Table of Contents

Key Concept of Stakeholders Engagement

The term ‘stakeholder’ was promoted by R. Edward Freeman in his seminal 1984 work, Strategic Management: A Stakeholder Approach
Stakeholder engagement is the act of connecting with the stakeholders.
Stakeholder engagement is a process which an organization uses to listen, dialogue and respond to its stakeholders.
Stakeholder engagement refers to the systematic effort by an organization to involve stakeholders in its decision-making processes.
As we know that stakeholder is “any group or individual who can affect or is affected by the achievement of the organization’s objectives”, stakeholder engagement includes the level of engagement of those individual group or individuals in an organization.
Stakeholder’s prerequisites, desires, recognitions, individual motivation and concerns will influence the task, shape the achievement, and affect the results.

Types of Stakeholders

1. Internal stakeholders: Internal stakeholders are those individuals or groups which operate within the organization. It includes employees, managers and executives who are working in an organization

2. External stakeholders: External stakeholders can be further divided into:

2.1 Primary external stakeholder: It includes those people who don’t work directly in an organization but have direct economic or contractual link with the organization. They may be customers, creditors, suppliers and investors. These primary external stakeholders are considered as the ‘life’ of an organization as they are linked to its survival.

2.2 Secondary external stakeholders: It includes those who can influence or are influenced by the organization. It comprises of government bodies, local communities, interest groups, media houses etc.

Example: When a college decides to build a new research facility, its stakeholders include students and faculty (internal), the construction company and funding bodies (primary external), and the local neighborhood association, city planning department, and local media (secondary external). A purely financial approach might focus only on the funders, but a stakeholder approach recognizes that the project’s success depends on gaining the support, or at least mitigating the opposition, of the local community and city regulators.

Importance of Stakeholders Engagement

Enhanced risk management
Improved decision making
Builds trust and legitimacy
Minimized risks and conflicts within the organization
Innovative and contextual ideas
Social license to operate any action
Increased sustainability of the project and organizational actions
Compliance to legal and ethical obligations
Improved employee morale and satisfaction
Increased retention of employees and stakeholders

Stakeholders Mapping

Stakeholders mapping classifies the stakeholders on the basis of their power and interest in the engagement process. Tools like Power-Interest matrix is basically used to map the stakeholders.

Power	Interest	Engagement Strategy
High	High	Collaborate
High	Low	Keep Satisfied
Low	High	Keep Informed
Low	Low	Monitor

Spectrum/Process of Stakeholders Engagement

Stakeholders engagement is not a single activity but requires a series of spectrum for successful engagement. This spectrum is known as ‘Ladder of Citizen Participation’ where the basic level starts from information sharing to full empowerment.

The ladder of stakeholder engagement includes following steps:

1. Inform: It includes one-way flow of information from the organization to the stakeholder. It is a strategy of ‘Keeping Informed’

2. Consult: It comprises of two-way flow of information between the organization and stakeholders where organization asks for feedback with the stakeholders regarding its actions. Here, consultation is sought from the stakeholders but final decision making is done by the organization itself. It is a strategy of ‘Keeping satisfied’

3. Involve/collaborate: It includes working directly with the stakeholders to ensure that their concerns are properly understood and addressed. It is a strategy of ‘Managing closely’

4. Empower: Empowering is the highest level of engagement where the final decision making is assigned to the stakeholders. It is considered as a true partnership and is more relevant in community-led development projects.

Techniques of Stakeholder Engagement

Workshops
Open dialogue sessions
Focus groups
Surveys and interviews
Community meetings
Online discussions and feedback sharing
Public consultation

Methods of Stakeholder Engagement

The International Association for Public Participation (IAP2) has developed a prominently used spectrum of public participation which can also be used in stakeholder engagement:

Level	Goal	Example Methods
Inform	Provide balanced information	Newsletters, fact sheets, websites
Consult	Obtain feedback	Surveys, public comments
Involve	Work directly with stakeholders	Workshops, focus groups
Collaborate	Partner in decision-making	Advisory committees, co-design
Empower	Stakeholders make decisions	Delegated decisions, referenda

Advantages of Stakeholders Engagement

Increased trust and certainty over the undertaking network
Increased assurance and pace of advancement
A clearer comprehension of outstanding obstruction
More vigorous hazard the executives: “In the event that we don’t do it, or we can’t work”. (for example: Shell in Nigeria or BP in Indonesia)
Increased 360° consciousness of hierarchical conditions.
Sustainability of the actions
Improved market good will
Increased innovation and new ideas
Multiple strategies and focus to increase productivity of an organization

Limitations of Stakeholders Engagement

Uncertainty of result
Likelihood of receptive arranging
Emotional connectedness
Diversion and diversion of assets
Isolated thinking among groups, and division of all levels: singular, gathering, authoritative
Unprofessional and untrustworthy practices