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T o u r i s m
M a n a g e m e n t
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N o v e m b e r - D e c e m b e r 2 0 0 9 , C a m b o d i a
Stakeholder Analysis
Trevor Sofield
Professor of Tourism
University of Tasmania
Australia.
Consultant : ITC
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Definition of Stakeholders
“Any group or individual who can affect or is affected by
the achievement of an organisation’s objectives.” (Freeman, R.E. (1984) Strategic Management: A Stakeholder Approach,
Boston: Pitman.)
Developers, businesses, neighbours, communities,government ministries, non-governmental agencies,
etc and etc.
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Stakeholder Analysis
Narrow definitions of who
is a stakeholder look atdirect relevance to the
activity’s core economic
interest, whereas -
broad definitions are based
on the premise that
companies and businesses
can be affected by, or can
affect almost anyone.
• Mitchell, R.K., Agle, B.R. and Wood, D.J.(1997) “Toward a theory of stakeholder
identification and salience: Defining the
principle of who and what really counts,”
Academy of Management Review 22 (4),
853-886.
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Stakeholder Analysis
Is now a widely accepted part of the code of corporate ethics
• The concept hinges upon thenotion of fairness
“Stakeholder management requires, as its key attribute,
simultaneous attention to thelegitimate interests of all appropriate stakeholders,Minorities included, both inthe establishment of organizational structures and general policy and case-by-case decision making.”
(Donaldson, T. and Preston, L.E. (1995)“The Stakeholder Theory of theCorporation: Concepts, Evidence andImplications,” Academy of Management
Review 20 (1), 65-91).
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T o u r i s m
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T o u r i s m
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Stakeholder Analysis
outline their mandate
A diagnostic tool to -
Stakeholder analysis is a continuous process
identify key stakeholders
clarify their interests
comprehend their perception of the problem specify their resources (supportive and destructive)
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Stakeholder Analysis
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Levels of importance of stakeholders
• Primary stakeholder : one who without continuing participation thebusiness cannot survive or the development/intervention succeed.
• Secondary stakeholders: ones who influence, affect or are
influenced by or affected by the business/development initiative but who
are not engaged in transactions with the business/development initiative
and are not essential for its survival • i.e. Those that affect vs those that are affected by.
• Act ive versus passive stakeholders (eg farmers versus absentee
landlord)
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Stakeholder Analysis
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Helpful stakeholders to enlist: –
• ADVOCATES – Idea creators, designers• CHAMPIONS - to lead the change
• SUPPORTERS - “critical mass”
•DECISION MAKERS (to approve theactivation of critical change enablers – policies, funds, people)
• OPINION LEADERS - decision-swayers, special interest groups that sustain people’sawareness of the need for change (lobbygroups, NGOs, media)
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Functions of Stakeholder Theory (Donaldson and Preston (1994); Jones (1995)
Stakeholder theory can also deal with conflicts andtrade-offs. These tend to increase when development
and population growth occurs, which makes resources
more scarce and therefore more highly valued.
• This links into sustainable tourism which recognisesthat multiple interests must be addressed and that
balances or tradeoffs must occur.
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Problems with the Concept of Stakeholder Theory
• Where does tourism begin and end?
• Involving every stakeholder in discussionsand negotiations can be an expensive task.
• The broad definition:-
“any group or individual who can affect or is affected by the achievement of anorganisations objectives” –
presents problems as boundariesbecome imprecise: a NGO in one countrymay claim stakeholder status in another country
• It doesn’t always address power relations
• Subjectivity of deciding who is a stakeholder
• Bringing stakeholders to the same table mayresult in more not less conflict.
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Benefits of Stakeholder Analysis
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1. Can improve quality, efficacy and evaluation of policies and
projects
2. Can improve assessment of social and political impacts of
policies and projects
3. Allows for differences in opinions to be identified
4. Doesn’t differentiate between those who own versus those with
interest in tourism so does not automatically exclude non-owners
5. Makes managers responsible for more than profit maximisation
(the triple bottom line)
6. Its relevance for identifying multiple objectives and concerns (e.g
between economic, social and environmental viewpoints andbetween different interests of different stakeholders)
7. A way in which the need and interests of people who are under-
represented politically and economically can be highlighted.
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A Model for Stakeholder Analysis(Hardy 2001)
any boundary
(indicative diagram only. There could be
many more arrows representing many more relationships)
N=x
GROUP 2
GROUP 3
GROUP 4
GROUP 1
N=x N=x
N=x
A general model for
Stakeholder Analysis,
applicable at any scale.
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Mul tiple arrows represent
interactions, reactions and
feedback between
stakeholder groups.
‘N’ represents the number
of dif ferent stakeholders
that may exist within any
stakeholder group.
The outer circle
represents any boundary -
regional, local or state.
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A Model for Stakeholder Analysis(Hardy 2001)
What do we mean when we say a stakeholder group is mixed?
N=8
GROUP 1; Accommodation
Sector
GROUP 3
COMMUNITY
N=5
Suppose Group 3 represents the community sector, there may
be farmers, landless peasants, smal l stal lholders, and home-
stay lodge owners. As with other groups of stakeholders,
within this group there wil l be dif ferent interests and
objectives. Note that the home stay lodge owners can be
located in two different groups, and their interests within the
two groups may not be identical!
Suppose Group 1 represents the accommodation sector, there
may be two 4-5 star hotels, an eco-lodge, a backpacker lodge,
an airpor t transit motel, a tented safar i camp, and 2
community home-stay lodges (N=8).
Some of their objectives and interests wil l be VERY different and they may exper ience greater diff icul ty agreeing among
one another than with representatives from other groups of
stakeholders.
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Strategic Analysis of Stakeholders
Assess:
Interests, aspirations (share the vision?)
Problem perception (each one sees different aspects of
the same problem –
which aspect?)Resources (capable and motivated to participate and
contribute?)
Roles. Ways to enlist participation in the project (How to
involve them in the project so that envisionedchanges can happen?)
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Summary
• Stakeholder analysis assists understanding of tourism as a
system encompassing different interests such as
environmental, financial, community and touristssatisfaction interests.
• It is therefore an appropriate tourism planning method to
identify multiple objectives as it presumes no one stake
predominates.• However it raises the issue of: Where do stakeholders start
and end?
• Stakeholder management is a methodology within which
sustainable tourism development can be delivered.• It is an essential component of Value Chain Analysis
where stakeholders and their interests must be identified,
and partnerships between them forged to maximize
poverty alleviation.
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Stakeholder Table: Public Transport example
Stakeholder Interests Problem
Perception
Resources Role /
Mandate
Passengers Safe,
reliable, andreasonable
public
transport
Many delays
Frequent busbreakdowns
Frequent
accidents
Impolite drivers
Dangerous
driving
Willingness
to pay for improved
services
Not
applicable
Private Car
owners
No traffic
jams and
safe roads
Too many
accidents
caused by
buses
May consider
use of public
transport if
reliable and
safe
Not
applicable
Mayor of Port
Rarorialofa
Reliable,low-cost
public
transport
system
Citizencomplaints
about public
transport system
Increased traffic
jams
Veto power in Council
Commands
popular
support
To manageCity of Port
Rarorialofa
Bicycle Power
For the Future
Reducing pollution
for healthy livingCar emissions,
obese people 5,000 members
To lobby Mayor
and changepublic opinion
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Groups Interests Problem
Perception
Resources Role /
Mandate
1.
2.
3.
4.
EXERCISE
Identify 4 stakeholders involved in the
Kokoda Track tour
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