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Stakeholders - Inclusion and Exclusion

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Traditional business ethics defined the purpose of a business solely in terms of satisfying the interests of the shareholders. But some businessmen wanted to recognize the legitimate interests of other groups of people; they started to use the term "stakeholder" rather than "shareholder". The similarity of the two words is deliberate: it draws attention to the substitution of a broader concept for a narrow one.

Thus use of the term stakeholder was originally to be inclusive rather than exclusive. It leads people to argue that companies should be run for the benefit of a range of stakeholders, including employees, customers, suppliers and neighbours, and not merely for the benefit of shareholders. Similarly, housing estates should be run for the benefit of the tenants, not just the landlords; schools for the benefit of pupils and parents, not just the convenience of teachers; and so on. Some politicians talk about a stakeholder society. To label a person or community as a stakeholder is to legitimize action intended for their benefit.

To the businessman who takes the concept of stakeholder seriously, what is important is not just the specific set of people who are named as stakeholders, but the ongoing mission to identify and include people who might otherwise be excluded. Similarly in politics, the stakeholder agenda indicates a desire to recognize the interests of the people who might otherwise be left out or disadvantaged.

However, some managers and analysts seem to regard the concept of stakeholder as exclusive. There is a closed list of stakeholders, drawn up at the start of a project, who may be consulted at various stages of the project. If you're not identified as a stakeholder, then your opinion doesn't matter. I deplore the exclusive use of the stakeholder concept.

For me, the stakeholder agenda entails a renewed attention on the processes associated with stakeholdership. Who looks after the stakeholder's interests, and how? Who legitimates new stakeholders?

Views of project

veryard projects > project management > project ethics > views of project

We may distinguish between (at least) four views of a project. There may be several conflicting versions of each project view. Thus a project may be described:

as perceived from within the client organization, at the time
as perceived by the client sponsor(s), at the time
as perceived by the consultant(s) at the time
as analysed retrospectively by the participants or independent observers

A project may appear to the clients to be following a particular sequence (one seeming logical to the clients), but the consultants may be carrying out additional steps, which are invisible to the client. For example, the consultants may have recognized a syndrome, and then formulated a hidden agenda, to get the organization to acknowledge this syndrome. Meanwhile, the sponsors may be carrying out adjacent complicating initiatives, of which the consultants have not been informed.

Concealment on both sides may be linked to commercial sensitivity. For example, it may be inappropriate for consultancy firms to have access to information concerning their competitors -- and this is particularly relevant where the consultants are bidding for other work.

This implies some moral issues on both sides: what (if anything) is it okay for the consultants to conceal from the sponsors? What (if anything) is it okay for the sponsors to conceal from the consultants? What obligations are there to conceal information from third parties? (Professional codes of conduct for consultants are more commonly discussed than those for the users of consultancy. Caveas Vendor Emptorem)

Often what the external consultants perceive as the whole project is perceived within the client organization as merely one part of the whole project. However, the consultants often need to question decisions taken before the consultants were invited in, and may also need to anticipate situations that arise after the consultancy assignment has been completed.

Similarly, where the project results in the creation of a reusable solution, or where knowledge is created that has commercial value elsewhere, there are questions of intellectual property rights. Are these questions merely contractual ones, or are there broader moral issues here? After all, the person (perhaps unwittingly) contributing knowledge to the project may not be a party to the consultancy contract, and may not even have a direct contractual relationship (such as full-time employment) with any of the parties to the consultancy contract. Knowledge appropriation may sometimes be exploitative.

“The question is not whether analysts should use persuasion in proposing new policy ideas, but which forms of persuasion may be used effectively and without violating basic principles of professional ethics.” [Giandomenico Majone, Policies as Theories (Omega: The international journal of management science, 1980 ?) - cited in Tomlinson & Kiss (eds), Rethinking the Process of Operational Research and Systems Analysis (Oxford, Pergamon Press, 1984) p 8]

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