Identifying and Managing Key Stakeholders with Case Studies: Practical Lessons for SMEs

Discover essential strategies for SMEs to identify and manage key stakeholders through practical lessons and case studies. Enhance your business operations and stakeholder relationships with proven insights and real-world examples.

Elevate your business strategy with effective stakeholder management, a critical factor in navigating today's dynamic business landscape. Explore a compelling case study of a multinational corporation introducing a sustainable product line, emphasising the identification and understanding of diverse stakeholder interests.

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Essential Stakeholder Management Case Studies for SMEs

Understanding and effectively engaging stakeholders can be the difference between success and stagnation for SMEs. This collection of case studies delves into real-world scenarios, highlighting the strategies and approaches that have empowered SMEs to navigate complex stakeholder dynamics with finesse. From nurturing relationships with investors and clients to fostering community engagement and managing internal stakeholders, each case study offers actionable insights and proven methodologies. Explore how SMEs across diverse industries have leveraged stakeholder management as a cornerstone of their growth strategies, driving innovation, building trust, and enhancing their overall resilience in an ever-evolving business environment. Equip yourself with the knowledge and strategies needed to thrive as an SME in today's interconnected world by delving into these illuminating stakeholder management case studies.

Navigating Stakeholder Relationships: Best Practices from Movie Case Studies

Stakeholder management is a critical aspect for businesses to navigate successfully in today's dynamic and interconnected environment. Consider a case study of a multinational corporation introducing a new sustainable product line. In this scenario, stakeholders include customers, suppliers, employees, investors, regulatory bodies, and environmental groups. The business must first identify and understand the diverse interests and expectations of these stakeholders. For customers, the focus may be on the eco-friendliness and quality of the products, while investors may prioritise financial returns and long-term sustainability. Effective communication strategies tailored to each stakeholder group, regular updates, and soliciting feedback are crucial to building trust and addressing concerns. Proactive engagement with regulatory bodies ensures compliance, while collaboration with environmental groups can enhance the company's reputation.
Furthermore, businesses should implement a robust stakeholder engagement plan that goes beyond mere compliance. This involves ongoing dialogue, incorporating stakeholder feedback into decision-making processes, and demonstrating a commitment to responsible business practices. In the case study, the company might establish a sustainability advisory board with representatives from different stakeholder groups, fostering a collaborative approach to decision-making. Transparent reporting on environmental and social impact metrics would also be essential to demonstrate accountability. By adopting a comprehensive stakeholder management strategy, businesses can create a positive impact on society, enhance their reputation, and build long-term resilience in an increasingly complex and interconnected business landscape.

Written by: Malose Makgeta

MBA with 20+ years experience in SME development and funding. LinkedIn Profile

Essential Tips for Successful Stakeholder Management from Movies: The Founder (McDonald's), War Dogs and Moneyball

The Founder (McDonald's): The success of McDonald's can be attributed to the effective application of stakeholder management principles by the McDonald brothers, Richard and Maurice, and later by Ray Kroc. The brothers focused on understanding and meeting the needs of key stakeholders, particularly customers, by introducing a revolutionary fast-food system that emphasised speed, consistency, and affordability. This customer-centric approach built a loyal customer base. When Ray Kroc took over the franchise system, he extended the stakeholder management philosophy by recognising the importance of franchisees as crucial stakeholders. Kroc implemented standardised processes to ensure consistency across all franchises, fostering a collaborative relationship with franchise owners. This approach not only enhanced the brand's reputation but also created a mutually beneficial ecosystem, demonstrating how strategic stakeholder management is integral to the sustained success and global expansion of the McDonald's brand.
War Dogs (AEY): AEY and Efraim's stakeholder management in the movie "War Dogs" is characterised by a complex interplay of relationships and ethical considerations. As arms dealers, their primary stakeholders include the U.S. government, military personnel, and international clients. The duo's approach involves navigating a fine line between fulfilling contractual obligations, often through questionable means, and managing the expectations and demands of their clients. This challenges their relationships with both suppliers and end-users, with implications for the safety and effectiveness of the supplied weapons. Additionally, the ethical implications of their actions extend to personal relationships, as trust and loyalty between David and Efraim are strained by the ethical dilemmas inherent in the arms trade. The film explores the consequences of their stakeholder management choices, highlighting the ethical complexities and moral compromises that arise in the pursuit of financial gain within this controversial industry.
Moneyball (Oakland A's): Beane strategically communicated and collaborated with these stakeholders, challenging conventional norms and demonstrating a commitment to a data-driven approach. By aligning the team's strategy with the ownership's financial constraints and gaining buy-in from the coaching staff, Beane successfully managed internal stakeholders. Simultaneously, by delivering a competitive team on a budget, he engaged fans and generated public interest, showcasing an unconventional but effective approach to stakeholder management that ultimately transformed the Athletics' competitive position in Major League Baseball.

CONTEXT

Stakeholder management is the process of understanding and systematically identifying key stakeholders, analyzing their needs and expectations, and planning and carrying out various tasks to engage them. Entrepreneurs and business managers coordinate interactions with stakeholders and assess the status and quality of their relationships with various stakeholders, including the community in which they operate. This skills programme provides a platform and tools for entrepreneurs and business managers to develop and implement stakeholder management plans.

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Stakeholder management case studies lessons from case studies:

Movie Description

The Founder is one amazing movie and is a must watch for every entrepreneur. It not only gives you life lessons and but also few path breaking business lessons. The Founder is story of Ray Crock. How a 52-year-old sales man turned two brothers (McDonald Brothers) small eatery into the world’s biggest restaurant business. McDonald brothers had invented the speedy system a process to deliver food in seconds but couldn’t develop business beyond their one restaurant. This is Ray Crock comes re-imagines the whole fast food business and created the McDonald Corporation we see today.

Expected Outcomes

The Founder is jam-packed with practical business advice. It pulls back the curtain to reveal the secrets of Ray Krocs transformation of McDonalds into one of the worlds largest fast food restaurants. Entrepreneurs and business owners will discover: “Nothing in this world can take the place of persistence. Talent wont; nothing is more common than unsuccessful men with talent. Genius wont; unrewarded genius is practically a cliché. Education wont; the world is full of educated fools. The purpose of this case study is to provide a practical case study on how to build a business in the manufacturing sector—that is, a business that takes raw materials and adds value to them to produce a product.

Rational

Ray Kroc, a 52-year-old over-the-hill salesman struggling to sell multimixers, turned two brothers innovative fast food eatery, McDonalds, into the worlds largest restaurant business through a combination of ambition, persistence, and ruthlessness. If you are a small business owner looking to learn about scaling, franchising, and brand building, McDonalds is the one business to look to as a reference, as they have done this incredibly well. They are a true American business success story and icon. The story of how McDonalds came to be is told in a new film, The Founder, and we learn the true story of Ray Kroc, the traveling salesman who is credited with making McDonalds what it is today, and its original founders, Richard and Maurice McDonald.

Key Lesson

None

Lesson on Stakeholder Management from McDonald's

The movie "The Founder" provides valuable insights into the importance of stakeholder management in business. It highlights the following key lesson:

Effective stakeholder management requires balancing profit-driven goals with ethical considerations and fair treatment of all stakeholders.

In the movie, Ray Kroc's ambitious expansion plans for the McDonald's franchise result in conflicts with the McDonald brothers, franchisees, and other stakeholders. His single-minded focus on profit and control leads to strained relationships and negative consequences.

By disregarding the interests of key stakeholders and neglecting ethical considerations, Ray Kroc demonstrates the potential risks and long-term consequences of poor stakeholder management. The movie underscores the importance of:

Identifying and analysing stakeholders to understand their needs and concerns;
Engaging in open and transparent communication to foster trust and understanding;
Balancing financial goals with stakeholder welfare and fair treatment;
Considering the long-term impact of decisions on relationships and reputation.

Ultimately, "The Founder" reminds us that successful businesses must recognise the value of stakeholder management and prioritise sustainable, mutually beneficial relationships to achieve long-term success.

Cultivate Win-Win Relationships

Choose the Right Partners: Partners should be chosen for their ability to add value rather than simply providing their name and money. A strong desire to advance in life is more important than experience and resources. Ray Krock desired multiple franchise owners who adhered to his standards of standardisation, automation, and discipline in order to scale up McDonald's. First, he chose a few wealthy franchise owners, but he discovered that they were not following his instructions. Later, for their work ethic and ambition, he carefully selected hardworking middle-class individuals. Because these new franchise owners were focused and willing to follow Ray Krock's guidelines, this idea was a huge success.

"Fred would go out to Milwaukee or Molina or Kalamazoo or wherever a new operation was starting, and he'd call on a baker there and tell him about McDonald's and the buns we would like him to make for us. Fred had the figures laid out cold, so the baker could see why our way was better and how it would save him money. He'd never heard of the kind of box we wanted, so Fred would set up a meeting with the box manufacturer. Supplying buns to McDonald's was the break of a lifetime for many of these men."

"Our stores were selling only nine items, and they were buying thirty or forty items with which to make the nine. So although a McDonald's restaurant's purchasing power was no greater than any other in a given area, it was concentrated. A McDonald's bought more buns, more ketchup, more mustard, and so forth, and this gave it a terrific position in the marketplace for those items. We enhanced that position by figuring out ways a supplier could lower his costs, which meant of course, that he could afford to sell to a McDonald's for less. Bulk packaging was one way; another was making it possible for him to deliver more items per stop."

"Whenever Fred came up with a better idea of handling a product, I'd see to it that our suppliers implemented it in all their operations. My years of experience in selling paper cups and Multimixers paid off here, because I knew exactly what hands held the strings I wanted to pull to get the job done. I didn't start McDonalds until I was fifty-two years old, and then I became an overnight success. But I was just like a lot of show business personalities who work away quietly at their craft for years, and then suddenly, they get the right break and make it big. I was an overnight success all right, but thirty years is a long, long night."

"I've always dealt fairly in business, even when I believe someone was trying to take advantage of me. That's one reason I have had to grind away incessantly to achieve success. In some ways I guess I'm naive. I always try to take a man at his word unless he's given me reason not to, and I've worked out many a satisfactory deal on the strength of a handshake."

Customer-Centric Strategies: Building Community Engagement

It makes no difference to which community you sell your product or provide your services; you must be a part of it. Ray Kroc has always made a variety of initiatives to build communities around all of his restaurants while also attempting to improve existing ones. Many of McDonald's employees were recruited from the communities they served.

He also had local advertisers who would work on specific communities and organise special events, birthdays, holidays, celebrations, and so on. He also believed that his company should give back to the community through charitable work, which it still does.

It's essential to get into the community that you are working with and find ways to make their lives easier, get them to open up to your business, and give them something in return for being loyal customers. This doesn't apply only to food and hospitality businesses, but to all types of organisations.

In the end, McDonald's is living proof that you only need to focus on customers and employees to succeed. This is clear even today, as McDonald's continues to learn what customers want and deliver those things while keeping a happy base of employees, even hourly workers.

Movie Description

War Dogs is based on one of those true stories that no one would actually believe if it were written as fiction. In the mid-’00s, two kids named Efraim Diveroli and David Packouz managed to secure a $300 million contract with the United States government to supply allied forces in Afghanistan with arms and ammunition. They then embarked on a globetrotting misadventure that saw them dealing with shady crooks and corrupt politicians and dangerous soldiers in the name of making a fortune. Most astonishingly, both men were twenty something stoners with no experience handling anything of this size or scope. As much as the film may diverge from the truth for the sake of cinematic drama, the core story remains jaw-droopingly true.

Expected Outcomes

There are several important lessons that any aspiring new entrepreneur can learn from Hollywoods portrayal of business in these business movies. Two friends embark on that journey, and they do what any excited real entrepreneur or business manager would do: they hustle, work like dogs, read and study all night, and have a do-whatever-it-takes attitude. If a deal is about to fall apart, they hustle even harder and manage to keep it together. The purpose of the case study is to provide a practical case study on how to build a business in the facilitated network sector, which makes money by allowing people to exchange information, products, and services.

Rational

Entrepreneurs are constantly learning on the job, from their peers to their idols, and, most importantly, from their own mistakes—the road to owning your own business is littered with lessons learned. However, learning some of these lessons before embarking on your own journey only makes the process easier. i.e. Cutting corners can be an expensive proposition - Finding the best deals can be wise but make sure that you consider long-term costs and the time that you might have to invest to fix problems.

Key Lesson

None

Lesson on Stakeholder Management from "War Dogs"

In the movie "War Dogs," one can learn a valuable lesson about stakeholder management:

The lesson from "War Dogs" is that neglecting ethical considerations and prioritising personal gain over stakeholder welfare can lead to severe consequences. The main characters, David and Efraim, engage in illegal activities, manipulate government contracts, and disregard the interests of various stakeholders.

This approach ultimately results in legal troubles, damaged relationships with stakeholders, financial losses, and a tarnished reputation. The movie serves as a cautionary tale, emphasising the importance of ethical decision-making, transparency, and accountability in stakeholder management.

By understanding and prioritising the needs and interests of stakeholders, businesses can build trust, foster long-term relationships, and mitigate potential risks. Effective communication, proactive engagement, and responsible actions are key elements in successful stakeholder management.

Treat everyone well

The one thing these guys lacked was the ability to make others look good along the way. They did not hire a lobbyist when they should have. This was one of their main issues. They also encountered numerous legal issues, but there was never anyone in Washington who could help them. A lobbyist could have greased the right wheels and aided the dude's business growth.

They also underpaid or did not pay many of the people with whom they worked along the way. In the end, no one stood up for them because everyone had a bad taste in their mouth from working for them. The people they underpaid, paid late, or didn't pay at all played a key role in ensuring these guys failed.

Make an effort to treat everyone with respect. When things go wrong, people are less likely to throw you under the bus if they remember you favorably. For example, if you treat a client well and something goes wrong on the account as a result of your actions, they will not dump you on your partner. Furthermore, if you make a mistake on a partner's account and he or she discovers it, they will not punish you if you have always treated them well and made them look good.

That's another thing that happened in War Dogs. The main character was always being an asshole and trying to screw people over. It served him well in the short term, but it landed him in legal trouble and behind bars in the long term. It's simple to be an asshole. Being nice is not, but it is better and produces longer-lasting results.

Treat your employees right

This may appear to be an idealistic point with no real substance behind it, but treating your employees well is not only ethical, but also good business. In my experience, the better treated employees are, the more they care about their work, which usually translates to better results and happier customers. In War Dogs, the most blatant example of this point is Efraim Diveroli attempting to defraud someone of the wages he promised them, which eventually leads to them being reported and the whole thing falling apart. The truth is that your reputation follows you, and Efraim Diveroli had a bad one. But it works both ways, if you are a good employer, word of that can spread pretty fast too, which will allow you attract the best talent to work for you.

The Power of Listening (Listening Creates New Opportunities): Listening is a critical leadership quality. Billy Beane, in the film "Moneyball," listened to Peter Brand, who had just begun his professional career. Billy understood Peter's perspective on baseball, player , and team management. As a result of Peter's radical thought, Billy discovered an unconventional way of viewing the game.
Seek Criticism to Understand Reality: This film demonstrates how we can build our success on criticism. Billy is constantly looking for criticism. And gains knowledge from the well-thought-out critiques.

Lesson on Stakeholder Management from "War Dogs"

The movie "Moneyball" provides valuable insights into effective stakeholder management in the context of sports management and team-building. The key lesson learned from the movie is:

The importance of challenging traditional practices and leveraging data-driven strategies to prioritise stakeholder needs and maximise success.

In the movie, Billy Beane, the general manager of the Oakland Athletics baseball team, faces numerous challenges in managing the team's stakeholders, including players, coaches, owners, and fans. However, he realises that relying solely on conventional scouting methods and subjective evaluations limits the team's potential for success.

By embracing a data-driven approach and focusing on undervalued players based on statistical analysis, Billy Beane revolutionises the way the team is built. This approach allows him to identify players with specific skills and attributes that align with the team's objectives and the needs of the fans.

The lesson from "Moneyball" is applicable beyond sports management. It emphasises the importance of challenging existing practices, adopting innovative strategies, and making decisions based on comprehensive stakeholder analysis. By prioritising stakeholder needs and leveraging data-driven insights, organisations can make informed decisions that lead to improved performance, increased stakeholder satisfaction, and long-term success.

The two men form a profitable business partnership, but because they are friends, they do not seek a partnership agreement or contract governing the distribution of funds or company ownership. In the film, the men underbid their competitors by millions of dollars, essentially leaving money on the table. This is due to a lack of preparation and research. In business, you must understand what your competitors are doing as well as the value of what you are offering. When the new hire inquires about the meaning of the company's name "AYS," the owner is unable to provide an answer. Your business may have a lot of intellectual property and branding. Eventually, one of the partners recognises the need for a partnership agreement and drafts one that reflects their 70/30 split relationship and has the partner sign it. Making a partnership agreement sooner rather than later is preferable. He would have been better served, however, if he had had an attorney draft his agreement because they would have ensured that he was compensated if he left the company (which is an issue later).

During a scouting trip to Cleveland, Beane meets Peter Brand, a young Yale economics graduate with radical ideas about player evaluation. Beane wonders if Brand would have drafted him out of high school; scouts thought Beane was promising, but his career in the major leagues was disappointing. Brand claims he would have waited until the ninth round to draft him. Beane hires him after being impressed.

Beane employs Brand's sabermetric method to sign undervalued players like Chad Bradford, Jeremy Giambi, and Scott Hatteberg, as well as trade for David Justice. The Athletics' scouts are opposed to the strategy, and after a heated argument, Beane fires the head scout, Grady Fuson. Beane is also opposed by the Athletics' manager, Art Howe. Howe rejects Beane's and Brand's strategies in favor of a more traditional lineup.

Financial Ratios Key Takeaways:

The key takeaway from the discussion on stakeholder management is that it plays a pivotal role in the success and sustainability of businesses operating in today's complex environment. Using the case study of a multinational corporation introducing a sustainable product line, we see that understanding and addressing the diverse interests and expectations of stakeholders is paramount. By actively engaging with customers, suppliers, employees, investors, regulatory bodies, and environmental groups, businesses can build trust and navigate challenges effectively. This includes tailoring communication strategies to different stakeholder groups, providing regular updates, and soliciting feedback to ensure that decision-making aligns with the values and expectations of all parties involved.

Moreover, the case study highlights the importance of going beyond mere compliance and adopting a proactive approach to stakeholder engagement. Businesses are encouraged to establish ongoing dialogues with stakeholders, incorporating their feedback into decision-making processes. The creation of a sustainability advisory board, for instance, can facilitate collaborative decision-making and demonstrate a commitment to responsible business practices. Transparent reporting on environmental and social impact metrics serves as a powerful tool for showcasing accountability, contributing to enhanced reputation and long-term resilience in the face of an ever-evolving business landscape.

In essence, businesses are urged to recognise stakeholder management not just as a regulatory requirement but as a strategic imperative for growth and sustainability. By integrating stakeholder considerations into the core of business operations, companies can position themselves as socially responsible leaders, fostering positive relationships with diverse stakeholders and optimising their overall performance in the market.