Question

Examine and explain in your own words how each of the two theories below apply to maintaining professional relationships with internal and external stakeholders. A minimum of three points for each theory must be explained.

Freeman's Normative theory and operational planning.

Analytic theory and operational planning.

Answer 1

Normative Theory And Operational Planning

1. The objective of the normative theory is to answer the following questions, “what are the responsibilities of the company in respect of stakeholders?” and “why companies should take care of other interests than shareholders interests?”
2. The normative theory is linked to moral values.
3. In order to find the optimal strategy for each group of stakeholder it suggests analyzing the stakeholder behavior and possible coalitions between stakeholders groups.

Analytical Theory And Operational Planning

1. The objective is to understand how managers deal with stakeholders, how they represent their interests and the impact of the stakeholder approach in the achievement of various corporate goals.
2. The analytic theory is necessary to answer the question: how to organize into hierarchy stakeholders influence?
3. In order to find the optimal strategy for each group of stakeholders, it suggest to analyze the power of threat, which is determined by resource dependence.