Tourism GMS the GMS in the Management in Tourism Management November-December Cambodia 2006,Cambodia November- December2009,

Trevor Sofield Professor of Tourism University of Tasmania Australia. Consultant : ITC

Stakeholder Analysis

Definition of Stakeholders
Tourism Management in the GMS November- December 2006, Cambodia

Any group or individual who can affect or is affected by the achievement of an organisations 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
Tourism Management in the GMS November- December 2006, Cambodia

Narrow definitions of who is a stakeholder look at direct relevance to the activitys 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.

Stakeholder Analysis
Tourism GMS the GMS in the Management in Tourism Management November-December Cambodia 2006,Cambodia November- December2009,

Is now a widely accepted part of the code of corporate ethics The concept hinges upon the notion of fairness Stakeholder management requires, as its key attribute, simultaneous attention to the legitimate interests of all appropriate stakeholders, Minorities included, both in the establishment of organizational structures and general policy and case-bycase decision making.
(Donaldson, T. and Preston, L.E. (1995) The Stakeholder Theory of the Corporation: Concepts, Evidence and Implications, Academy of Management Review 20 (1), 65-91).

. . . ...

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Stakeholder Analysis
A diagnostic tool to Tourism GMS the GMS in the Management in Tourism Management November-December Cambodia 2006,Cambodia November- December2009,

identify key stakeholders clarify their interests comprehend their perception of the problem

specify their resources (supportive and destructive)

outline their mandate

. . . ...

Stakeholder analysis is a continuous process

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Stakeholder Analysis
Levels of importance of stakeholders
Tourism Management in the GMS November- December 2006, Cambodia

Primary stakeholder: one who without continuing participation the

business 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.

Active versus passive stakeholders (eg farmers versus absentee

landlord)

. . . ...

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Stakeholder Analysis
Helpful stakeholders to enlist:
Tourism Management in the GMS November- December 2006, Cambodia

. . . ...

ADVOCATES Idea creators, designers CHAMPIONS - to lead the change SUPPORTERS - critical mass DECISION MAKERS (to approve the activation of critical change enablers policies, funds, people) OPINION LEADERS - decision-swayers, special interest groups that sustain peoples awareness of the need for change (lobby groups, NGOs, media)

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Functions of Stakeholder Theory

(Donaldson and Preston (1994); Jones (1995)
Tourism Management in the GMS November- December 2006, Cambodia

Stakeholder theory can also deal with conflicts and trade-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 recognises that multiple interests must be addressed and that balances or tradeoffs must occur.

. . . ...

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Problems with the Concept of Stakeholder Theory

Tourism Management in the GMS November- December 2006, Cambodia

Where does tourism begin and end?

Involving every stakeholder in discussions and negotiations can be an expensive task. The broad definition: any group or individual who can affect or is affected by the achievement of an organisations objectives presents problems as boundaries become imprecise: a NGO in one country may claim stakeholder status in another country It doesnt always address power relations Subjectivity of deciding who is a stakeholder Bringing stakeholders to the same table may result in more not less conflict.

Benefits of Stakeholder Analysis

1. 2. 3. 4.
Tourism Management in the GMS November- December 2006, Cambodia

5.
6.

7.

. . . ...

Can improve quality, efficacy and evaluation of policies and projects Can improve assessment of social and political impacts of policies and projects Allows for differences in opinions to be identified Doesnt differentiate between those who own versus those with interest in tourism so does not automatically exclude non-owners Makes managers responsible for more than profit maximisation (the triple bottom line) Its relevance for identifying multiple objectives and concerns (e.g between economic, social and environmental viewpoints and between different interests of different stakeholders) A way in which the need and interests of people who are underrepresented politically and economically can be highlighted.

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A Model for Stakeholder Analysis

(Hardy 2001)
GMS the Management Tourism GMS the inin Management Tourism Cambodia 2009, November-December Cambodia NovemberDecember 2006,
GROUP 1

A general model for Stakeholder Analysis, applicable at any scale.

N=x GROUP 2

N=x

N=x

Multiple arrows represent interactions, reactions and feedback between stakeholder groups.
N represents the number of different stakeholders that may exist within any stakeholder group. The outer circle represents any boundary regional, local or state.

GROUP 4 GROUP 3 N=x

. . . ...

any boundary (indicative diagram only. There could be

many more arrows representing many more relationships)

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A Model for Stakeholder Analysis

(Hardy 2001)
Tourism Management in the GMS November- December 2006, Cambodia

What do we mean when we say a stakeholder group is mixed? Suppose Group 1 represents the accommodation sector, there may be two 4-5 star hotels, an eco-lodge, a backpacker lodge, an airport transit motel, a tented safari camp, and 2 community home-stay lodges (N=8). Some of their objectives and interests will be VERY different and they may experience greater difficulty agreeing among one another than with representatives from other groups of stakeholders. Suppose Group 3 represents the community sector, there may be farmers, landless peasants, small stallholders, and homestay lodge owners. As with other groups of stakeholders, within this group there will be different 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!

GROUP 1; Accommodation Sector

N=8

N=5

GROUP 3 COMMUNITY

Strategic Analysis of Stakeholders

Tourism Management in the GMS November- December 2006, Cambodia

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 envisioned changes can happen?)

Summary

Tourism Management in the GMS November- December 2006, Cambodia

Stakeholder analysis assists understanding of tourism as a system encompassing different interests such as environmental, financial, community and tourists satisfaction 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.

Stakeholder Table: Public Transport example Stakeholder Interests Problem Resources Role / Perception Mandate
Tourism Management in the GMS November- December 2006, Cambodia

Passengers Safe,
reliable, and reasonable public transport

Many delays Frequent bus breakdowns Frequent accidents Impolite drivers Dangerous driving

Willingness to pay for improved services

Not applicable

Private Car owners

No traffic jams and safe roads

Reliable, low-cost public transport system

Too many accidents caused by buses

Citizen complaints about public transport system Increased traffic jams Car emissions, obese people

May consider Not use of public applicable transport if reliable and safe

Mayor of Port Rarorialofa

Veto power in Council Commands popular support

To manage City of Port Rarorialofa

Bicycle Power Reducing pollution For the Future for healthy living

5,000 members To lobby Mayor

and change public opinion

Tourism Management in the GMS November- December 2006, Cambodia

EXERCISE Identify 4 stakeholders involved in the Kokoda Track tour

Groups Interests

Problem Resources Role / Perception Mandate

1. 2. 3. 4.

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