CHAPTER 2

Issue and Stakeholder Influence

Stakeholder influence shapes the significance, texture, and understanding of issues. Heath (Heath 1994; Heath and Palenchar 2009) defines stakeholders as “any persons or groups” that intrinsically possess “value” to the organization or who “have a stake” in organizational operations (Heath, p. 55). He differentiates between internal and external constituencies, contending that external constituencies include persons such as shareholders, customers, media, and advertising and marketing agencies. Heath (1988, p. 1) maintains that an organization deemed successful maintains and defends its “position” in the public sphere with internal and external stakeholders who render judgments on organizational effectiveness in the marketplace. The traditional concept of the stakeholder continues to expand with emerging communication technologies that shift the conversation on issues from central places of discussion to organizational cyberspace (Luoma-aho and Vos 2010; Stacks 2017). Stakeholder influence on organizational communication drives leadership practices that seek to clarify and discern issues. Stakeholder influence, and its relationship to issue, is elucidated in three key sections:

Stakeholder influence shapes Timothy Sellnow’s description of discernment and responsiveness in risk and crisis communication. Robert R. Ulmer¹ and Sellnow articulate the role of stakeholder influence on public discourse before, during, and after crisis. Organizations, according to Ulmer and Sellnow (2002), must develop and sustain “reservoirs of good will” with internal and external stakeholders, managing escalation of issues in their movement into argument, then to conflict, and finally to crisis. Stakeholders actively influence organizational health through articulation of their perception of organizational communication. Maintaining relationships between organizations and stakeholders is performative, influencing the construction of stakeholder identity in relation to recognized interests of organizations and constituencies. Interests manifest themselves through stakeholder participation in the marketplace. The active emergence of stakeholder interests necessitates leadership responsiveness in the safeguarding of stakeholder concerns. Stakeholder influence permits leadership practices to actualize potential opportunities in the marketplace.

Performative Content: Stakeholder Definition

Stakeholder identity develops rhetorically in communicative encounters between organizations and their internal and external constituencies. The relationship between issue and stakeholder is dependent upon an organization’s ability to attend to concerns raised by publics (Heath 1988, p. 277). For Heath, the precondition of leadership is the identification of “key stakeholders,” understanding particularities of stakeholder identity, and strengthening the relationships between organizations and their constituencies. Through identification of key stakeholders, practitioners and leaders respond to contextual evidence that lends clarity to issue saliency. According to Heath, however, organizations need to understand their role in the marketplace as they identify and respond to stakeholder influence. Stakeholder opinions affect corporate success in organizational decision making. Public opinions asserted by stakeholders on key issues influence organizational responses.

This section, “Performative Content: Stakeholder Definition,” considers the unification of stakeholder influence, issue clarity, and definition through (1) communicating, (2) uncovering, and (3) monitoring. These crucial communicative practices demonstrate the nature of the relationship between organizations and stakeholders, lending insight into the necessity of clarifying issue saliency. Stakeholders influence the escalation of crisis through communication; leadership shapes stakeholder identity by uncovering prominent issues and monitoring influential publics with genuine attentiveness.

Issue and Stakeholder Influence: Communicating

Stakeholder identity and influence arise in communication between and among internal and external constituencies. Heath (1988, p. 387) defines “stakeholder” as “a targeted audience, one with whom the company wants to communicate.” His definition reflects the theoretical work of R. Edward Freeman,² who was responsible for articulating the strategic component of stakeholder identification in corporate communication practices. Freeman (2010, p. 8) situates the emergence of the term “stakeholder” in 1963 in the midst of a “turbulent” external environment. He argues that this marketplace experienced such extraordinary internal and external change that traditional ways of managing became obsolete. From this environment came strategic management, responsive to stakeholders by allowing and encouraging communication in the marketplace. Freeman differentiates between internal and external stakeholders; he conceptualizes “internal stakeholders” as those “internal groups” who act as “conduit[s]” through which “managers can reach other external stakeholders” (p. 219). The external environment, or the “public,” is the marketplace, comprised of vested parties that influence the organization. Stakeholders communicate issue significance, which necessitates organizational responsiveness.

Stakeholder expectations and influences drive issue clarification and discernment. Freeman (2010) argues that stakeholders demand the opportunity to “routinely surface” concerns, resulting in a communicative “transaction” of information between organizations and constituencies. These transactions permit the identification and clarification of issues as they come into focus in the public sphere. In a globalizing marketplace, shifting communication technologies allow for the communication of concerns in a multitude of public spaces. This surfacing of interests involves a communicative encounter between organization and stakeholder over issues that matter to certain groups of constituencies with diverse interests. Organizations uncover emerging issues that could possibly be evolving problems/opportunities and then address these concerns and needs articulated by influential stakeholders.

Issue and Stakeholder Influence: Uncovering

Communication between and among internal and external constituencies illuminates the origins of issues by revealing stakeholder opinion in public deliberation. Internal constituencies, as Freeman (2010) articulated, are responsible for uncovering issues discussed in external environments. Grunig and Repper (1992) argue that theories of strategic management emphasize attentiveness to the external environment, calling for an organizational mission to be adaptable in uncovering and responding to stakeholder issues. Organizations are responsible for identifying problems/opportunities communicated by influential stakeholder constituencies. The fundamental task of organizational communication, then, is to uncover the identity of stakeholder issues, yielding overt and tacit consequences for organizational health in the marketplace.

Uncovering is a reciprocal form of communication, requiring the participation of internal and external constituencies that exert influence on one another. Without understanding stakeholders, organizations cannot effectively implement “strategic business planning” (Heath 1988, p. 274) Organizations acknowledge public opinion in the marketplace, which assists in identifying relevant issues. Grunig and Repper argue that one cannot generalize stakeholders, as each opinion segment forms a position on issues that impact and influence an organization. Grunig and Repper also argue that publics/stakeholder constituencies “organize around issues and seek out organizations that create those issues” (pp. 127–128) Stakeholder groups then actively communicate and uncover issues relevant to the organization. These varied groups bring to the surface the issues tied to certain interests affecting the organization. As organizations monitor prominent stakeholder issues, they discern the implications of issues that require ongoing monitoring and attentiveness.

Issue and Stakeholder Influence: Monitoring

Stakeholder identity and issue clarity necessitate ongoing monitoring. Otherwise, issues within the public sphere inevitably escalate. Monitoring is a communicative practice that attends to deliberation in public spaces, ever alert to stakeholder opinions. Stakeholder opinions appear through the interaction of a multitude of sources. Stakeholder opinion identifies a myriad of issues that are potential problems/opportunities. For Wartick³ and Rude (1986, p. 137), monitoring is a process of attending to external environments, “evaluating the importance of issues” while discerning potential performative responses—sometimes known as “environmental scanning.” Grunig offers environmental scanning as a careful system of monitoring the external environment where stakeholders raise issues in various arenas and areas. Uniting preemptive identification and organizational responsiveness, Wartick and Rude argue that the process of monitoring identifies issues weighted with public sentiment. Monitoring issues is a stakeholder-centered practice in strategic corporate communication, pinpointing the mutual importance of organization and stakeholder interaction in marketplace effectiveness. Monitoring is a communicative activity that discerns the inviting or threatening pulse of an issue, yielding future organizational problems/opportunities. Issue and stakeholder clarity uncover the origins of issues in the public sphere through attentiveness to public deliberation.

Summary

The scholarly insights of Freeman, Grunig and Repper, and Wartick and Rude elucidate the influence of stakeholders over organizational health and issue clarity in the external marketplace. This section considered stakeholder influence and identity in three components:

Stakeholder influence and organizational responsiveness converge in a communicative process of identifying shared stakeholder interests, issues, and identities. Heath and Bryant⁴ (2000, p. 269) argue that stakeholders identify with organizations when they discern similar opinions on issues and interests within organizational practices. Identification between internal and external stakeholders necessitates discernment of actual issues that are relevant to stakeholders. Effective organizational responsiveness identifies stakeholder interests that exert influence on organizational well-being. Issue and stakeholder identity and discernment create opportunities for leadership: communicating about issues, uncovering hidden questions and disputes within the marketplace, and monitoring constituency responses.

Theory and Strategy: Issue and Stakeholder Discernment

Theoretical approaches to organizational communication invite textured understandings of stakeholder influence on issue discernment in the public sphere. A one-sided construction and dissemination of messages by organizations to stakeholders omits the communicative nature of issue discernment and stakeholder interest identification. Discerning interests of stakeholders is a matter of responding to and participating in the communicative environment, attending to stakeholder concerns that appear in communication between organizations and stakeholders. Organizations are responsible to and must account for stakeholders through corporate communication practices, discerning issue specificity for varied constituencies. Heath (1994) argues that strategic approaches to stakeholder and issue responsiveness create community between organizations and stakeholders, requiring constant negotiation of meaning and communication about issues. Problematic implications of issues escalate when organizations forgo negotiation and communication, demonstrating a lack of recognition of issues and interests important to stakeholders in the marketplace.

This section elucidates the unification of organizational interests about issues tied to stakeholder discernment through three significant contributions: (1) issue arenas, (2) agenda setting, and (3) negotiation. These contributions inherently uncover the communicative nature of stakeholder interests and issue discernment. Spaces of public deliberation increasingly shift to places outside of organizational control, to the external environment. Contemporary corporate communicative practices reflect the overwhelming impact of shifting communication technologies on issue and interest discussion.

Issue and Stakeholder Discernment: Issue Arenas

New communication and media technologies increasingly complicate the corporate communication practice of monitoring. The prevalence of external public places where deliberation and issue definition occur necessitates constant negotiation of stakeholders’ interests and issues. The term “issue arena,” a theoretical construct from scholars Luoma-aho and Vos (2010), reflects the shift of interest in “interactions” between stakeholders and organizations to places outside of immediate control, such as cyberspace. Issue arenas come from a lineage of theoretical frameworks within the field of communication. Vos and Luoma-aho point to Goffman (1959)⁵ as the concept’s originator, arguing that his “language of drama” characterized public and organizational life where individuals present and stage themselves in public settings. In a similar manner, Luoma-aho and Vos (2010, p. 318) note that organizations “aim to present their best assets” through communicative activities such as impression management and framing. These communicative behaviors create spaces for negotiating, deliberating, and debating the meaning of issues relevant to stakeholder interests.

In the 1970s, scholars like Maxwell McCombs⁶ and Donald Shaw⁷ considered media “agenda setting” as a venue for public and stakeholder deliberation. Luoma-aho and Vos (2010) note that mass media influence began to push issue and interest discussion outside of organizational environments into the public sphere. They go on to argue that, in the current marketplace, organizations survive when they properly identify relevant issues discussed in issue arenas, which are places of participation in and “enactment” of issue and interest discussion (p. 319). Issue arenas are “outside the organization’s control,” making it necessary to implement corporate communication that enhances issue discernment. Spaces for public deliberation require attentiveness to stakeholder opinion and interests. Organizations monitor traditional and/or virtual spaces, privileging emerging issues over organizational goals. Online media, social media platforms and networks, telecommunication, and traditional media such as television, newspaper, and radio offer examples of issue arenas where individuals participate in public discourse and debate centered on stakeholder interests and issues. This emphasis on media as primary influencers over issue arenas yields implications for stakeholder influence and interests in determining issue importance in the public domain.

Issue and Stakeholder Discernment: Agenda Setting

In the process of identifying stakeholder issue arenas, “agenda setting,” as proposed by McCombs and Shaw in 1972, provides a lens for mediating issue and discourse via communication technologies. Mediating communication technologies shift communication between organizations and stakeholders to multiple places and spaces within the public domain. Agenda Setting Theory provides renewed capabilities of accounting for a changing media-ecological landscape, and McCombs and Shaw’s landmark work focuses upon the power of mass media to influence public opinion and political campaigns.

Agenda Setting Theory arose from a study conducted at the University of North Carolina, Chapel Hill, as the authors examined the relationship between what voters contended were key issues of the 1968 presidential campaign and the delivery of mass media content. Their findings demonstrated a high correlation between voter opinion and mass media content. The study demonstrated that mass media acted as the “major primary sources” for “national political information” (McCombs and Shaw 1972, p. 182). Since this study, communication theorists have worked within this theory to argue that mass media act as primary sources for information. The process of agenda setting accounts for the role of new communication technologies on discerning issue and stakeholder opinion. These new communication technologies in cyberspace open public spaces for external debate and deliberation, which influences stakeholder interests. Agenda setting is a communicative tool of organizations within a contemporary marketplace. Agenda Setting Theory suggests that stakeholders interpret and derive meaning from prominent third-party sources. Issue arenas and mass media agenda setting are powerful communicative resources for stakeholders in the identification of issues. To succeed, organizations need to be alert to external influences as they negotiate the meaning of problems/opportunities with and for internal and external constituencies.

Issue and Stakeholder Discernment: Negotiation

Negotiation is a fundamental step in discerning problems/opportunities, acknowledging the roles of both the stakeholder and the organization in an attempt to reach mutually creative solutions. The interpretation of issue is the starting point of negotiation, where internal and external constituencies offer meaning to emerging issues through the formative force of human communication. Tom Watson,⁸ Steven Osborne-Brown, and Mary Longhurst warn against an approach to negotiation that simply informs stakeholders of plans to discern issues while lacking acknowledgment of public “concerns” (Watson, Osborne-Brown, and Longhurst 2002). They define this as an Issues Management approach lacking a dialogic emphasis. They counter this approach with an extension of Issues Management known as “Issues Negotiation,”^TM a process of dialogue between organizations and stakeholders regarding the experience of issues within and outside of an organization. There are five stages in Issue Negotiation:

Each stage highlights the importance of negotiating meaning and viewpoints in conversation between organizations and stakeholders in the issue arenas that are causing concern. This negotiation permits discernment of significant issues between and among differing interests. Emerging communication technologies and new media complicate the communicative process of negotiation, obscuring the clarity of issues in the public sphere and effectively curtailing issue discernment through unreflective human bias and agenda-setting behaviors. These behaviors invite renewed discussion of issue deliberation and discernment in the public sphere, attending to issue arenas, agenda setting, and the implications of negotiated shared meaning.

Summary

The pragmatic ideas of Vos and Luoma-aho, McCombs and Shaw, and Watson, Osborne-Brown, and Longhurst elucidate the influence of stakeholders over public deliberation on issues and interests. This section centered on three major considerations:

Stakeholder interests and discernment surface in theoretical frameworks accompanied by supportive communicative practices. Competing media that mix the traditional and the social technologies wrest places of public deliberation from organizational control to external environments, necessitating continuous negotiation of meaning through outside influences that impact stakeholder response and discernment of salient issues. Leadership enacts considerate and thoughtful communicative behaviors that attend to a variety of influential sources on stakeholder discernment and interests. Responsive leadership is a fundamental component in the identification, maintenance, and care for issue discernment within the public marketplace.

Leadership: Issue and Stakeholder Responsiveness

Internal dialogue within organizations concerning stakeholder influence and issue discernment privileges leadership practices; leadership, not media, sets the agenda for internal and external constituencies. Consequently, assessing issues is important for tactical strategic corporate communication. Organizations meet the “demands of today’s society” through an open dialogue between and among internal and external constituencies, addressing issues, concerns, and opportunities (Watson, Osborne-Brown, and Longhurst 2002). Communication technologies shift places of public deliberation to spaces where organizations monitor, uncover, and respond to issues strategically. Heath focuses on a “meaning-centered” approach to organizational communication that inherently takes account of the ties between organizations and stakeholders. Heath (1994) argues that humans desire to “make sense” of public experiences and share in stakeholder identity. He contends that, through “meaningful, interpretative frames,” individuals “define” experiences and respond to issues and interests while participating in public deliberation. Organizations are meaningful entities where stakeholder problems/opportunities arise in communication, requiring the act of framing, which clarifies and discerns issue and stakeholder interests. Framing meaning is an act of leadership responsiveness, acknowledging stakeholder influence and identity.

This section examines framing opportunities and communicative practices through: (1) opportunity, (2) implementation, and (3) leadership in action. These communicative activities illuminate the necessity of discernment and responsiveness to issues, ever attentive to stakeholder influence and multiple constituencies.

Issue and Stakeholder Responsiveness: Opportunity

Communicating, monitoring, and uncovering issues raised by stakeholders necessitate leadership responsiveness to issues and interests of stakeholders, framing them appropriately as problems/opportunities. Richard Crable⁹ and Steven Vibbert work within a rhetorical/media-ecological approach to understanding issues that permit public discussion of problems/opportunities between and among internal and external stakeholders. Organizations, according to Crable and Vibbert (1985), communicate extensively when issues emerge, and they respond to stakeholder influence. Communicative responses to problems/opportunities arise during communicative activities: monitoring emerging issues and uncovering stakeholder interests. Crable and Vibbert articulate that not all issues escalate; not all maintain the same level of significance. The “task” of the “issues manager” is to uncover perceived significance of an issue and then employ communicative actions that appropriately assist the response to a given problem/opportunity (p. 5).

Issues managers monitor the external environment to discern potential moments of escalation. Crable and Vibbert (1985) advocate that organizations and leadership are responsible for responding to issues as problems/opportunities primarily as they morph into conflict and potential crises. Leaders respond to social forces within an agenda-setting environment, discerning significant stakeholder interests as issues are framed for further deliberation. Leadership implements various communicative activities or tactics that uncover and monitor public external discussion by stakeholders. Implementation strategies require framing by a leadership that both monitors and responds to internal and external environments.

Issues and Stakeholder Responsiveness: Implementation

Framing implementation of issue responsiveness is a communicative deliberation, not merely an execution of procedure, and is driven contextually by the environment, stakeholder and other constituencies, and leadership. Framing corporate communication practices is a leadership responsibility that notes the influence of new and emerging communication technologies. McCombs and Shaw (1972) reflect that media decide on issue importance by choosing to disseminate particular pieces of information, which then influence public opinion. Fairhurst and Linda Putnam ¹⁰ argue that discourse shapes organizations in ongoing sensitivity to the environment.¹¹ The organization, according to Fairhurst and Putnam (2004), interacts with stakeholders, an interaction which functions as a form of organizational legitimation. The relevancy of an organization emerges in stakeholder relationships, interactions, and perceptions.

Fairhurst and Putnam articulate that leadership recognizes the power of discourse in constructing organizations, examining the influence of discourse through a stakeholder perspective. Leadership requires a discernment of external public deliberation on interests and issues. Discourse permits negotiation of meaning along with attention to communication technologies and space for public deliberation. Fairhurst and Putnam’s examination of discourse further illuminates the metaphors of issue arenas and negotiation. Discourse in an external environment invites organizations and stakeholders to negotiate meaning and interpretations derived from third-party sources. The process of framing discourse invites continued commitment to leadership and stakeholder engagement in the marketplace.

Issue and Stakeholder Responsiveness: Leadership in Action

Issue prominence between and among internal and external stakeholders arises in multiple places of public contest, debate, deliberation, and discourse. Heath and Palenchar (2009, p. 82) warn that “no organization can identify, track, and respond to every issue.” They argue that media serves a role in “reflect[ing]” the public opinion emerging through a multitude of sources. Media highlights particular information and offers differing opinions, creating a “multitiered society of different and conflicting zones of meaning” (p. 271). A leader’s ability to discern issues begins with two fundamental points of recognition:

Leadership attends to the discursive construction of organizations and recognizes the power of organizations in the pragmatics of everyday life. Framing requires the commitment of leadership and the participation of stakeholders to uncover issue meaning in the marketplace.

The insights of Crable and Vibbert, Fairhurst and Putnam, and Heath and Palenchar elucidate the influence of leadership receptiveness in the meeting of potential problems/opportunities that can escalate if thoughtful response is lacking. This section centers on three major considerations:

Chapter Summary

Stakeholder influence is a crucial component of uncovering organizational effectiveness in the public marketplace. Successful organizational decision making is a discursive process of monitoring competing stakeholder interests that surface within issue arenas addressing problems/opportunities. Vennette,¹² Sellnow, and Lang (2003) argue that inadequate “communication surrounding crises” significantly increases the reality of “competing versions of organizational failures and causes” (p. 219). Unrecognized communication and discourse surrounding a given issue escalates into conflict as it generates dissonant issues composed of competing social concerns. The mark of a successful organization is responsiveness to stakeholder influence: the organization protects and promotes its organizational goals while simultaneously acknowledging stakeholder interests and concerns, ever alert to the inevitability of future problems/opportunities.

Chapter 2, “Issue and Stakeholder Influence,” illustrates the interplay of issue recognition and action and multiple constituencies/stakeholders whose interests shape their standpoint or manner of understanding the importance and indeed the severity of a given issue. The reality of stakeholders not concurring with one another about the validity and importance of a given issue defines what is now known as the 2010 Deepwater Horizon disaster (for example, see Figure 2.1).

Chapter 3, “Communication Ethics in Action: BP and Issue Thoughtlessness,” begins our connection of strategic theory to a tragic event that influenced the entire energy industry and stakeholders, whose lives were disrupted and in too many cases torn asunder.

Figure 2.1 Issue: The Origin of Crisis

¹ Robert R. Ulmer is dean of the Greenspun College of Urban Affairs at the University of Nevada, Las Vegas. A nationally recognized scholar and expert in crisis communication, Ulmer has coauthored six books and has written dozens of articles on crisis responsiveness.

² R. Edward Freeman is the scholar responsible for articulating strategic management through a stakeholder approach. Although written for the 1980s business marketplace, Freeman’s work continues to resonate today.

³ Steven L. Wartick is professor of management at the University of Northern Iowa. He has published on issues management, corporate social responsibility, and strategic issues analysis.

⁴ Jennings Bryant is professor emeritus at the University of Alabama. He has authored, coauthored, or edited 27 books, 77 book chapters, and 78 articles on communication, mass communication, and media effects on communication.

⁵ Erving Goffman is one of the most influential scholars in the field of sociology. His most influential work is The Presentation of Self in Everyday Life. In 2007, the Times Higher Education Guide named him the sixth most cited scholar in the humanities (https://timeshighereducation.com/news/most-cited-authorsof-books-in-the-humanities-2007/405956.article?storyCode=405956&sectioncode=26).

⁶ Maxwell E. McCombs, professor emeritus at the University of Texas at Austin, was awarded the 2011 Helen Dinerman Award for scholarship by the World Association for Public Opinion Research. He is known for his work on agenda setting, along with articles and books on political communication and journalism.

⁷ Donald Shaw, professor emeritus at the University of North Carolina at Chapel Hill, was awarded the 2011 Helen Dinerman Award for scholarship by the World Association for Public Opinion Research. He is known for his work on agenda setting, along with various articles and books on journalism, history, and communication theory.

⁸ Tom Watson is a professor of media and communication at Bournemouth University, UK, researching extensively in the history of public relations, corporate social responsibility, and reputation. Steven Osborne-Brown is a PR professional based at Hallmark Public Relations in Winchester, UK. Mary Longhurst is a PR professional at Hallmark Public Relations. She is based in Bournemouth, UK.

⁹ Richard E. Crable is associate professor of communication at California State University. He has published in public relations, argumentation, and organizational communication. Stephen L. Vibbert publishes in public relations, rhetoric, and organizational communication.

¹⁰ Linda Putnam is research professor emeritus, Department of Communication at University of California, Santa Barbara. The bulk of Putnam’s research focuses on negotiation and conflict management, organizational discourse, and small-group communication. She has received 17 research grants, most notably from the National Science Foundation and the EPA, and is a Fellow of the International Communication Association. She has published 13 books, 83 book chapters, and countless articles on communication.

¹¹ Fairhurst and Putnam utilize Michel Foucault’s work on discourse (Michel Foucault, History of Sexuality, Vol. 1, New York: Pantheon, 1976; Michel Foucault, Power/Knowledge: Selected Interviews and Other Writings, 1972–1977. New York: Pantheon, 1980). Upper-cased Discourse is background. Lower-cased discourse is part of foreground discussion. Background shapes foreground. Framing is a foreground activity that presupposes background, or mission awareness.

¹² Steven J. Venette is a scholar in risk and crisis communication. He has published in organizational communication and argumentation. In addition, his recent work includes projects with various industries, including the Department of Homeland Security’s National Center for Food Protection and Defense.