Stakeholder relations management achieves best outcomes

Stakeholder relations management achieves best outcomes

Effective stakeholder relations management creates best outcomes in resolving issues facing organizations. By using their influence, stakeholders hold the key to the business and social environment in which your organization operates and therefore its subsequent financial and operating performance. Thus the effective management of stakeholder relations should be an essential focus of organizational activity.

Stakeholders are the individuals, groups of individuals or organizations that affect and/or could be affected by an organization’s activities, products or services. An organization may have many stakeholders, each with particular attributes and often with diverse and conflicting interests and concerns. They have a stake in a specific issue – something at risk, and therefore something to gain or lose as a result of corporate activity.

And don’t call it stakeholder management! We can’t actually manage stakeholders. That term is quite misleading. We can only manage the relationship with them. In this way it’s like reputation – its success is based on what others think of us, ie our relationship with them, not how we can manage them!

Stakeholder relations management is a key skill

The aim of stakeholder relations management is to influence stakeholder attitudes, decisions, and actions for mutual benefit. Stakeholders need to gain from the relationship or they may not be sufficiently motivated to cooperate. A skillful approach is required to balance as much as possible the interests of all parties involved. Thorough planning will build you the balance you are seeking.

The aim is to achieve mutual benefits

The benefits of using a stakeholder-based approach are:

  • You can use the viewpoints of the main stakeholders to help shape your projects at an early stage. This makes it more likely they will support you, and their input can also improve the quality of your project.
  • Gaining support from powerful stakeholders for your work can help convince senior management to allocate more resources to you. This makes it more likely your projects will be successful.
  • By communicating with stakeholders early and often, you can ensure they know what you are doing and fully understand the benefits of your project. This means they can support you actively when necessary.
  • You can anticipate what stakeholders’ reaction to your project is likely to be, and then you can build into your plan the actions that will win their support.

Steps in effective stakeholder engagement

There are 4 broad steps in the stakeholder engagement process:

  1. Plan
  2. Prepare
  3. Implement
  4. Act, review, and improve.

In this article we look at the first step of planning a stakeholder relations management project, in which stakeholders are identified and prioritized:

1. Identify your stakeholders

List the people, groups or organizations who are affected by your project, activity, product or service, who have influence or power over the relevant matter, or have an interest in its successful or unsuccessful outcome. The extent of the engagement with stakeholders may be influenced by their attributes such as their:

  • Dependence – Groups or individuals who are directly or indirectly dependent on the organization’s activities, products or services and associated performance, or on whom the organization depends on to be able to operate.
  • Responsibility – Groups or individuals to whom the organization may have current or potential legal, commercial, operational or ethical/moral responsibilities.
  • Tension – Groups or individuals who need immediate attention from the organization relating to financial, wider economic, social or environmental issues.
  • Influence – Groups or individuals who can have an impact on the organization’s or a stakeholder’s strategic or operational decision-making.
  • Perspectives – Groups or individuals whose different views can lead to a new understanding of the situation and the identification of opportunities for action that may not otherwise occur.

Stakeholders may also include those who, through regulation, custom, culture or reputation, can legitimately claim to represent any of these interests as well as potential future generations and the environment.

An organization must also be aware of illegitimate stakeholders such as people who may falsely claim to represent a stakeholder group, and illegal actors who can also impact the organization.

An initial identification of stakeholders may be based on external sources, such as surveys and external feedback, as well as internal sources, such as people with knowledge of the organization and issues related to the stakeholder engagement. As engagement progresses, it may be appropriate to revise stakeholder identification based on stakeholder input.

More specifically

Stakeholders can be assessed systematically according to criteria such as influence, impact and alignment. For example, these questions can be instrumental in assessing their relevance:

  • To what extent will your strategy affect each group, positively or negatively?
  • How far does the strategy align with their existing beliefs about your organization’s values and purpose?
  • How far do they share your organization’s values and purpose in this area?
  • How robust is the existing relationship with them?
  • What information do they need from you?
  • How do they want to receive it?
  • Who influences their opinions about this issue, and who influences their opinions of you? Are some of these secondary sources therefore potential stakeholders as well?
  • What is their potential to influence the business directly or indirectly (via other stakeholders), positively or negatively?
  • If they are not likely to be positive, what will get their support?
  • If you can’t get their support, how will you manage their opposition?
  • How likely will actions towards one stakeholder group influence the attitudes of other stakeholder groups?
  • What are the consequences of this?

A very good way of finding the answers to these questions is to talk to your stakeholders directly – tactfully of course! They can be internal or external. Research reveals the most important stakeholder group. You can help the thoughts of stakeholders by asking them questions through a process of facilitation. People are often quite open about their views, and so asking them is often the first step in building a successful relationship. Seeking their advice is another good way to strengthen your relationship and add value from their input.

Prioritize your stakeholders

You may now have a long list of people and organizations that are affected by your work. Some of these may have the power either to block or advance your activities. Some may be interested in what you are doing; others may not care. Having identified your main stakeholders, you need to decide which of them are the most important. With limited resources, you should only deal actively with the most important ones.

Stakeholders can be prioritized numerically in a matrix showing a weighting of their importance, for instance out of a score of 10, against each of the most important factors relevant to a particular issue, also weighted out of 10, or a set of factors most important to the organization overall. These are discussed in my article, “How to calculate the importance of your stakeholders.”

Planning of a stakeholder relations strategy can be complex. Such strategy is usually a component of an annual communication plan. My ebook on “Annual Communication Plans: How to get the results you want!” offers latest thinking and easily understandable steps to achieve your best outcomes.

Photo by Christina @

Kim Harrison

Kim J. Harrison has authored, edited, coordinated, produced and published the material in the articles and ebooks on this website. He brings his experience in professional communication and business management to provide helpful insights to readers around the world. As he has progressed through his wide-ranging career, his roles have included corporate affairs management; PR consulting; authoring many articles, books and ebooks; running a university PR course; and business management. Kim has received several international media relations awards and a website award. He has been quoted in The New York Times and various other news media, and has held elected positions with his State and National PR Institutes.

Content Authenticity Statement. AI is not knowingly used in the writing or editing of any content, including images, in these newsletters, articles or ebooks. If AI-produced content is contained in any published form in future, this will be reported to readers.

Leave a comment

Please read and respect our Comments Policy before engaging.


Further Reading

Communication Campaign Plans
Communication Campaign Plans

Related Articles


No products in the cart

Send this to a friend