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Future Of Stakeholder Management Theory

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Discuss about the Future of Stakeholder Management Theory.



Effective stakeholder relationship management fosters positive relationship with the stakeholders through appropriately managing their agreed objectives and expectations (Schnackenberg and Tomlinson 2016). The corporate reputation of Volkswagen has damaged due to its car emission scandal in USA (BBC News 2015). The organization needs to regain and rebuild its relationship with the stakeholders for recapturing the market. The study will develop strategies for managing relationship with diverse stakeholder groups for addressing the scandal issue. The study will integrate the organizational objectives with stakeholder plan. Furthermore, the study will also outline the way for engaging and building mutually beneficial relationship with the stakeholders for scandal issue. Apart from that, the study will identify and respond to the problems and opportunities regarding the issues through environmental scanning and monitoring. A key message and massage matrix would also be framed for Volkswagen in this study for overcoming the emission scandal issue. Lastly, the study will select appropriate channels for engaging in long term relationship with relevant stakeholders.

Maintaining media relation is highly important for managing the public relation of an organization with the public as well as other stakeholders. According to Agudo?Valiente, Garcés?Ayerbe and Salvador?Figueras (2015), proper media relation spread positive image of an organization in the market. Therefore, Volkswagen should proactively and transparently communicate with the media rather than hiding their scandals. Moreover, the organization should hire a spokesperson for answering detailed inquiries of the media. Furthermore, the organization should quickly apologize to the media for their unethical carbon emission of the cars. On the other hand, Verbeke and Tung (2013) opined that showing concern for the public is the best way of managing relationship with the public and maintain corporate image. Therefore, Volkswagen should demonstrate core concern for the public and customers and promise to come up with better car model. It will manage effective media relationship of the organization after their scandal.


Strategies to Manage Relationship with Employees

Managing employee relation is the most important stakeholder relationship management activity for an organization, as they are the only responsible for building organizational success through using their talent. Bridoux and Stoelhorst (2014) pointed out that proper employee relationship management assists an organization towards getting high level of employee dedication for achieving organizational success. Volkswagen should immediate understand the understanding of the employees regarding the emission scandal. In this way, the management of the organization should compensate the employees for their harassment faced in the investigation. On the other hand, Steyn and Niemann (2014) opined that the employees should be provided with adequate value for managing positive relationship with them.  Moreover, the Volkswagen should allow the employees in organization decision making process for further actions to be taken in mitigating the impact of emission scandal. It will be keep the employees engaged in the organization having positive relationship with the management.

Community relationship is extremely significant for an organization in building corporate image in the society. Tantalo and Priem (2016) pointed out that organizations need to understand the perspective and expectation of community members from them for properly managing relationship with community. Moreover, Volkswagen should maintain transparency with the community people in regards to their business activities after their scandal has occured. It can also be important for the organization to provide donations for community development. It will mitigate the issues of community, which will help in building effective community relationship. On the other hand, Olkkonen and Luoma-aho (2014) opined that strong social message and event sponsorship is extremely important for building strong relationship with community people. Likewise, Volkswagen should also spread strong social message for overcoming the scandal and organization charity event for meeting the core needs of the community. It will manage community relationship of Volkswagen even after their emission scandal.

Henisz, Dorobantu and Nartey (2014) stated that organizations should continuously perform customer survey for assessing the needs and issues of the customers. It helps the organizations towards immediately resolving the customer issues before it becomes customer dissatisfaction. In this way, Volkswagen should use customer relationship management software for maintain relationship with the customers. Such software will help the organization in understanding the perspective, hassles and embarrassment of the customers, which they faced in emission scandal of the cars. Therefore, such software would help Volkswagen in accordingly plan and compensate the customers for their harassment for marinating effective customer relationship. On the other hand, Waligo, Clarke and Hawkins (2014) allowing customers in organizational decision making process also enhance customers’ worth, which facilitates in building effective customer relationship. Volkswagen should use social media for interacting with the customers and asking for any suggestions towards improving business and resolving the emission scandal. It will help the organization is maintaining effective relationship with the customers.

Strategies to Manage Relationship with Investors

O’Riordan and Fairbrass (2014) pointed out that organizations can effectively manage their relationship with their investors through communicating transparently with them. Volkswagen should first apologize to the investors for their emission scandal and huge business loss. Apart from that, the organization should also maintain transparency in the communication with the investors regarding their future business plan. On the other hand, Ayuso et al. (2014) pointed out that investor relationship can also be maintained through proper assurance of profit potentiality to the investors. Likewise, Volkswagen requires perfect financial projection showing profit potentiality to the investors, which would regain the investor’s confidence and maintain effective relationship with them.

According to Borgers et al. (2013), organization can maintain effective relationship with Government through timely payment of taxes and adhering to all legal contracts. In case of Volkswagen, the organization should first apologize to the government for their emission scandal. Furthermore, the organization should submit all quarterly reports, stories, trial metrics and future plan on regular basis to the government for regaining the trust of Government and maintain effective relationship with them.

The objective Volkswagen is to regain and rebuild its corporate image in the market after its emission scandal. Strategies for media and community management would help the organization in achieving this business objective (Zerfass and Schramm 2014). Moreover, proper explanation and promise for business improvement in to the media and community would spread strong social message of the organization. It would help in rebuilding and regaining the corporate image in the market. Apart from that, the objective of the organization is also to regain the customer trust for enhancing sales of cars and market capitalization. In such situation, proper employee relation will help in dedication level of the employees and manufacture cars with new models for regaining the trust level of the employees.

The business objective of the organization is also to enhance the stock price of the organization immediately. Therefore, maintenance of investor relationship will facilitate Volkswagen in enhancing the stock price through regaining the trust of the investors. The organization is highly inclined towards enhancing its market capitalization through increased car sales (Doh and Quigley 2014). In such extent, the proper customer relationship management will regain the trust of the customers and encourage them towards purchasing their cars. It will ultimately enhance the sales volume and market capitalization of the organization. The business objective of Volkswagen includes mitigation of legal complications for regaining competition position in the market. In such situation, maintaining government relationship will help the organization in overcoming all the legal complications through meeting all the government contracts.


Engagement and Mutually Beneficial Relationship with Stakeholders

As per Pitsis et al. (2014), Volkswagen can best overcome the issues of their car emission scandal through engaging and building mutually beneficial relationship with the stakeholder groups. While considering the mutually beneficial relationship with the media groups, it can be said that the organization should engage an authoritative spokesperson for answering all the questions of the Medias. In this way, the media channels will get the scope of publishing new interesting news in their channels and the organization will get the scope of clarifying their perspective on their scandal for resolving the issues. On the other hand, the organization can allow the employees in organizational decision making process for getting ideas of resolving emission scandals. It will enhance the value of the employees in the organization and new and effective ideas for resolving emission scandals. Fair return on investment to the investors will be beneficial for the investors on their investment (Ortiz?de?Mandojana and Bansal 2016). It will also help the organization in gaining huge investment from the investors towards enhancing financial sustainability.

In case of community, the organization can provide donations for community development for making mutually benefit with the community people. Such donations will on the one hand, will develop the community, whereas, on the other hand, will rebuild corporate image of the organization in the society. The organization can compensate the harassment and hassles of the customers for their cars having high emission system. Moreover, the organization can offer attractive discounts and offers to the customers for their further car models. It can reduce the cost of car purchase of the customers and also help organizations in enhancing their car sales volume.

Identification and Respond to Problems and Opportunities

Volkswagen can effectively identify the issues and opportunities related to the scandals through PEST and SWOT environment scanning. In this way, the organization can also better resolve the issues through utilizing their opportunities towards mitigating issues.

PEST Environment Scanning

Problems and Opportunities

Response to Problems and Opportunities


·       Lose of political support for emission scandals

·       Many trade restrictions has also imposed on Volkswagen

·       Strict environmental law of USA has mostly created such emission scandals of the organization

·       Political stability of USA can be favorable for quickly resolving the issues

·       Volkswagen should immediately apologize to the government for gaining the sympathy of Government

·       The organization should meet all the imposed government contracts for gaining government trust

·       With the opportunity of government stability, the organization can immediately resolve their scandal issues through meeting all the fines imposed on them


·       Developed economic condition of USA can lead to quick return on investment for resolving the issues

·       The scandal issues has led to huge economic loss of the customers

·       The organization should immediately compensate the damages of the stakeholders for re-establishing corporate image in economically developed market


·       Growing inclination of people towards environment friendly cars can be issues for Volkswagen towards resolving issues

·       Enhanced disposable income of the people can be opportunity for the organization

·       The organization should immediately re-launch environment friendly cars, which have high potentiality of sales to the economically sound customers. 


·       Technological advancement of USA can be an opportunity for resolving emission scandals immediately

·       With advancement technological advancement, the organization can immediately manufacturing environment friendly cars for resolving emission scandals

·       Advanced digitalization can help Volkswagen in better interacting with stakeholders for resolving the issues

Table 1: Identification and Response to Problems and Opportunities through PEST

(Source: Hahn 2015)

SWOT Environment Scanning

Problems and Opportunities

Response to Problems and Opportunities


·       Strong brand presence or loyalty

·       Wide ranges of cars

·       Presence in hybrid cars

·       Excellent advertising and marketing

·       Strong brand loyalty and wide range of cars can help Volkswagen in quickly regaining customer trust even after emission scandal

·       The presence of hybrid cars can immediately resolve emission scandal

·       Excellent advertising can help the organization in properly interacting with stakeholders for resolving emission scandal issue


·       Fraud and controversy of emission scandal has damaged global brand image

·       Effective media relation and customer relationship can help in quickly regaining the brand image


·       Regaining customer trust and maintaining long term relationship with stakeholders

·       Continuous improvement on car’s technology

·       Long term stakeholder relationship and continuous improvement of car technology will ultimately mitigate scandal issue


·       Changing government rules and policies

·       Increasing cost of renewable energy

·       Alignment with changing government rule and regulations

·       Optimum usage of renewable energy in hybrid cars with improved technology

Table 2: Identification and Response to Problems and Opportunities through PEST

(Source: Helmig, Spraul and Ingenhoff 2016)


Key Message and Message Matrix


Media, customers, investors, employees and Government

Main Concern

To have environment friendly rides with luxurious comfort

Message 1

The cars of Volkswagen will have less car emission while driving

The cars will be manufactured with improved emission free car technology

Message 2

Purchasing Volkswagen cars will be a great step towards environmental concern

The cars will emit 25% less carbon than previous cars and have premium looks and comfort

Message 3

Purchase Volkswagen cars and make emission free rides

Less emission will protect environment from carbon footprint

Table 3: Message Matrix

(Source: Created by Author)

Channels to Engage in long-Term Relationship with Stakeholders

According to Colleoni (2013), social media is an effective business communication channel, which helps in communicating communication message through online community. It is the quickest form of communication channels for communicating message to wide stakeholder groups. Therefore, Volkswagen should use social media channels for communicating their key message to the stakeholder groups. The organization can effectively get feedback of their communication message from their stakeholders in such social media channels. In this way, social media channels can be effectively used as communication channel for Volkswagen towards building long term relationship.

Doh and Quigley (2014) pointed out that mass media is the best communication channel towards communicating with mass stakeholder groups. Moreover, organizations can best reach out to mass stakeholder groups in an effective way. Therefore, Volkswagen can reach out to mass stakeholder groups within shortest period. In this way, the organization can reach vast majority of general public and other stakeholders towards making long term relationship with them.

Newspaper and magazines are the most common way of reaching out to important stakeholders and making long term relationship with them. Therefore, Volkswagen should use newspaper and magazines for communicating their key message after their scandal. The appealing manner of the communication content in the newspaper and magazines would make positive and long term relationship with the stakeholders.

Corporate sponsorship is an effective communication tool towards to fostering positive public relation. Sponsoring any event in the community regarding any social issue can build the corporate image among the stakeholders (O’Riordan and Fairbrass 2014). Therefore, Volkswagen can effectively use corporate sponsorship for communication with the community people and other stakeholders. In this way, enhanced interaction with the community people and other stakeholders through corporate sponsorship build long term relationship with the stakeholders.



While concluding the study, the car emission scandal of Volkswagen is forcing it towards developing effective strategies in rebuilding and regaining the trust of the stakeholders. The organization should apologize and answer sincerely to media for their scandal. The organization can also manage its employees and customers through compensating for their harassments and hassles of the cars having high carbon emission. Offering discounts to the customers would regain the loyalty level of the customers by providing extra benefits. Furthermore, the organization can offer donations for community development, which can build mutually beneficial relationship with the community development for community and enhanced corporate image for the organization. Volkswagen should come up with the key message like it will renovate its cars with luxurious comfort and less carbon emission. It should communicate and manage long term relationship with the stakeholders.


Reference List

Agudo?Valiente, J.M., Garcés?Ayerbe, C. and Salvador?Figueras, M., 2015. Corporate social performance and stakeholder dialogue management. Corporate Social Responsibility and Environmental Management, 22(1), pp.13-31.

Ayuso, S., Rodríguez, M.A., García-Castro, R. and Ariño, M.A., 2014. Maximizing stakeholders’ interests: An empirical analysis of the stakeholder approach to corporate governance. Business & society, 53(3), pp.414-439.

BBC News. 2015. Volkswagen: The scandal explained. [online] Available at: [Accessed 19 Nov. 2017].

Borgers, A., Derwall, J., Koedijk, K. and Ter Horst, J., 2013. Stakeholder relations and stock returns: On errors in investors' expectations and learning. Journal of Empirical Finance, 22, pp.159-175.

Bridoux, F. and Stoelhorst, J.W., 2014. Microfoundations for stakeholder theory: Managing stakeholders with heterogeneous motives. Strategic Management Journal, 35(1), pp.107-125.

Colleoni, E., 2013. CSR communication strategies for organizational legitimacy in social media. Corporate Communications: an international journal, 18(2), pp.228-248.

Doh, J.P. and Quigley, N.R., 2014. Responsible leadership and stakeholder management: Influence pathways and organizational outcomes. The Academy of Management Perspectives, 28(3), pp.255-274.

Hahn, T., 2015. Reciprocal stakeholder behavior: A motive-based approach to the implementation of normative stakeholder demands. Business & Society, 54(1), pp.9-51.

Helmig, B., Spraul, K. and Ingenhoff, D., 2016. Under positive pressure: How stakeholder pressure affects corporate social responsibility implementation. Business & Society, 55(2), pp.151-187.

Henisz, W.J., Dorobantu, S. and Nartey, L.J., 2014. Spinning gold: The financial returns to stakeholder engagement. Strategic Management Journal, 35(12), pp.1727-1748.

O’Riordan, L. and Fairbrass, J., 2014. Managing CSR stakeholder engagement: A new conceptual framework. Journal of Business Ethics, 125(1), pp.121-145.

Olkkonen, L. and Luoma-aho, V., 2014. Public relations as expectation management?. Journal of Communication Management, 18(3), pp.222-239.

Ortiz?de?Mandojana, N. and Bansal, P., 2016. The long?term benefits of organizational resilience through sustainable business practices. Strategic Management Journal, 37(8), pp.1615-1631.

Pitsis, T.S., Sankaran, S., Gudergan, S. and Clegg, S.R., 2014. Governing projects under complexity: theory and practice in project management. International Journal of Project Management, 32(8), pp.1285-1290.

Schnackenberg, A.K. and Tomlinson, E.C., 2016. Organizational transparency: A new perspective on managing trust in organization-stakeholder relationships. Journal of Management, 42(7), pp.1784-1810.

Steyn, B. and Niemann, L., 2014. Strategic role of public relations in enterprise strategy, governance and sustainability—A normative framework. Public Relations Review, 40(2), pp.171-183.

Tantalo, C. and Priem, R.L., 2016. Value creation through stakeholder synergy. Strategic Management Journal, 37(2), pp.314-329.

Verbeke, A. and Tung, V., 2013. The future of stakeholder management theory: A temporal perspective. Journal of Business Ethics, 112(3), pp.529-543.

Waligo, V.M., Clarke, J. and Hawkins, R., 2014. The ‘leadership–stakeholder involvement capacity’nexus in stakeholder management. Journal of Business Research, 67(7), pp.1342-1352.

Zerfass, A. and Schramm, D.M., 2014. Social Media Newsrooms in public relations: A conceptual framework and corporate practices in three countries. Public Relations Review, 40(1), pp.79-91.


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