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Stakeholder Salience

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As the push for globalization has demanded coalitions between countries, government organizations, and political party systems, there has been a great impact on the power and legitimacy of each organization that plays a part in this process. Dynamic groups have sprung forward to assess the validity of other groups, and calls for recognition on a global scale have had some countries and political organization demand it be accepted as an entity with a base of power that can negotiate under sovereignty.

Group formation gives rise to identity, and by looking through a specific set of lenses, other organizations may adopt a viewpoint of shared acceptance of a nascent group, thereby creating a vested interest as being a stakeholder of the newly formed organization.

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Salience in such an instance is formed by building coalitions to promote a vested interest in the existence and proliferation of the newly formed group. Weber and Lawrence (2011) defined globalization as “the increasing movement of goods, services, and capital across national borders” (p.

125). When applying this definition of globalization to stakeholder salience, it can be determined that interest in other nations can perpetuate the validity of becoming a stakeholder of that nation, and can thrust even more interest in other nations that may also have become a stakeholder as well. In the past, coalition building at international levels has typically been done with sitting governments of particular nations. However, recent trends in nations being overthrown by factions that did not have a seat at international events are increasingly being given an opportunity to dialogue amongst some of the most powerful nations in the world.

Getting super powers to recognize an organization as a government has fueled many militaries and regimes to assume coerced power from within its native borders is becoming much more pervasive in the past decade than it has in several scores. Weber and Lawrence defines stakeholder salience as “A stakeholder’s ability to stand out from the background, to be seen as important, or to draw attention to itself or its issue. Stakeholders are more salient when they possess power, legitimacy and urgency” (p. 565). Since the previous paragraph discussed power in depth when concerned with a stakeholder’s interest in globalization, let’s transition to the variances in legitimacy and urgency. Moral legitimacy has also taken a new role in globalization. Benjamin A. Neville, Simon J. Bell and Gregory J. Whitwell (2011) state “salience of stakeholders will also vary as the degrees of the attributes vary”. While some organizations can use time as a deterrent to imposing immediate change in its directional flow in changes of government, urgency is best identified with those who impact to make radical changes need to happen much sooner than later.

Requesting assistance to uproot a political opponent or oppressive regime can ill afford a wait and see approach. Overthrowing a government that has been deeply rooted in a particular country’s way of living usually is met with fierce resistance, and a plethora of collateral damage. Organizational change in nations can also bring to the forefront how the structure of the economy can impact stakeholder coalition. Hurrell (2013) discussed a two dimensional process for peace and ethics in a worldwide perspective by positing “economic globalization and integration on the one hand, and the character of major interstate relations on the other”. This can best be analyzed by the perception that the inter-relatedness of countries is becoming much more commonplace, and delegations of groups representing one country’s interest as a stakeholder in another must be given value and precedence for it to establish its ‘rightful seat at the table’.

The phenomena of balancing the three criteria that make up stakeholder salience (power, legitimacy and urgency) can also confer that by having only two of the three criteria, specifically power and legitimacy, can bestow stakeholder statue (Hurrell, 2013). By stating “The urgency attribute provides a dynamic dimension to the salience framework, helpful and relevant in the prioritization of stakeholder claims, but irrelevant in the identification of stakeholders” (p. 362), Hurrell (2013) asserts a definitive stakeholder will possess all three criteria, but all three need not be present to be a stakeholder in general. However, when prioritizing the three criteria, the order of importance is noted that power is the principle criteria to being a credible stakeholder of an organization, followed by legitimacy. Sebastian Haunns’ (2009) work on legitimacy gives rise to the theoretical research of social movements. He claims “Social movements challenge their opponents’ legitimacy almost by definition.

Their claims are not only about changing policies or fulfilling demands, but usually also contain an element of criticism concerning the established procedures of decision making” (p. 6). Thus, a legitimate social movement can challenge a legitimate opposition. Yet this challenges whether a social movement that is not deemed legitimate can actually have a credible opposition to its foe. By delving further, it can also be summarized that a legitimate social movement cannot exist if the opposition is deemed to be illegitimate. The globalization of corporations in reference to stakeholder salience can be analyzed by looking at the type of organizational structure a particular company chose as to how it will operate in other countries. Companies with intentions on formulating international strategies typically choose either a global strategy, a multi-domestic strategy, a transnational strategy, or a combination or hybrid of the different types.

According to Hitt, Ireland, and Hoskisson (2013) a multi-domestic strategy is used when the company works in a decentralized manner where localized units determine the operational atmosphere (p. 234). A good example of this type of strategy can be seen how McDonald’s operates in different countries. Some McDonald’s do not sell beef in countries such as India. However a beer may be sold with a burger while in Germany. In a global strategy, the home units rules the universal production of a product (p. 235). An example of a company utilizing this type of strategy is Coca Cola. The secret ingredients to make the product does not change, regardless of where it is sold.

Next, the transnational strategies are common when an organization is trying to integrate a product or service that caters to the locality of the users, while maintaining a strategic home base similar to the global strategy approach. Hitt, Ireland, and Hoskisson (2013) uses Starbucks for this example, as the different types of teas and coffees are offered depending on local demand, yet the corporation maintains its only headquarters in the U.S. The challenges of stakeholder salience is as varied as the combinations of organizations that can be construed as friend or foe, as competitors versus coalitions, and as identifying a group as being a catalyst as a social movement or mislabeling the group altogether. Deciding the ultimate goal of the organization, and the primary focus on its existence, is tantamount to determine any of the goals set forth, whether the goals are corporate, governmental, or civil.

Cite this Stakeholder Salience

Stakeholder Salience. (2016, Jun 22). Retrieved from https://graduateway.com/stakeholder-salience/

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