Stakeholder Salience means:

1. How much Power the stakeholders have to influence the company
2. How Legitimate their relationship with the company is
3. How Urgent their claims are

stakeholdermap.com

The idea of Stakeholder Salience was introduced by Ronald K. Mitchell, Bradley R. Agle, and Donna J. Wood in a 1997 article for The Academy of Management Review. They came up with a Theory of Stakeholder Identification and Salience to address the confusion about who and what really counts in stakeholder management (Mitchell et al. 1997, p.853-854). Ronald Mitchell and his colleagues build on Freeman's (1994) idea of 'Who and What Really Counts'. They say we need a normative theory to figure out who should be considered stakeholders and a 'descriptive theory of stakeholder salience' to explain when managers consider someone as a stakeholder (Mitchell et al. 1997, p.853).

In other words, they said we need two things:

• A way to decide who should be a stakeholder
• A way to explain when managers see someone as a stakeholder

Definitions and Types of Stakeholders

There are different ways to define stakeholders. Some definitions are wide, others are narrow.

Wide definition:

Freeman (1984) says a stakeholder is anyone who can affect a company or be affected by it. This includes almost everyone.

Narrow definition:

Donaldson and Preston (1995) say stakeholders are people or groups with real interests in how a company works.

The narrow view says only people with valid claims on a company count as stakeholders. It understands that managers can't think about everyone all the time.

Most definitions focus on two things:

• Power: How much control a stakeholder has over the company
• Legitimacy: How valid the stakeholder's claim on the company is

Legitimate claims could be:

• Legal
• Based on contracts
• Moral
• Financial

Mitchell and his team noticed something missing in other definitions: urgency. This means how quickly stakeholders need attention.

They suggested a new way to identify stakeholders based on three things:

1. Power to influence the company
2. How valid their connection to the company is
3. How urgent their claim on the company is

They defined these terms:

Power: The ability to use force, money, or social standing to get what you want.

Legitimacy: When people think an action is right and proper based on social norms and beliefs.

Urgency: How quickly a stakeholder needs attention. This depends on time and how important the claim is.

From these ideas, they created a theory about stakeholder importance. They call this 'salience'.

Salience means how much priority managers give to different stakeholder claims.

Stakeholder Classes and Groups

The more attributes – power, legitimacy, and urgency – a stakeholder has, the higher their salience. In other words, the greatest priority will be given to stakeholders who have power, legitimacy, and urgency.

Power and legitimacy are connected, and the three variables can overlap. This combination creates seven different classes of stakeholders, which they illustrate using a Venn diagram. Adapted from Mitchell et al. 1997, p.873. Color not in the original.
A Stakeholder Salience Template in Word & Excel is available with the ebook
The seven stakeholder classes can be separated into three groups: Latent, Expectant, and High Salience. I have adapted the Salience diagram to highlight the three groupings.

The diagram below illustrates this – stakeholders with one attribute lack the two other attributes that would lend them enough rights, authority, voice, or exercise to be highly salient and so on. Red boxes indicate the attribute the stakeholder type has.

Grey boxes indicate an attribute the stakeholder lacks. The text in the grey boxes describes what the stakeholder would need to gain to be considered a Definitive Stakeholder.

Description of each Stakeholder type or class

Dormant Stakeholders

- Have power but lack legitimacy or urgency, so they have little interaction with the company.

Discretionary Stakeholders

- Often recipients of corporate philanthropy. Managers may choose to engage with them, but there is no pressure to do so. Examples are beneficiaries of charity.

Demanding Stakeholders

- Those with urgent claims but no legitimacy or power. They can be irritating but are not worth considering. Examples are people with unjustified grudges, serial complainers, or low-return customers.

Dominant Stakeholders

- Many theories position them as the only stakeholders of an organization or project. They likely have a formal mechanism acknowledging their relationship with the organization or project, e.g., Boards of directors, HR department, public relations.

Dangerous Stakeholders

– Those with powerful and urgent claims may use coercive and possibly violent tactics. Examples are employee sabotage or unlawful tactics used by activists. Mitchell et al. identify these stakeholders but don't require them to be acknowledged and thus awarded legitimacy (ibid, p.878).

Dependent Stakeholders

– Stakeholders who depend on others to carry out their will because they lack the power to enforce their stake. For example, local residents and animals impacted by the BP oil spill. Advocacy of their interests by dominant stakeholders can make them definitive stakeholders.

Definitive Stakeholders

- An expectant stakeholder who gains the relevant missing attribute. Often dominant stakeholders with an urgent issue or dependent groups with powerful legal support. Finally, those classed as dangerous could gain legitimacy, e.g., democratic legitimacy achieved by a nationalist party.

A key tenet of the Stakeholder Salience model is that it is dynamic. Mitchell et al. point out that the three variables can and will change (ibid, p.879). Dependent Stakeholders can become Definitive if their cause is picked up by a Dominant Stakeholder. Dominant Stakeholders can become Definitive if their legitimate stake becomes urgent, for example, a representative of a regulator may become a Definitive Stakeholder in the event of a complaint or inspection.

Why the Salience model is dynamic
The Salience model is dynamic because it accepts that:

1. Each of the three attributes or variables: power, legitimacy, and urgency can change.
2. The attributes are not objective they are based on human perception.
3. The stakeholder may or may not be aware that they possess a particular attribute or may not be willing or wish to act on that attribute.

Stakeholder Salience template

This template is free to copy, edit, and download. Feel free to try out the stakeholder salience model for yourself!

Use of the Stakeholder Salience model

Stakeholder Salience is a very useful addition to Stakeholder Theory. In addition to providing a model to help identify ‘who and what counts’ it can explain some stakeholder behavior. For example, people who have an issue that is urgent to them but don’t have any power or legitimacy are demanding. Those with power and legitimacy are dominant the team will report to them and defer to their direction.

The original 1997 article is not based on any empirical research, which is acknowledged on page 881. Instead, the authors' proposal relies on a literature review to draw out the three variables for determining Stakeholder Salience. In 1999 Agle, Mitchell, and Sonnenfield reported the results of a study conducted to empirically test the Salience Model's application to decisions made by CEOs. Their study reported in The Academy of Management Journal, 1999, Vol. 42, No. 5, 507 -525 supports the Stakeholder Salience attributes. See also Magness, V. Who are the Stakeholders Now? An Empirical Examination of the Mitchell, Agle, and Wood Theory of Stakeholder Salience.

Stakeholder Salience Resources

• Stakeholder analysis templates in Word, Visio, and Excel.
• Basic Stakeholder Analysis Method
• BPM Stakeholder Analysis
• Career Stakeholder Analysis
• Stakeholder Analysis - keeping stakeholders happy
• Stakeholder Analysis example
• Stakeholder Analysis Keyplayers
• Stakeholder Analysis Questions
• Stakeholder Salience
• Stakeholder Analysis Software
• Stakeholder Analysis Video

Sources used in this article