organization of the various external factors that may affect the operations of the organization in one way or another. Understanding is also a factor to consider when developing positive relationships between the organization and its stakeholders. That means that the organization and its stakeholders should always approach challenges with a significant sense of understanding (Rahim). When something goes wrong, the parties should always look for positive factors that may have made it so. They should avoid perceiving all the mistakes as a sign of incompetence. Such a relationship encourages the organization to inform its stakeholders about its challenges without them assuming the worst.
Some of the significant benefits of maintaining positive relationships with stakeholders include the ability to overcome unexpected challenges. Unexpected events are so common in relatively complex organizations. They occur in every significant initiative and projects (Goetsch and Davis). When the organization has developed a positive relationship with its stakeholders, it can confidently inform them about it. Sponsors who relate well with the organization will hardly create the feeling that the management of the organization is incompetent. They are confident enough that the happenings are ordinary events for any project and that there is hope for a better future. (Bridoux and Stoelhorst) For example, an organization employs a contractor to replace some doors on a house. In the process of repairing, the contractor informs the manager that there is some rot in the casing, a factor that will cost the organization some more money. If the relationship between the management and the contractor is not right, the manager may start wondering why the contractor did not plan for it early enough (Bridoux and Stoelhorst). They may have questions about why the contractor, who has done such projects before, did not tell the management that they could incur more cost. If the two parties had had a positive relationship, the manager would have told the contractor to do whatever is right and possible and say to the management how much it would cost. That could happen if the same contractor had offered similar services and did it to the expectations of the organization (Wagner et al.). For the first case, the client perceives the late announcement as a sign of incompetence. Still, for the second, the client already knows that the contractor is equal to the task and any adverse event that happens in the process is just a challenge that may occur in any other complex project.
A good relationship between the organization and its stakeholders encourages flexibility in meeting the project goals. That is based on the fact that rarely does one get everything they want. In an organization made of many people with varying beliefs and interests, it is difficult to achieve something that everyone agrees with (Wagner et al.). Sometimes the process of achieving specific goals involves several compromises and conversations. Such factors are encouraged by things, including over-expectations or shooting too low by particular stakeholders (Wagner et al.). When the relationship between the two parties is good enough, they can have honest discussions and come up with better approaches for achieving specific goals.
- Recommend strategies for healthcare organizations to prevent and manage conflict among internal and external stakeholders
Sometimes healthcare organizations face significant conflicts between their internal and external stakeholders. The problems require strategies that leave the parties involved happy and maintain a positive relationship between them (Rahim). They may disagree on factors such as the contents of requirements or the appropriate solution to specific challenges. Whatever the reason may be, the organization is always in a state of instability that requires immediate and proper action for the issue at hand. The best way to leave the parties involved happy is by using “soft skills” of conflict resolution, such as diplomacy and negotiation (Rahim). Such approaches call for goo listening skills because each party believes they have a valid opinion.
One of the most appropriate strategies when solving conflicts between stakeholders is by just keeping quiet. Stakeholders in a dispute may sometimes feel like convincing the management that they are right at least to some extent (Mori and Mersland). That factor requires one to listen carefully and show the stakeholders that one has understood every point they try to put across. One can show them that they “get it” by reflecting what the stakeholder says back to them. A stakeholder who understands that you have been listening to what they were saying becomes calmer and more willing to participate in the conflict resolution process. The person leading the conflict resolution process should then provide a forum for resolution (Rahim). They can call for a meeting and allow every person involved to air their grievances in a respectful manner. The organization representative should act as a facilitator and make sure that everyone gets a chance to articulate their issues. They should ensure that the discussion is as productive as possible and that every idea is directed toward a resolution. For every point made, the facilitator should look for ways to achieve a win-win situation. That is looking for solutions that provide at least some percentage of what each stakeholder is looking for (Rahim). Even though it is difficult to achieve at a solution that satisfies everyone, the facilitator should try the best they can to meet the needs of as many stakeholders as possible. The facilitator can advocate for solutions, but they should not choose sides. One can air their ideas then inform the stakeholders that they still hold power to make the final decision regarding the issue. If the problem persists, the facilitator should seek help from people who are more skilled in conflict resolution.
References
Andriof, J., & Waddock, S. (2017). Unfolding stakeholder engagement. In Unfolding stakeholder thinking (pp. 19-42). Routledge.
Bourne, L. (2016). Stakeholder relationship management: a maturity model for organizational implementation. Routledge.
Bridoux, F., & Stoelhorst, J. W. (2014). Microfoundations for stakeholder theory: Managing stakeholders with heterogeneous motives. Strategic management journal, 35(1), 107-125.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: Pearson.
Korschun, D. (2015). Boundary-spanning employees and relationships with external stakeholders: A social identity approach. Academy of Management Review, 40(4), 611-629.
Mori, N., & Mersland, R. (2014). Boards in microfinance institutions: how do stakeholders matter?. Journal of Management & Governance, 18(1), 285-313.
Rahim, M. A. (2017). Managing conflict in organizations. Routledge.
Wagner Mainardes, E., Alves, H., & Raposo, M. (2011). Stakeholder theory: issues to resolve. Management decision, 49(2), 226-252.