Reputation Risk from a Stakeholder Management Perspective
Stakeholders face many different risks that arise from any business activity. The stakeholder management approach is the process by which is organised, monitored and improved relationships with business stakeholders. It involves systematically identifying stakeholders; analysing their needs, expectations; planning and implementing various tasks to engage with them. Most definitions of stakeholder management tend to focus around the idea of how could stakeholders be managed in order to get them to do what is equired. The emphasis is placed on creating a stakeholder management plan that maps the level of interest and influence of stakeholders and list various levels of engagement for the different groups. This paper applies a case study methodology presenting the Wal-Mart case and the Malden Mills case to reflect the implications of stakeholder management in companies. The findings indicate the positive but also the negative implications which result when various stakeholders are neglected, and, conversely, the benefits when stakeholders are effectively engaged in corporate activities. It concludes that effective stakeholder management contributes to risk management and reputation management, as well as, to corporate social responsibility.
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