Community stakeholder analysis

August 01, 1995

According to stakeholder theory of management, a company must take into account the broad range of groups who can affect, or are affected by, the achievement of its purpose. Here Gillian Garrett, until recently community relations manager at East Midlands Electricity, sets out a four stage process to review CCI strategy.

p>Its most recent advocate is the Royal Society of Arts through the Tomorrow’s Company report issued in June, which believes that “only be giving due weight to the interests of all key stakeholders can shareholders’ continuing value be assured”.

It is common practice to put these key stakeholders into five groupings: staff, investors, customers, suppliers and the community.

The renewed interest in stakeholder management offers the CCI practitioner a real opportunity to put theory into practice and truly integrate his or her company’s community involvement, making it a logical, and essential, part of the business process.

Of course, there are a wide range of groups within the term ‘the community’, all of which would benefit from corporate involvement. A community stakeholder analysis will help to identify those parts of the community which are key to your company.

In carrying out such an analysis, you will be addressing four questions:

Who are the company’s specific community stakeholders?

What effects does the company have on them in political, economic and social terms?

How do these stakeholders perceive these effects?

What effects do they have on the company?

These questions have to be considered in the context of the business strategy, so consult your company’s business plan and list the objectives it has set itself. These are not always overtly called ‘objectives’; they may be critical success factors, values or beliefs, but you should be able to compile some simple statements which describe what the company is aiming to do; for example, ‘to provide excellence in customer service’ or ‘to achieve sustained cost reduction’.

Business plans are the firm’s strategic response to its operating environment, so by framing your community stakeholder analysis around the business plan, your resulting CCI activity will truly be in balance with the company’s business interests.

You will need to define the geographical range of your community stakeholder in general ie if your company has a national presence, is it everyone in the UK? Or is your firm a manufacturer, so your focus is on those living around the specific sites of your factories? Or are you regionally-based?

To define your key community constituents, first ask yourself: what if we didn’t account for community interests when trying to meet a business objective, and which would be the affected groups? For example, if your company is a utility aiming to differentiate itself from its competitors by providing excellence in customer service, what would happen if it failed to take into account customers with special needs?

If the company policy was to disconnect everyone who failed to pay their bill, affected groups would include people over pensionable age and those with disabilities. These people’s interests are represented by a number of community agencies, such as Age Concern, RNIB and RNID, whose condemnation for such a practice would probably create significant negative media coverage for your company and attract the interest of the industry regulator.

On the other hand, if you have a good relationship with these agencies, you can use their expertise to inform and improve your company’s customer service practices, resulting in a higher level of excellence.

By repeating these steps for each strand of the business strategy, you will arrive at a list of the key community constituents and their representative agencies, on which you can target your CCI activity. You will also have identified some topics of mutual interest which can shape your CCI programme and in which you can involve other parts of the business.

Gillian Garrett now runs The Garrett Consultancy and recently published ‘The CCI Toolkit: management techniques for effective corporate community involvement’. Contact 01664 822968

Corporate Citizenship Briefing, issue no: 23 – August, 1995