The Application of Stakeholder Theory to Relationship Marketing Strategy Development in a Non-profit Organization

Abstract

Non-profit (NP) organizations present complex challenges in managing stakeholder relationships, particularly during times of environmental change. This places a premium on knowing which stakeholders really matter if an effective relationship marketing strategy is to be developed. This article presents the successful application of a model, which combines Mitchell’s theory of stakeholder saliency and Coviello’s framework of contemporary marketing practices in a leading NP organization in the U.K. A cooperative enquiry approach is used to explore stakeholder relationships, dominant marketing practices, and to surface differing perceptions about the organization’s marketing strategy. Resolving these differences sets the scene for developing choices in marketing strategy for the future.

Appendices

Appendix A

Coviello adapted CMP Questionnaire: Stakeholder Communication Practices

Respondent:

Company:

Department/Role

Priority Stakeholder ID:

• 1. The purpose of communicating with this stakeholders is to:

  • Generate income or other forms of support or provide beneficiaries with information, help, or support.

  • Acquire supporter⁸ or beneficiary information.

  • Build a long-term relationship with supporters or beneficiaries.

  • Forming strong relationships with a number of partner organizations⁹ engaged in the field of health improvement.

• 2. Our communication activities with this stakeholder involves:

  • Communicating to the mass market.

  • Targeting specifically identified segment(s) of supporter(s) or beneficiary(s).

  • Individuals at various levels in our organization personally interacting with stakeholders engaged in health improvement.

  • Senior managers networking with other managers from partner organizations engaged in health improvement.

• 3. Contact with this stakeholder is best described as:

  • Impersonal (e.g., no individual or personal contact).

  • Somewhat personalized (e.g., by direct mail).

  • Involving nominated individuals in the one-to-one management of the activity (e.g., account management).

  • Interpersonal (e.g., involving the establishment of strong relationships often between key decision makers on a one-to-one basis).

• 4. When we communicate with this stakeholder the interaction is such that we believe they expect:

  • Impersonal contacts with no future contact as a result.

  • Some future personalized contact with us (e.g., direct mail).

  • One-to-one personal contact with us.

  • Ongoing one-to-one personal contact with people in our organization and our partner network.

• 5. The interaction we have with this stakeholder is best described as :

  • Mainly formal contact at arms length through correspondence, adverts, and mailers.

  • Formal with occasionally direct contact with nominated individuals.

  • A named contact or individual who is responsible for the overall relationship with limited social contact.

  • A mixture of formal and social contact with the development of the relationship being important to both parties.

• 6. Our departmental communication activities with this stakeholder are primarily intended to:

  • Attract new or retain existing supporters or beneficiaries.

  • Get information to new supporters or beneficiaries.

  • Develop stronger relationships with existing supporters or beneficiaries or other stakeholders.

  • Coordinate activities between ourselves, customers, and other parties across our wider network of partners engaged in health work.

• 7. Our communications planning¹⁰ for this stakeholder is focused on issues relating to:

  • The mass market.

  • Particular groups of supporters or beneficiaries.

  • Specific individuals in the general population or decision makers in organizations we deal with whose support we need.

  • The relationships between individuals and organizations in our partner network.

• 8. Our communication resources (e.g., people, time, money) for this stakeholder are invested in:

  • One or several of our core activities of Education, Awareness, Fundraising, Community Care.

  • Technology & systems to improve communication with any of our audiences.

  • Establishing and building one-on-one personal relationships with individuals.

  • Developing our organizations relationships across our Partner network.

• 9. Our communication activities for this stakeholder are carried out by:

  • Functional marketers (e.g., marketing manager, head of marketing, Marketing Director).

  • People who have primary responsibility for other aspects of the business and undertake communication activities as part of a broader remit (e.g., Legacy Manager).

  • Many employees across the business.

  • The senior management team (Director General, Directors, and Heads of Department).

Appendix B

An illustration of the ethnography of Checkland’s seven-step, soft systems applied to the Charity.

SSM process11		Research mechanism	Researcher reflections
Step 1	Problem situation identification	A series of meetings with key managers as part of the Charity’s annual planning process where the process of the allocation of resources was underway	The starting point was a recognition of the need to prioritize stakeholders (i.e., define the ‚who’) and understand how the saliency of the key stakeholders might affect ‚what’ the organization chooses to do.
Step 2	Problem situation expressed	Definition of scope and agreement to conduct the research	Having gained recognition of the problem situation, the second step was agreeing the scope of the research work which was defined as part of a bigger project of rebranding the Charity.
Step 3	Root definitions of relevant purposeful activity systems	Root definitions and ‚holons’ were drawn up collaboratively between the researchers and the relevant managers and reviewed by a group of managers in a SSM workshop.	Exposure of SSM to the managers was held in the background, with the focus being on discussing the problem situation. Managers generally found the approach easy and useful to work with. A few managers expressed interest in acquiring greater knowledge of the methodology and went on to use the approach in other problem situations.
Step 4	Conceptual models of the systems (holons) named in the root definitions
Step 5	Comparison of models and the real world	SSM workshop	Managers commented on the ‚power’ of the ‚holons’ to describe what had previously been seen as a complex, almost indescribable problem and how it ‚opened – up’ discussion about cross – functional improvements.
Step 6	Changes: systematically desirable and culturally feasible	SSM workshop and subsequent meetings	The need to strengthen the ‚voice of the beneficiary’ was surfaced and has become a strategic priority for the organization, forming a cornerstone of the 3-year business plan.
Step 7	Actions: to improve the problem situation	Business planning process	An initiative to amplify the ‚voice of the beneficiary’ has started. This includes adding to the representation of beneficiaries at Council level and at other forums.

Appendix C

Illustrative responses to the Coviello questionnaire from three respondents

Appendix D

An example of a soft systems artifact about the Charity: root definition, CATWOE, and activity systems in marketing strategy development

Appendix E

Mitchell et al. (1997) stakeholder classification by saliency and description

Stakeholder typology	Stakeholder classification	Description & managerial implications
‚Latent stakeholders’	Dormant	Possess power, but no legitimate claim or urgent need. Their power is unused. Dormant stakeholders have little or no interaction with the firm. Management should be cognizant of their potential to acquire a 2nd attribute.
	Discretionary	Posses legitimacy but not power or urgency. There is no pressure on managers to engage although they can choose to do so. This group is most likely to be recipients of ‚corporate philanthropy’ such as non-profits and CRM.
	Demanding	Possess urgency but not legitimacy or power. These are the ‚mosquitoes buzzing in the ears of managers’ irksome but not dangerous; bothersome but only warranting passing attention.
‚Expectant stakeholders’	Dominant	Possess both power and legitimacy and therefore influence. This group matters to managers. They will have a formal mechanism to interact with managers. They expect and receive much management attention.
	Dependent	Possess legitimacy and urgency but no power. Depend on advocacy, guardianship or internal management values for influence.
	Dangerous	Possess urgency and power but not legitimacy. Coercive and possibly destructive. The corporate terrorist. Management need to contain.
‚Definitive stakeholders’	Definitive	Possess power, legitimacy and urgency. Command immediate management attention. Most likely occurrence is the movement of a stakeholder from expectant to definitive under certain conditions. Managers need to understand/predict these conditions/situations.