1. Executive Summary
Based on a review of the literature, we find that, within the public sector, there is a growing challenge for government to meet community and sectoral expectations and to develop effective relations with stakeholders that will further organisational objectives and policy outcomes. Managers decide to involve stakeholders in public decision-making for a number of reasons. They bring useful and relevant knowledge to the decision-making process; there is more likely to be stakeholder acceptance of the decisions, even if those decisions do not necessarily reflect individuals’ desired outcomes; and, to respond to changing community and sectoral expectations.
Biosecurity Australia operates within a tightly bounded environment, with accountability to international trade agreements and a nationally agreed policy on Appropriate Levels of Protection. Within this framework, stakeholder engagement can contribute to the effectiveness of risk assessment and communication by improving access to relevant information and improving stakeholder acceptance of decisions and trust in the process. A strategic approach to stakeholder relations has the potential to improve efficiency in import risk analyses, reducing time and resource commitments and minimising the potential for politicization.
In order to engage strategically with stakeholders, it is critical to know who stakeholders are, what their needs are, what their expectations are of a particular issue or policy, how they are likely to react and what influence or power they can bring to bear on the issue. A range of tools available for stakeholder analysis and mapping will be useful to people working in risk assessment and communication. We present practical models for undertaking a comprehensive stakeholder analysis that can be used as the basis for stakeholder engagement. We show how the stakeholder analysis can assist in identifying areas of shared interest which can be the basis for developing coalitions of support.
These tools were applied in a hypothetical example based on a workshop that ACERA was invited to host titled the Integration of Risk over Volume of Trade and Time. The sample size and scope of this workshop meant that its value is purely illustrative of the application of the tools. Based on our review and the pilot application of the tools, we find that stakeholder analysis and mapping provide a transparent and inclusive framework for a strategic approach to stakeholder engagement in biosecurity risk assessment and communication, without risking the creation of unrealistic expectations among stakeholders.
Australian Centre of Excellence for Risk Analysis
The Australian Centre for Risk Analysis was established in 2006 to undertake research and develop best practice models for risk analysis, with specific reference in the first instance to biosecurity. This review and case study were undertaken within the framework of ACERA’s work program. The specific objectives of this project are to:
review methods for stakeholder mapping
develop and test a methodology that will enable researchers and government agencies
evaluate the potential value of stakeholder mapping as a key process in effective stakeholder
engagement with respect to biosecurity risk assessment
recommend approaches to the development of stakeholder maps and their application to biosecurity risk analysis
This project links to ACERA’s objectives, with specific relevance to the following objective: o
to document and communicate research findings to ensure governments and others engaged in risk analysis have access to state-of-the-art risk analysis methods and raise the community’s understanding of risk.
In developing a methodology for stakeholder mapping around risk issues, we have sought to provide a model for:
• identifying stakeholders relevant to a specific issue;
• identifying their position (knowledge base, attitude, influence and interest) in relation to the issue and in relation to other stakeholders;
• engaging them in constructive dialogue that acknowledges diverse sources of knowledge and the levels of uncertainty around these different forms of knowledge; and • identifying their potential ongoing involvement in the various processes of risk assessment, decision-making and management.
To this extent, we see stakeholder mapping as a critical component of the successful implementation of risk assessment and risk management processes.
Section 3 of this report draws on existing literature to explore and propose a practical framework for stakeholder involvement in risk analysis. A literature search was conducted via Science Direct, EconLit, Australian Public Affairs and PsychInfo databases using the search terms stakeholder mapping and stakeholder AND risk. In addition, key texts and authors in the field were identified via a University of Melbourne catalogue search. Section 4 looks specifically at stakeholder analysis and mapping, reviewing the range of different approaches presented in the literature and developing a protocol for the application of stakeholder analysis and mapping to biosecurity risk analysis. Section 5 examines a number of examples of the use of stakeholder analysis and mapping from the literature. Section 6 documents a case study undertaken within the context of this project and using the proposed protocol. Section 7 presents the conclusions and recommendations.
Stakeholder mapping for effective risk assessment and communication
3. Stakeholders and risk analysis
3.1 Why stakeholders matter
Over the past two decades there has been a growing awareness within the business sector that effectively managing stakeholder relations is critical to business success (see Davis, 2005; Donaldson and Preston, 1995; Freeman, 1984 and 1997; Wheeler and Sillanpaa, 1997). There are many examples within the sector of the development of innovative approaches to dealing with changing community and stakeholder expectations. A number of studies have documented the application of different stakeholder engagement processes to achieve improved business outcomes (see Phillips, 2003; Svendsen, 2006; Eden and Ackermann,1988)
The stakeholder theory of the corporation has a long history. Freeman’s seminal work, Strategic Management: A Stakeholder Approach (1984), acknowledged earlier work of the Stanford Research Institute, which in 1963 had identified stakeholders as “those groups without whose support the organisation would cease to exist”. This had been within the context of a consulting project where the Stanford Research Institute had identified a trend amongst companies to fail to plan for or foresee future legislation or regulation that would incur constraints and costs to the business. Acknowledging the impact of a company’s actions was an integral part of taking a long-range view of the company’s business prospects.
Freeman took this earlier work of the Stanford Research Institute and developed stakeholder theory as a strategic management approach. The fundamental principle behind Freeman’s approach is that there are a number of people, organisations and groups, other than those directly connected to the firm either as investors or employees, who are critical to the firm’s success. There have been and continue to be critics of the stakeholder approach to business management, including most notably Milton Friedman who has argued that the goal of business should only be to maximise returns to shareholders within the law. In contrast, Ian Davis, Managing Director of consulting firm McKinsey & Company, wrote in The Economist in 2005, that business needs to manage its contract with society actively if it is to retain public trust and shareholder investment. The proposition that business depends on society for its ‘licence to operate’ underpins the importance of stakeholder relations to maintaining corporate viability.
3.2 Why decisions fail
Decisions taken without due regard to stakeholders may result in both financial and reputational cost to organisations. Shell’s decision to sink the Brent Spar oil rig in the North Sea and its actions in Nigeria rebounded with massive consumer boycotts throughout Europe. Nike’s treatment of its outsource workers in Asia occasioned similar financially and reputationally damaging consumer boycotts. BHP’s failure to take into consideration the livelihoods of the villagers living downstream from its Ok Tedi mine resulted in major law suits against the company.
The UK Government’s decisions in respect of mad cow disease (BSE) resulted in major losses for the beef industry in the UK and had a significant impact on public trust in the processes of government. In 2002, Paul Nutt published his findings from an analysis of 400 strategic decisions. Half of the decisions had failed, in large part, because the decision makers had failed to consider the interests of and information held by key stakeholders. Understanding the views of stakeholders opens up a decision-maker’s perspective to important cues that help indicate what the decision is about and how stakeholders may react to it.
It is worth outlining one example in more detail. In proposing a deep-sea disposal of its decommissioned Brent Spar oil rig, Shell believed it had acted responsibly. It had considered the costs and dangers of dismantling and dumping it in various locations. However, it had paid little attention to growing public unrest about oil companies. It had government approval for its proposed disposal plan but had not identified the public as a stakeholder and so had not taken into consideration public concern about deep-sea dumping. The issues of precedent were overlooked, as was the potential for their action to lead to increased regulation if their actions were in fact found by the public to be irresponsible.
Shell was shocked by the response to the public announcement of its decision. Greenpeace mounted a high-profile campaign against the company. The media took up the cause and Shell’s position became untenable. It was forced to find another way to dispose of the Brent Spar rig. By undertaking its analyses internally, Shell had missed the opportunity to work with environment groups to develop shared data. Both the company and Greenpeace challenged each other’s data. By identifying in advance the outcome it wanted, Shell had narrowed the search for solutions and focussed on ways of making deep-sea disposal acceptable (Nutt: 63-68, 74, 121, 241). As many in
Shell later admitted, Shell became a victim of its own culture, an over-reliance on finding engineering solutions to issues without looking at the social and environmental contexts in which those decisions were being made. Shell subsequently allocated significant resources to a global stakeholder engagement process which led to its adoption of a sustainability reporting framework from 1998 (see www.shell.com).
3.3 Stakeholders and the public sector
In 1999, the Allen Consulting Group published Stakeholder Relations in the Public Sector: Innovation in Management. The authors argued that there are long run socio-political changes in our community driving a growth in expectations for participative democracy, rather than the more traditional representative democracy models. Drawing from experience of the business sector, they went on to argue that there is a growing challenge for government to ensure it has effective mechanisms to meet community and sectoral expectation. The older patterns of government consultation and advisory structures seem to be less satisfactory in giving access to community expectations. As business has had to develop its capacity to manage its stakeholder relations, so too must government.
A number of drivers for stakeholder relations in the public sector were identified: the growing trend towards participative democracy, arising out of the social movements of the 60s and 70s; growing affluence; increased capacity for critical analysis within the broader community; media pervasiveness; and finally deepening distrust in public and private institutions, coupled with a growing concern with social issues and with individual welfare in the face of an uncertain future. Under these circumstances, imperatives for stakeholder consultation are likely to grow within the government sector as they have within the business sector.
Indeed, due to the direct involvement of many stakeholder organisations in government service delivery in formal purchaser/provider relationships, as well as the extensive informal involvement of stakeholder organisations, groups and individuals in the implementation of government policy, there is an even stronger imperative for effective stakeholder relations within this sector (Allen Consulting Group, 1999). Feldman and Khademian (2002) argue that managers within the public sector are responsible not only for policy outcomes but also for the appropriateness of the relationships they create and support.
Governance in the public sector, they argue, consists of “multiple and reciprocal relationships that constrain and enable actions taken in a policy arena” (p 551). Public managers, they say, play a key role in determining the nature and quality of these relationships. Whilst Feldman and Khademian do not use the word stakeholders, it is clear that the relationships they are talking about are relationships with stakeholders. “It is important for public managers to think about the relationships they are building, the capacity of these relationships to further democratic objectives, and their ability to accomplish policy goals” (ibid: 551).
There are many examples of effective stakeholder relationship management within the public sector, just as there are many examples of where it has either not been an integral part of the strategy or has not worked effectively, resulting in protracted decision-making, significant political lobbying and/or intervention and increasing public disaffection. (See Allen Consulting Group, 1999, also Sainsbury, Smith and Stevens, 1999 for a review of the partnership model for fisheries management implemented by the Australian Fisheries Management Authority.)
3.4 Practical benefits of stakeholder involvement
The reasons for stakeholder involvement, both within the private and public sectors, have been variously described within the literature as substantive, instrumental or normative. i.
The substantive argument proposes that involving stakeholders generates better decisions – they have access to information that might not otherwise be available; they can bring local knowledge and practical experience; they can ensure that social and cultural values are taken into consideration. (See Wynne, 1996; McDaniels, 1999; Nutt, 2002; Wheeler and Sillanpaa, 1997.)
From an instrumental point of view, stakeholder involvement means that the decisions are more likely to be accepted by all involved, even if they don’t necessarily reflect individuals’ desired outcomes. Involving stakeholders results in greater transparency and accountability of the decision-making process. People know that their issues have been addressed and how the decision-making process has taken place. (See Roberts, 2003 for a discussion of how Cadbury in the UK implemented a non-controversial site closure, based on the recommendations from a comprehensive ‘working party’ process involving managers, engineers and shop stewards. Also, see Syme et al, 1999 for discussion of a research project on water allocations which concluded that “local procedural justice issues, particularly those pertaining to public involvement for local people in decision-making, were significant determinants of judgements of the fairness of the decisions”.)
Finally, there is a moral or normative argument for stakeholder involvement in decisions that affect them and their communities. It can be argued that this is achieved through the process of representative democracy, but as the Allen Consulting Group and others have pointed out, there is a changing societal expectation for what is called participative democracy. The Allen Consulting Group acknowledges the challenges this brings to government, but argues that over and above the political style of any particular government or any particular government agency or minister, “all governments need to consider these questions of more effectively tapping community aspirations and enabling deeper community involvement in a range of public policy issues” (Allen et al, 1999: 16).
Whether for better informing decision-making, for legitimating decisions or for improving transparency, stakeholder involvement helps satisfy both the “technocratic requirement for the best decisions” and the “pluralistic requirement for the inclusion of the norms and values of multiple constituencies in the decision-making process” (Glicken, 1999: 303). 3.5
Stakeholders and biosecurity risk
The 1996 Australian Quarantine Review emphasised the need for early consultation with key stakeholders and a partnership approach to import risk analysis involving governments, industry and the public. It strongly endorsed the adoption of a view of quarantine that embraces the whole Australian community (Nairn, 1996:34). The review found a strong undercurrent of dissatisfaction with consultation processes with regard to all aspects of quarantine risk, whilst noting that most concern focussed on the risk analysis process. The Review recommended the establishment of a register of stakeholders that represents the quarantine interests of the Australian community.
Biosecurity Australia has subsequently established such a register and inclusion on the register is available to any interested individual or organisation. The Register is used for distributing quarantine policy information, Biosecurity Australia News and Policy Memoranda on commodities of interest. The Review went on to recommend that all registered stakeholders be regularly consulted and kept fully informed of significant developments in quarantine policies and programs. With respect to specific quarantine issues such as individual import risk analyses, detailed consultation should be held with the relevant subset of the registered stakeholders (Nairn, 1996: 46). In order to engender the partnership approach that the Review recommends, consultation with stakeholders on import risk analyses should be early and broad, with the inclusion of all relevant stakeholders. The current procedures for consultation for import risk analyses are detailed in Biosecurity Australia’s Import Risk Analysis Handbook which is available on the website.
Stakeholders may provide input into and comment on (via appeal) the proposed scope and approach of the import risk analysis (IRA), the membership of the IRA team, the technical issues paper, the draft IRA Report and the final IRA Report. Stakeholder input on all stages is sought via email communication to the registered list of stakeholders or via announcements on the website. Stakeholders are allowed from 15 to 60 days to respond depending on the stage of the process. The IRA team may choose to meet with stakeholders to discuss matters raised in their submissions, if considered appropriate, and it may conduct field trips to investigate trading patterns, industry practices and procedures relevant to the assessment of the risk. Clearly, stakeholders are relevant to the overall biosecurity risk analysis process.
They can be the source of relevant information and knowledge for the risk assessment process; their involvement in a timely, transparent manner should ensure that the decisions are more likely to be accepted and supported; and finally their involvement addresses the democratic principle that provides for people to have input into decisions that will affect them. An Eminent Scientists Group reviews the final draft IRA report to ensure that the IRA team has adequately considered all technical submissions received from stakeholders during the formal consultation period on the draft IRA. This group reports to the Director of Quarantine on their findings and recommends any action considered necessary to overcome any identified deficiencies.
It is within this context that we propose a number of specific practical tools for stakeholder analysis and mapping which we believe will be useful to Biosecurity Australia in identifying important stakeholders around a specific issue and developing a strategic consultation and communication approach.
We further recommend these tools for other biosecurity risk management applications, for example for developing communication strategies to specific target groups or for managing specific incursion responses or eradication processes.
4. A framework for stakeholder analysis and mapping
Stakeholder analysis has wide acceptance within the business world. Companies systematically scan their social and political horizons to identify those individuals, organisations, groups and issues that are likely to influence their business operations. They develop partnerships with local community groups; they establish community or stakeholder advisory groups; they establish formal and informal consultative processes; they foster active partnerships with their suppliers and with government (Wheeler and Sillanpaa, 1997: 347).
Likewise there has been growing use of stakeholder analysis in other fields over the last 10-20 years, particularly in the development and health policy fields (see Brugha and Varvasovsky, 2000) and increasingly in other areas of the public and not for profit sectors. “It is hard to imagine”, says Bryson, “effectively managing relationships without making use of carefully done stakeholder analyses” (Bryson, 2003).
Grimble and Wellard (1997) in their review of the principles and methods of stakeholder analysis and its application to natural resource management, argue that it has been developed in response to the challenge of multiple interests and objectives where trade-offs need to be negotiated between economic efficiency, environmental objectives and equity. Stakeholder analysis is an approach for gaining an overall “understanding of a system and assessing the impact of changes to that system, by means of identifying the key actors or stakeholders and assessing their respective interests in the system (Grimble and Wellard, 1997: 175).”
4.1 Who is a stakeholder?
There has been a great deal written in the stakeholder literature on the definition of who or what is a stakeholder. Freeman identified stakeholders as “any group or individual who can affect or is affected by the achievement of the organisation’s objectives” (Freeman, 1984). Others have suggested that this very broad definition needs to be narrowed in order to be useful to managers. Clarkson proposed stakeholders are those who are voluntary or involuntary risk-bearers (1994). Others have said that stakeholders are characterised by legitimacy, power or urgency (where urgency denotes the importance of the issue to the stakeholder) or a combination of these characteristics (Mitchell, Agle and Wood, 1997).
Eden and Ackermann present a slightly different definition. For them, stakeholders can only be groups or individuals with the power to directly affect the organisation’s future, either by supporting or constraining its purpose (Eden and Ackermann, 1998:117). Those arguing for a more inclusive definition, propose that the interests of the nominally powerless must be taken into account, within a comprehensive stakeholder approach (Bryson, 2003). Others have argued that the stakeholder concept can also encompass the non-human world, proposing that the natural environment is a stakeholder in and of itself, given that the natural environment can affect and is certainly affected by organisational activity (see Staric, 1995).
It may be useful, as some have argued, to make a distinction between: • primary and secondary stakeholders – that is, to distinguish between those individuals or groups without whose continuing participation the organisation could not survive (primary stakeholders) and those who are not engaged directly in transactions with the organisation but have the capacity either to influence or be affected by, the organisation (secondary stakeholders) (Clarkson, 1995); • between stakeholders and influencers, whilst acknowledging that some may be both (Donaldson and Preston, 1995);
• between normative stakeholders, derivative stakeholders and non-stakeholders, where o normative stakeholders are those towards whom the organisation has a moral obligation, or where there is an obligation of stakeholder fairness, over and above that due others simply by virtue of their being human; derivative stakeholders are those who have the capacity to affect or influence the normative stakeholders; and o non-stakeholders are those to whom the organisation has no stakeholder-based obligation, but to whom it may nonetheless have moral obligations (Phillips, 2003);
and finally between institutional stakeholders or organised groups representing a large number of interests with the technical expertise and resources to be effective participants, and local stakeholders, generally small groups or individuals with limited resources and organisational capacity to engage effectively in consultative processes and influence decision-making. (See McGlashan and Williams, 2003; see also Dunham et al, 2001 for a discussion of different definitions of ‘community’ within the context of stakeholder theory.)
As we develop our stakeholder analysis, these perspectives are all useful. Here, for the sake of generality, we adopt Bryson’s broader definition of stakeholder as including “any person, group or organisation that can place a claim on the organisation’s attention, resources or output, or is affected by that output” (Bryson, 1995: 27). In so doing, we acknowledge that this is a dynamic process and that the stakeholders of an organisation will change depending on the specific issue that is being addressed, the relationships between the different stakeholders and the processes of social change (see Cummings and Doh, 2000, Glicken, 2000).
4.2 Conducting a stakeholder analysis
Stakeholder analyses and stakeholder mapping can help organisations understand the environment in which they are operating, the key players in that environment and the interactions between them, the issues and values that are important to these players and, most importantly, what opportunities exist to mobilize their support. (see Brugha and Varvasovsky, 2000; Frost, 1994; Svendsen 2006; DSE, 2005; Bryson, 2004)
Stakeholder analyses should be undertaken for a purpose. The articulation of that purpose will help define who should be involved and how. These purposes are likely to include:
• access to knowledge and information,
• understanding values and positions,
• understanding networks of influence, and
• building support for the decision-making process and the decision outcome. Once the purpose or purposes have been identified, the first step in undertaking a stakeholder analysis and mapping process is to identify those stakeholders to be involved. Step 1 – Identifying stakeholders
It is critical that all stakeholders who have the potential to affect or may be affected by the policy, strategy or project are identified. In order to do this, it is possibly useful in the first instance to define the scope and type of stakeholders to be targeted.
• Is the scope local, national or international?
• What types of stakeholders should be included?
o those focussed on policy,
o those with a commercial interest in the issue,
o those with a public good interest?
• What types of information might be relevant – technical, environmental? Various processes are proposed in the literature for identifying stakeholders. We propose a two-step process that includes both internal list-building using a brainstorming process and snowballing based on external consultation.
Australian Centre of Excellence for Risk Analysis
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Stakeholder mapping for effective risk assessment and communication
An individual or a small planning group should initiate the process by brainstorming to create an initial list of people or organisations they think will be important to the effective implementation of the project, policy or strategy. The following questions are useful in building this first list.
• Who will be affected?
• Who has the power to influence the outcome?
• Who are the potential allies and opponents?
• What coalitions might build around this issue?
Other questions, adapted from the World Bank Source Book for Participatory Planning and Decisionmaking, that may be useful include:
• Are there people whose voices or interests in the issue may not be heard?
• Who will be responsible for managing the outcome?
• Who can facilitate or impede the outcome through their participation, non-participation or opposition?
• Who can contribute financial or technical resources? (World Bank, 1996)
The resulting stakeholder list (see Table 4.1 – Stakeholder Identification Template) is then used as the basis for a snowballing exercise whereby the project proponent contacts those on the initial list, explains the project’s purpose and asks them to identify others whom they think may have an interest. Where a stakeholder already on the list is mentioned, that should be noted on the corresponding box on the grid for that stakeholder. This will provide a basis for understanding the relative importance of the identified stakeholders in the eyes of other stakeholders.
It will also help in understanding relations between stakeholders. Where a new stakeholder is mentioned, this name is added to the list. This process may tend towards an over-representation of certain ‘coalitions of interest’. One way of balancing this is for the project proponent to prompt the interviewee, by suggesting a category of stakeholder or a specific organisation or individual. A different marker should be used for these ‘prompted’ nominees. The snowballing process should be continued until it is no longer rendering new names.
At this stage, it is useful to get together the initial planning group and categorise the stakeholder list by broad categories (e.g. government/government agencies, industry groups, NGOs, consumer groups, research institutes, etc). This process may identify new stakeholders and stakeholder categories that have no representation.
Within the business sector there are many standard stakeholder maps available that a company can use as a template to ensure that it has not neglected any key stakeholder groups (see Figure 4.1, also Wheeler and Sillanpaa, The Future 500, wwwfuture500.org).