How stakeholders influence football clubs' strategy?
par Eric Bailly
Staffordshire University (UK) - M.Sc. in European Management Strategy 2003
According to Polonsky's model (1995) above, stakeholders not only have a stake in the organizational behaviour but they are also linked to each other. To make the figure easiest to read, all the links between stakeholders are not shown, but they are implied. Any group may have connections with each other group. It is based on Freeman (1984) stakeholders' selection, as it keeps the same twelve important groups.
According to Polonsky, there is a four-step-management-process to integrate the stakeholders in the strategy developing process:
1 Identify the relevant stakeholder groups.
2 Determine the stake and importance of each stakeholder group.
1 Determine how effectively the «needs» or «expectations» of each group is being met.
2 Modify corporate policies and priorities to take into consideration stakeholder interests.
Stage 1: stakeholder identification The organization has to draw a stakeholder map (Mendelow and Archer's models will be useful for this task!). If you analyse stakeholders for a specific issue, then the map may differ from the one you drawn just before. Maps also changes with stakeholders repositioning and depends on stakeholders' relationship between them as well. To determine which stakeholder groups are relevant, the author suggests the organization to consider how they relate to the strategy implementation. If the group may influence the firm's strategy, it is a relevant one. The organization has to be sure that its analysis considers the key factors to its strategy.
Stage 2: determining the stakes Managers must determine each stockholder's stake; this is a very difficult task. These groups have different effects on different part of the organization, and do not perceive the organization's behaviour the same way. Sometimes interactions between stakeholders may be more important than their direct effect on the firm. An accurate determination of stakes is an essential step of the strategy development project. According to Freeman (1984), each stakeholder can potentially have a positive or negative influence on the organization, that's why it is very important for the firm to forecast the stakeholders' expectations evolution. There is no clear method to determine these stakes but direct communication with those groups allows the organization to have an unbiased feedback about how it is perceived. Unfortunately, organizations are sometimes in unfavourable terms with some stakeholders. A good understanding of the stakes and potential of each stakeholder's group may have on the firm a valuable effect on the development of an optimal strategy.
Stage 3: Determine how well expectations are met Once the stakeholders' expectations are determined (cf. stage 2), the organization has to know if these hopes are met with the current strategy. It is also a difficult task because some objective can be concrete and measurable, but it is easy to analyse if an effort has been put in place to improve this kind of issue. But some stakeholders' groups have subjective aims, so the organization must understand them as clearly as possible. If there is no good understanding about an issue, both stakeholders and organization will view each other as an adversary. Usually, managers realize the gap between its strategy and stakeholders' expectations after a clash, a strike... Polonsky (1995) suggests that the organization continually conducts social audits; without it, it would be difficult to
How stakeholders influence football clubs' strategy ? September 2003
minimize gaps. Moreover, these audits will be used as a monitoring tool in the time, because a satisfied unimportant stakeholder of today may be an unsatisfied and important one in the future. This cannot be determined without those social audits. Direct communication is, again, the most effective way to socialize stakeholders into the organization. According to Polonsky (1995), the lack of communication often distorts the manager's interpretations of the stakeholders' expectations as well as the stakeholders' understanding of organizational behaviour.
Stage 4: Adjusting the organization's strategy After managers determined how well stakeholders' expectations are being met by the current strategy, they have to adapt and reformulate their corporate strategy (most of times, strategy is not adapted enough to stakeholders). This strategy has to integrate competing expectations with organizational priorities. So, it is improbable that the new strategy meets all expectations at once. In these cases, Polonsky (1995) suggests that managers develop programs or contingency plans for potential problems that may arise in the future. The problem for managers is now to decide which stakeholders' expectations will and will not be met. The information collected in the precedent stages is the best tool to make this difficult but necessary decision. An alternative solution is that the organization and stakeholders' groups interaction may change groups' expectations, but it is unlikely that all groups change their objectives and agree with the new strategy. What usually happens is that the firm will modify its strategy and the stakeholders modify their expectations, so that the gap between performance and expectations is reduced. Gaps still remain and it is the managers' role to reduce the potential for negative stakeholders' expectations and to increase the probability of positive reactions. The key method is, again, to do this through socialization of stakeholders into the organization so that they will have a better understand of the organizational objectives and therefore they should be less problematic.