A Stakeholder Identification Framework for Nonprofit Organizations

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A Stakeholder Identification Framework for Nonprofit Organizations

A BioBRUG Case

Perry Rood

Word count: 24.873

Faculty of Economics and Business

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A Stakeholder Identification Framework for Nonprofit Organizations

A BioBRUG Case

- Master thesis -

Pages: 57 Word count: 24.873

Perry Rood

Student number: 2171260

Groningen, June 21, 2013

University of Groningen

Faculty of Economics and Business

Master Business Administration – Small Business & Entrepreneurship

Supervisors:

Dr. O. Belousova

1st supervisor University of Groningen

Dr. M.J. Brand

2nd supervisor University of Groningen

Prof. Dr. A.J. Groen

Voluntary supervisor University of Groningen

Prof. Dr. G.J.W. Euverink

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Abstract

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Times are getting harder for nonprofit organizations (NPOs). The competition for resources is growing (Weerawardena & Sullivant Mort, 2006; Weerawardena et al., 2010), and so is the demand for accountability of NPOs (Kaplan, 2001; Boland & Fowler, 2000; Micheli & Kennerly, 2005). Yetman & Yetman (2012) explain that because many NPOs use resources provided by the public good, they are accountable to this public (e.g. donors, customers, lenders). Zhang & Swanson (2013) even argue that financial accountability is now the norm for NPOs.

This accountability can be increased by the use of a business performance measurement (BPM) framework (Stoetzer & Hilgers, 2011) because a BPM provides insights in the way you are doing business (Kerssens-van Dongelen & Bilderbeek, 1999). Most of the BPMs focus on for-profit organizations (FPOs) (Micheli & Kennerly, 2005; Greatbanks & Tapp, 2007; Stoetzer & Hilgers, 2011). NPOs are different from FPOs, they have different goals (Guthrie & English, 1997; Boland & Fowler, 2000), their environment is perceived as more complex, and they have more parties to account to (Greatbanks & Tapp, 2007). Kaplan (2001) argues that success for NPOs should be measured by how effectively and efficiently they meet the needs of their stakeholders. Which means that a BPM created for FPOs, needs adjustment before a NPO can use it (Micheli & Kennerly, 2005; Greatbanks & Tapp, 2007).

The few BPMs that did include NPO in their BPM frameworks recognized the importance of stakeholders for NPOs (e.g. Kaplan, 2001; Moullin, 2004; Micheli & Kennerly, 2005; Greatbanks & Tapp, 2007). A stakeholder is “any group or individual who can affect or is affected by the achievements of the organizations objectives” (Freeman, 1984: 46). These groups and individuals can have considerable effects on the achievement of an organization’s aspirations (Ackermann & Eden, 2003). Stakeholders are especially important for NPOs because they provide necessary resources. The dependency on resources, make it that NPOs are dependent on stakeholders for survival (Kapteyn, 2006; Zhang & Swanson, 2013). If stakeholders are satisfied and their needs are accounted for, this will not only increase the accountability, but also the transparency, legitimacy, fundraising success, and therefore increase the chance on survivability (Stoetzer & Hilgers, 2011).

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Due to the lacking of a uniform, common framework to identify stakeholders, the goal of this study is to create a stakeholder identification framework that will provide a systematic guidance to identify the most important stakeholders of NPOs, and inventory their goals to create a better and effective BPM.

This framework is particularly interesting for NPOs, who want to put more focus on stakeholder management. Good stakeholder management has positive influence on innovation (Souitaris, 2002), and the recognitions and exploitation of business opportunities (Derry, 2012; Choi & Shepherd, 2004). Additionally it can improve the robustness of the strategy (Frooman, 1999; Ackermann & Eden, 2003; 2011), increase the efficiency of management (Mitchell et al., 1997), and R&D (Kerssens-van Dongelen & Bilderbeek, 1999). Researchers can use the results of this work to improve their own research. This framework especially is a step toward a less superficial and vague stakeholder identification process.

In this framework the focus in on stakeholders necessary for survival of an NPO. These are identified on their level of power to influence, and interest in the organization. This data is gathered through desk research and interviews with managers. The framework created in this work is tested in a NPO, which is active in the biobased economy (BBE) in the north of the Netherlands (NN). This case study proved that the framework is useful to identify the most important stakeholders, but it has room for improvement, which will be elaborated upon in the discussion part.

In next part I will show the literature review, I will elaborate more on NPOs, BPMs, and stakeholders, and it will end this review with a description of the framework. In the methodology part I will describe how I executed the stakeholder identification framework. The findings are presented in the result chapter, and in the final part I will draw a conclusion and discuss the findings.

Literature review

An NPO has different goals than its financial orientated counterpart. NPOs put less emphasis on financial goals and focuses more on social and immaterial goals like, recreation, culture, care and services, interests of specific group interests, or commitment to social change (Osborne, 1995; Kapteyn, 2006; Massetti, 2008). The NPO can be seen as between the public domain of the government and the private domain of the market (Bisesi, 2004; Kapteyn, 2006). They provide additional services that government does not offer, and many of these services are also not delivered by the FPOs (Lyons, 2001). According to Frumkin (in Bisesi 2004), other additions of NPOs are that they help to build social capital and also encourage citizen involvement in politics and advocacy, and they enable staff, volunteers, and donors to see their important commitments embodied in the work of an organization.

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activities like selling products and charging fees for services is the third way. NPOs focus on the first two ways, while FPOs focus mainly on the third way to obtain resources. This is in line with the findings of Boland & Fowler (2000), who found that the vast majority of public and non-profit sector organizations still generate most of their income from the state. Also Svidronova & Vacekova (2012) found that subsidies, donors, and grants are important sources of income for NPOs. Nonprofit does not mean that the employees or members cannot have benefits of working in a nonprofit organization, as Lyons (2001) stated, any material benefit gained by a member is proportionate to their use of the organization. He defines a nonprofit organization as “… organizations that are explicitly prohibited from distributing a profit and surplus assets when they are wound up. However, such organisations are permitted to distribute benefits by other means, such as lower cost for members” (2001: p8).

In this work the NPO is defined as an organization that is funded by governmental and private contributions, is driven by an immaterial, social mission, and without the intention to make profits. In this definition, a NPO is dependent on other parties for resource generation. Because of this dependence on others, it is not surprising that a NPOs biggest concern is the sustainability of their organization (Zhang & Swanson, 2013). They are worried about the potential for reduced or lost funding, especially during hard economic times (Kapteyn, 2006). Weerawardena & Sullivant Mort (2006) argue that the competition for donors and grants is growing, and that the NPOs are organizing in a highly competitive environment. In order to bring some stability, and more control over income, Froelich (1999) recommend NPOs to use revenue diversification (the use of multiple income sources). With the data from 136 Slovakian NPOs, Svidronova & Vacekova (2012) found that NPOs indeed use multiple sources for revenues. A downside is that multiple funders bring greater complexity, wider range of management tasks, it needs more resources to obtain revenues, and a growing number of conflicting demands (Froelich, 1999). Next to these economic issues, NPOs also have other issues to face, like social, environmental, and sustainability issues (Weerawardena & Sullivan Mort, 2006). Since there are many issues, it is important for NPOs to carefully manage their limited resources (Zhang & Swanson, 2013).

These findings show that NPOs use different sources to obtain necessary resources, but this causes a growing number, of possible conflicting, demands. Because of the multiple other issues NPOs face, it can become unclear for an NPO to decide which factors are important. Therefore it can be useful for NPOs to bring clarity in the most important factors and goals for the NPO to consider. A way to do this is with the help of a BPM (Kerssens-van Dongelen & Bilderbeek, 1999).

Performance measurement

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However, a BPM is a complex thing. A literature study by Franco-Santos et al. (2007) found that a BPM exists of a combination of the features (which properties and elements), roles (purpose and function), and processes (actions). Only If the BPM is implemented and used in a right way, this positively influences firm performance (Bourne et al., 2005; Franco-Santos & Bourne, 2005).

Table 1 provides an overview of BPMs described in literature. The advantages and disadvantages are mainly based on the discussion of the authors, and on work of Neely (2002) and Kennerley & Neely (2002). A BPM is considered as created for NPOs, if this is mentioned in the introduction of the paper, or if other authors argue it to be. If the focus of the BPM is on shareholders, it is considered as a no.

Table 1 - BPM frameworks

Author Model Focus on Advantages Disadvantages Created

For NPO

Brown (1996) Macro Process Model

- Input measures - Process measures - Output measures - Outcome measures

- Pays attention to material and information flows - Highlight differences between different measures

- Very much process focused

No

Cross & Lynch (1991)

Performance Pyramid

- Internal financial

(productivity, cycle time, and waste)

- External market (customer satisfaction, quality, and delivery)

- Distinction between internal and external measurements - Ties hierarchical view with process view. - Difficult to operationalize - Tend to concentrate on only shareholders and customers No European Foundation for Quality Management (EFQM, 2013) EFQM Excellence Model - Enablers (leadership, people, strategy, partnerships & resources, and process, products & services)

- Results (customer, people, society, and business results)

- Addresses needs of all stakeholders. - Shows credibility and trustworthiness to stakeholders

- Easy to use and understand

- Difficult to operationalize - More subjective than objective Yes Fitzgerald et al. (1991) Building Block Model - Results (competitiveness and financial performance) - Determinants of results (quality, flexibility, resource utilization, and innovation)

- Focus on service sector - Make links between dimensions. - Linked to strategy - All key determinants of success will be measured

- Less useful outside service sector No Kaplan & Norton (1992) Balanced Score Card - Customer satisfaction - Internal business process - Innovation and learning - Financial metrics

- Has proven to improves organizations performance - Can be used for employee incentives/rewards - Guide for change and improvement - Most used - Communication is top-down - Measures can be inaccurate or subjective - Does not include important all stakeholders - Monetary orientation - Oversimplification - Lack of focus on intangible factors No Keegan et al. (1989) Performance measurement matrix

- Internal and external measures

- Non-cost and cost measures

- All measures can be included. - Can identify (less) important measures.

- Provides little indication of the different dimensions of performance - No clarity about the links between dimensions

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Author Model Focus on Advantages Disadvantages Created For NPO Kennerly & Neely (2002) Performance Prism - Stakeholder satisfaction - Strategies - Process - Capabilities - Stakeholder contribution - Comprehensive

- Considers new stakeholders

- Missing empirical evidence - Offers little

information about how to measure

Yes

Moullin (2004) Public Sector Scorecard

- Financial

- Service user/stakeholder - Operational Excellence - Innovation and learning

- Different key stakeholders are focused upon

- Measures process and outcomes

- Can be used for employee incentives/rewards - Communication is top-down - Measures can be inaccurate or subjective Yes Stoetzer & Hilgers (2011) Stakeholder Performance Reporting - Finances

- Needs of internal and external stakeholders - Productivity and performance

- Focuses on internal and external stakeholders - Measures process and outcomes

- Not been tested Yes

Each of the BPMs focuses on different attributes and aspects. Advantages of a BPM are that it can increase credibility and trustworthiness (EFQM, 2013), it can improve an organizations performance (Kaplan & Norton, 1992), and it can be used for employee incentives and rewards (Kaplan & Norton, 1992; Moullin, 2004). Disadvantages of BPMs are that they can be subjective (EFQM, 2013, Kaplan & Norton, 1992; Moullin, 2002), difficult to operationalize (Cross & Lynch, 1991; EFQM, 2013), and very much top-down focused (Kaplan & Norton, 2012; Moullin, 2004).

Table 1 shows that all BPMs have in accordance that they focus on both the process and outcomes, and have to goal to measure and improve business performance. It is also noticeable that most of the BPMs include financial, and stakeholder/customer satisfaction in their measurements. I found that most information is about the balanced scorecard (BSC) of Kaplan & Norton (1992). This is in line with the findings of Neely (2005), he found that the BSC was by far the most cited BPM in literature. Four of the nine BPMs stated that they can be used by NPOs. The next part elaborates more on the characteristics of these NPO focused BPMs.

NPO-relevant BPM models

As described in the first section of this chapter, NPOs have different goals than FPOs, and should therefore be accounted on different attributes (Guthrie & English, 1997; Boland & Fowler, 2000; Micheli & Kennerly, 2005). This is especially necessary because an evaluation system that does not integrate all relevant variables cannot be expected to show valid results (Norreklit, 2000).

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measurable, and they serve a multitude of constituencies whose goals and needs may be quite heterogeneous. Therefore, it seems obvious that private-sector concepts and tools for performance measurement and management are not (easily) transferable to nonprofit organizations” (2003: 268). These findings are in line with the definition used for NPOs, and underpin that NPOs need different BPMs than FPOs.

All BPMs in table 1 focus on both customers and shareholders, but what makes the BPMs for NPOs different is the inclusion of multiple stakeholders in their measurement. The EFQM excellence model includes customers, people, and society (EFQM, 2013), and the other four NPO focused BPMs mention stakeholders as important part of business measurements. The framework provided by Moullin (2004) is a recreation of the BSC, where extra emphasizes on stakeholders is given. Moullin (2009: 31) argues that “it is an excellent way to focus on the outcomes that matter for the service users, patients, and other key stakeholders”. This stakeholder focus of NPOs is also found by Micheli & Kennerly (2005). They did a literature review on NPO BPMs and argue that an NPO specific BPMs should consider: (1) the differences between public, non-profit, and private sector, (2) a description of all stakeholders, (3) an identification of the main stakeholders, and (4) the cause-and-effect relationship between the stakeholders should be identified. This shows that measuring stakeholder’s goals is important for NPOs.

To sum up, the use of an BPM has different advantages for an NPO, it measures the business performance, it improves the communication with potential donors, and therefore it increases the organization’s survival chances (Franco-Santos et al., 2007; Stoetzer & Hilgers, 2011). The main difference between NPO and FPO BPMs is that FPOs tend to focus on financial goals, and usually see only customers and shareholders as relevant stakeholders. NPOs have a plural of output goals, and focuses on multiple stakeholders. Kaplan (2001) and Stoetzer & Hilgers (2011) argue that the success and survivability of an NPO is dependent on meeting stakeholder goals. So stakeholders are considered important for survival of NPOs. The next section elaborates more on who the stakeholder is and what they want.

Stakeholder

The original stakeholder definition is that of Freeman (1984: 46), “any group or individual who can affect or is affected by the achievement of the organization's objectives”, it is also the most accepted definition (Fassin, 2009).

Table 2 - Stakeholder definitions

Author Definition

Freeman & Reed (1983: 91) Can affect the achievement of an organization's objectives or who is affected by the achievement of an organization's objectives

Freeman (1984: 46) Any group or individual who can affect or is affected by the achievement of the organization's objectives

Alkhafaji (1989) Groups to whom the corporation is responsible (cited in Mitchell et al., 1997: 858) Thompson et al., (1991) Are in relationship with an organization (cited in Mitchell et al., 1997: 858)

Brenner (1993) Are or which could impact or be impacted by the firm/organization (cited in Mitchell et al., 1997: 858)

Starik (1994) Can and are making their actual stakes known"-"are or might be influenced by, or are or potentially are influencers of, some organization (cited in Mitchell et al., 1997: 858)

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Author Definition

Donaldson & Preston (1995: 85) Persons or groups with legitimate interests in procedural and/or substantive aspects of corporate activity

Eden & Ackermann (1998) People or small groups with the power to respond to, negotiate with, and change the strategic future of the organization (cited in Bryson, 2004: 22)

Cragg & Greenbaum (2002: 332) Anyone with a managerial interest in the proposed project

Johnson & Scholes (2002) Those individuals or groups who depend on the organization to fulfill their own goals and on whom, in turn, the organization depends (cited in Bryson, 2004: 22)

Phillips (2003: 481) Those who can assist or hinder the achievements of the organization’s objectives Cennamo et al. (2009: 491) Anyone that has an interest in a firm or will be effected by its deliverables or outputs

Fassin (2009: 116) Any individual or group that maintains a stake in an organisation in the way that shareholder possesses shares

Cuppen (2010: 579) Someone involved in, affected by, knowledgeable of, or having relevant expertise or experience on the issue at stake

Marcharis et al. (2012: 614) Stakeholders are people who have an interest, financial or otherwise, in the consequences of any decisions taken

Table 2 shows that all the stakeholder definitions are in line with Freeman’s (1984). Some authors focus only on the affected individuals or groups (Donaldson & Preston, 1995; Gragg & Greenbaum, 2002), while others focus on the influence aspect (Eden & Ackermann, 1998), but most of these definitions refer to groups or individuals that have both an interest in and influence on the firm. This indicates that it is a broad definition, since virtually anyone can be included in this definition (Mitchell et al., 1997).

This broadness is also the starting point of the “stakeholder theory” of Freeman (1984), he argues that all stakeholders of an organization should be heard of. Building on that theory, Donaldson & Preston (1995) argue that managers should acknowledge the validity of stakeholder interest, and should attempt respond to them within a mutually supportive framework (everybody is equal) because that is a moral requirement for the legitimacy of the management function.

Critics on this theory argue that attempting to be everything for everyone virtually guarantees organizational ineffectiveness (Kaplan, 2001). This is recognized by Donaldson & Preston (1995), who explain that managers can always justify their actions by telling that they were working on some stakeholder’s wish. Another argument for a more narrow definition is that especially for organizations with little resources (like NPOs) it is impossible to take everyone in account (Kaplan, 2001). Jawahar & McLaughlin (2001) state that stakeholders which can fulfill a need of the organization are perceived as critical for organizational well-being. Correctly identifying the organization’s stakeholders and accurately prioritizing stakeholder claims are key processes in the successful management of organizations (Jawahar & McLauglin, 2001). Pajunen (2006) agrees with this view, and showed that, especially during times of crisis, the support of the important stakeholders is important for firm’s survival. Therefore NPOs should use a more narrow definition of a stakeholder.

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organizations differ fundamentally, so the focus should be on the NPO. Also the term “going concern” is rather vague. Clarkson (1995) did not elaborate on this definition. I assume that, since the going concern is a universally understood assumption (Hahn, 2011), when he mentioned going concern, he meant that the company will continue in the foreseeable future (ISA, 2009). The foreseeable future has been given no limit by the ISA (2009). Business and strategy literature see the foreseeable future as the next five years (Mercer, 1996; Allen, 2006). This creates the following definition for an important stakeholder for an NPO: one without whose continuing participation the NPO cannot not survive in the next five years.

This definition is still in line with Freeman’s (1984), since it includes both stakeholders that can affect or are affected by the NPO. The difference is that the focus is not on all stakeholders, but only the important ones. Stakeholders that can influence a firm are seen as important for organizational survival, since it has the ability to make the organizations do things it would have otherwise not done (Mitchell et al., 1997). Also stakeholders that are affected by a firm can have influence on firm’s survival. For example, if a stakeholder believes it is within its rights to make a claim, this stakeholders can use their own power, or external power sources (e.g. network, powerful allies, law(yers)) to influence the organization (Frooman, 1999). So both types of stakeholders are perceived important for survivability of the NPO.

Virtually everyone can affect and/or can be affected by an organization, which means that there are also stakeholders that are not considered an important stakeholder. The risk is that these stakeholders, the “secondary stakeholders”, can or will be ignored by an organization (Bryson, 2004; Derry, 2012). For example, the person living next to a big factory, who’s air is polluted by the factory’s exhaust gasses. If this person does not have a network or sufficient resources to influence an organization he or she will be ignored, since this person is not considered important for survival in the foreseeable future. NPOs do have a higher “interest for others” than FPOs, meaning that the chance is bigger that these secondary stakeholder will be heard of by NPOs (Jones et al., 2007), but this is no guarantee. This indicates that this stakeholder definition is not in line with the “stakeholder theory rules” of Donaldson & Preston (1995), and that this definition will not be useful within the stakeholder theory.

This framework focuses on improving the BPM, to increase the satisfaction of stakeholders and accountability of the organization. Because NPOs have limited resources and it is inefficient and impossible to serve all stakeholders (Kaplan, 2001), it necessary to make a distinction between important and secondary stakeholders. This ensures that at least the stakeholders necessary for organizational survival are kept satisfied, which increases the chance on organizational survival (Stoetzer & Hilgers, 2011). Therefore this narrow stakeholder definition is used.

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Methods of stakeholder identification

The studied literature used different methods to identify the most important stakeholders for an organization. Table 3 shows an overview of stakeholder identification methods used by 16 stakeholder related researches that will form the base for the findings. The table shows that four methods can be distinguished: desk research, interviews, workshops, and pre-defined groups.

Table 3 - Methods used for stakeholder identification

Author Main method to identify stakeholders With whom Tested in NPO?

Agle et al. (1999) Used generic stakeholder groups of Freeman (1984) - No

Ogden & Watson (1999)

Based stakeholder groups on Freeman (1984) - No

Kochan & Rubinstein (2000)

Other research project, interviews, network analysis, observations

Founders, current leaders, and employees

No Harvey & Schaefer

(2001)

Semi-structured interviews, policy documents, strategy documents, and similar.

Managers from multiple levels

No Hillman & Keim (2001) Used primary stakeholders group defined by

Clarkson (1995)

- No

Winn (2001) General knowledge, news articles, media accounts, publicly available data, semi-structured interviews

Top managers No

Neely et al. (2002) Workshops Top managers Yes

Moullin (2004) Workshop Taskforce members, HR

managers, staff, and trade union representatives

Yes

Bartkus et al. (2006) Used stakeholder groups, based on three other authors.

- No

Eesley & Lenox (2006) Database (searching keywords) - No

Pajunen (2006) Company archives and personal archives of CEO - No

Parent & Deephouse (2007)

Archival materials and retrospective, semi-structured interviews.

Managers from multiple levels and stakeholders

Yes

Cuppen (2010) Newspapers articles, news-websites, contacts - No

Ackermann & Eden (2011)

Workshops, network analysis Top management team Yes

Crilly & Sloan (2012) Interviews Managers No

Song & Mu (2013) Publically available information, interviews Experts No

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captured (van Aken et al., 2012). This weakness can be solved by adding interviews or workshops to the data sources (e.g. Winn, 2001; Parent & Deephouse, 2007).

Interviews and workshops are quite similar, both methods involve managers from the organization and to obtain qualitative data. The difference between these two is that an interview is one-on-one with a manager, and a workshop involves multiple managers at the same time. Also in some of the workshops done, managers were asked to create something together, as a sort of assignment. For example, Kochan & Rubinstein (2000) called it a “problem-solving workshop”, and a part of it was to identify key stakeholders. Neely (2002) used the workshop to only identify the important stakeholders. The interviews performed were semi-structured interviews (Harvey & Schaefer, 2001; Parent & Deephouse, 2007; Winn, 2001), in depth (Kochan & Rubinstein, 2000), and open questions were used (Cuppen, 2010). With questions like: “What stakeholder groups are perceived as most important by managers?” (Harvey & Schaefer, 2001), and "In general, what stakeholders do you consider as important to your firm? Who are they and how important are they?” (Winn, 2001), the researchers tried to identify the important stakeholders. Most of these interviews lasted between 30 minutes and two hours.

For each workshop or interview top managers were used, while in some studies managers from various levels were interviewed. Parent & Deephouse (2007) found that although the top managers identified most of the most important stakeholder, they do not identify all of them. The addition of lower level managers to the sample had a positive influence on the reliability of the research. Both Kochan & Rubinstein (2000) and Moullin (2004) included external parties1, but they do not argue how this influenced their stakeholder identification process.

An advantage of managerial influence is that data can be created, and it allows the researcher to ask additional, in-depth questions (van Aken et al, 2012). A disadvantage is that managers can provide information that is biased (van der Bij, 2012) or incomplete (van Aken et al., 2012).

Out of the 16 works reviewed above, four used predefined stakeholder groups. This method uses stakeholder groups that are predefined by the researcher, based on earlier literature. While Ogden & Watson (1999) only included customers and shareholders, the other authors also included community/society, suppliers, employees (Agle et al., 1999; Bartkus et al., 2006 Hillman & Keim, 2001). These groups are based upon the generic stakeholder groups of Freeman (1984), and the “typical” primary stakeholder groups provided by Clarkson (1995). The researchers did not check these stakeholders on importance, not one did use an additional method to identify/validate the important stakeholders. Based on this reason, this method is criticized (Winn, 2001). While Winn (2001) does recognize that these groups can be helpful in identifying stakeholders, he argues that identifying stakeholders in groups is not an optimal way. He found that stakeholder groups, like shareholders, can have different goals, interests or influence capacity. He argues that splitting stakeholder groups up can be necessary for more reliable results. Also Freeman (2010) states that more than these five generic groups can be important stakeholders. In line with these arguments,

1

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Parent & Deephouse (2007) argue that providing a pre-defined list of stakeholders may add bias to a research by including secondary or excluding important stakeholders.

The combination of desk research and managerial involvement seem to be the best method for the identification of stakeholders. The disadvantages of desk research can be compensated with interviews, and vice versa (van Aken et al., 2012). Because the multitude of stakeholders a NPO has to account to (Speckbacher, 2003), and the possibility that stakeholders can be heterogeneous groups, the pre-defined stakeholders groups method is not used (Winn, 2001; Macharis et al., 2012). Therefore, in accordance with Winn (2001) and Parent & Deephouse (2007), I will involve managers and use desk research to obtain data for the identification of important stakeholders.

Before the data is obtained, it is necessary to know, what kind of data is needed to identify the important stakeholders. The next part will discuss which attributes and information are needed to identify the important stakeholders.

Attributes of important stakeholders

Literature has no uniform way to identify important stakeholders. Ackermann & Eden (2011) and Mitchell et al. (1997) both have proven frameworks, and both provide a method to identify important stakeholders. Ackermann & Eden (2011) use power and interest to identify important stakeholders. The “who and what really counts” framework of Mitchell et al. (1997) uses power, legitimacy and urgency, to identify the stakeholders “that really count”. The difference between these two frameworks lies in the definition of the important stakeholders. The framework of Mitchell et al. (1997) identifies salience, “the degree to which managers give priority to competing stakeholder claims” (1997: 869). These are not necessarily the stakeholders that are needed for survival, but the stakeholders manager’s prefer to listen to. Ackermann & Eden (2011) their framework focuses on identifying the stakeholders that have a “powerful effect on the feasibility of the organization achieving its strategic goals and thus helping assure its long-term viability” (2011: 181). This latter goal is more in line with the goal of this research, to find the stakeholders that are important for the survival of the organization.

The power and interest attributes used by Ackermann & Eden (2011) complement the definition used in this work. Influence, the ability to make the organization do things they would have otherwise not done (Parent & Deephouse, 2007), is also called power. The stakeholders affected by the firm, are considered interested stakeholders (Freeman, in Ackermann & Eden, 2011). Song & Mu (2013) call the level of interest and power of stakeholders the most important attributes for stakeholder analysis. In line with Ackermann & Eden (2011) and Song & Mu (2013), I will therefore use the attributes power and interest to identify important stakeholders.

Power

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year old case by Laplume (2007) recognized the importance of power. Parent & Deephouse (2007) found that power is the most important attribute for managers to identify important stakeholders. Pajunen (2006) even found that powerful stakeholders have a direct influence on organizational survival.

Table 4 - Overview of power related studies Authors Definition of power Measurement Influence on importance

Ackermann & Eden (2011: 737)

Undefined2 Subjective interpretation of top management team

Powerful stakeholders deserve attention, or should at least be considered

Agle et al (1999) One social actor, A, can get another social actor, B, to do something that B would not have otherwise done

Used a survey with 3 statements to answer on a Likert scale, one is “ this stakeholder group had the power to enforce its claims”

Power has a positive influence on managerial perception of importance

Eesley & Lenox (2006) The relative

access to resources for the stakeholder group

with respect to the firm being targeted

Divide stakeholder group assets by the targeted firm

assets

Stakeholders with greater power are more likely to elicit a positive response from a firm Harvey & Schaefer

(2001)

No definition of power given Subjective interpretation of managers

Stakeholders with higher power are considered more important by managers. Especially stakeholders with an institutional power base Kochan & Rubinstein

(2000)

The means to assert one's interests Subjective interpretation of the researcher

For a firm to focus on a stakeholder, stakeholders must have sufficient power to compel influence Pajunen (2006: 1263) A stakeholder has power

over the focal organization if the focal organization is more dependent on the stakeholder

than stakeholder is on the focal organization

Subjective interpretation of researcher

Stakeholders that score high on direct resource dependency power and network position power have a direct influence on an organization’s survival Parent & Deephouse

(2007)

Power is the (potential) ability of stakeholders to impose their will on a given relationship through coercive, utilitarian or normative means

Subjective interpretation of researchers

Power is the most important attribute for a manager to elicit a positive response to a firm

Two types of definitions of power can be identified, absolute and relative. The absolute definition argues that stakeholders have the ability to affect the organization (Agle et al., 1999, Kochan & Rubinstein, 2000; Parent & Deephouse, 2007), and the relative definition argues that the power of the stakeholder is relative to the power of the organization. This relativeness is based on dependency (Pajunen, 2006) and access to resources (Eesley & Lenox, 2006). Two authors let the definition of power undefined, and used the manager’s own interpretation of the definition (Harvey & Schaefer, 2001; Ackermann & Eden, 2011). Ackermann & Eden (2011) argue that tight definitions are not helpful for their research. It negatively influenced manager’s identification of stakeholders because too much focus was given on the tight definition. A looser definition can be beneficial for managerial interpretation, but the use of a definition gives a subject matter direction and scope, and leads to

2

Ackermann & Eden (2011) did not define power because the literature gives no consistent or precise

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better understanding for the reader (Khumalo, 2012). So a tighter definition is useful, I choose not to use the relative definition because of the superficiality in the question of who is more powerful, which is discussed in the next paragraph. For this work I will work with the absolute definition of Parent & Deephouse (2007), the (potential) ability of stakeholders to impose their will on an organization.

Most authors used subjective interpretation of themselves or managers to measure power. Agle et al. (1999) asked CEOs through a survey to rate the stakeholder’s power. Ackermann & Eden (2011) let the managers decide where to put a stakeholder on the continuum of power, while Parent & Deephouse (2007) rated an stakeholder 0, 0,5 or 1 to indicate its power, with 0 as having no power, 1 having power, and 0,5 if the power level changed over time. Kochan & Rubinstein (2000), Harvey & Schaefer (2001), and Pajunen (2006) left it rather vague how they measured the power attribute of stakeholders, and when a stakeholder is considered powerful. That almost all researchers used subjective interpretation for power indicates that it is hard to operationalize power, and subjectivity is probably the best way to do this. Especially since the other method used by Eesley & Lenox (2006), to base the power on the assets, is rather superficial. It indicates that only big firms have power, and that smaller firms never possess power.

Institutionalized power (like legislation), and utilitarian power (the ability to dispense or withhold material or financial resources) are considered most important power factors (Harvey & Schaefer, 2001; Pajunen, 2006; Parent & Deephouse, 2007). Also network power is considered an important factor (Pajunen, 2006). Ackermann & Eden (2011) let managers create a map of stakeholder relations, to identify this power. So extra emphasizes should be given on stakeholders who possess institutionalized, utilitarian, and network power. The dependency of NPOs on resources, underpins these power means.

Interest

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Table 5 - Descriptions of affected stakeholders Author(s) Stakeholders that are affected by the organization

Clarkson (1994) Those stakeholder who bear some form of risk as a result of having invested some form of capital, human or financial, something of value, in a firm (cited in Hillman & Heim, 2001: 126)

Clarkson (1995: 106) Have, or claim, ownership, rights, or interests in a corporation and its activities"

Cornell & Shapiro (1987) Claimants" who have "contracts"

Donaldson & Preston (1995) Identified through the actual or potential harms and benefits that they experience or anticipate experiencing as a result of the firm's actions or inactions"

Evan & Freeman (1988) Benefit from or are harmed by, and whose rights are violated or respected by, corporate actions (cited in Mitchell et al., 1997: 861)

Kochan & Rubinstein (2000) The extent to which they put these resources at risk and would experience costs if the firm fails or their relationship with the firm terminates

Langtry (1994) The firm is significantly responsible for their well-being, or they hold a moral or legal claim on the firm

Rowley & Moldoveanu (2003) Interest intensity is a stakeholder group's degree of discontent or feeling of urgency Song & Mu (2013: 475) The level of interest is the priority and importance the stakeholder attaches to the policy

and it depends on whether and how much the stakeholder can gain or lose from the implementation of the policy program.

The table shows that stakeholders that have a form of risk, benefits, or legal claims, are considered as being affected by an organization. Risk and benefits can be in the form of investment of resources (e.g. economic, in kind, or material) (Kochan & Rubinstein, 2000; Crane & Ruebottom, 2012), but also in immaterial forms, like well-being (Langry, 1994). Stakeholders with legal claims have interest through rights or contracts (Cornell & Shapiro, 1987; Clarkson, 1995). Contracts capture the agreed upon terms, and if violated this can lead to reactions (Weber & Mayer, 2011). So if a stakeholder has a contract or some other form of agreement with the organization, it can be considered an interested stakeholder. These findings indicate that the perceived amount that a stakeholders benefits or risks, determines the level of interest. Based on Otim et al. (2012) risk and benefits are defined as the possibility of a loss or win relative to some reference point.

The few researches that measured and assessed interest used the interpretation of managers or the researcher himself. Ackermann & Eden (2011) left the measurement of interest loosely, and let managers decide the interest of a stakeholder on a continuum (not interested to very interested). Also Bryson (2004) argues that the subjective interpretation of managers should be used to identify the interested stakeholders. Song & Mu (2013) used their own interpretation, and to a lesser extent, that of experts, to examine the interest of stakeholders. This implies that interest should be measured based upon managerial or researcher’s interpretation, and therefore I will use these to measure interest of the stakeholder.

Other attributes

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stakeholders to take potential action. The difficulty of legitimacy is in its definition, when is something desirable, proper, or appropriate, and who decides this (Derry, 2012)? And even if a claim is perceived legitimate, this does not necessarily mean that a stakeholder will take action. This is shown in the recent affairs with NSA about collecting and analyzing private data of people. On their website Microsoft states that they perceive privacy as highly legitimate: “we recognize the important responsibility we have to respect human rights and the principles of free expression and privacy” and therefore they provide a transparency report (Microsoft, 2013). This is a good gesture, but Microsoft has been providing private information of its users for years to the NSA, and only when this was made public, they took action. Indicating that legitimacy alone is not enough to take action. Only when a high risk of damage to the image occurred, action was taken by Microsoft. Because of the difficulties in operationalize legitimacy, and the non-direct relation to taking action, legitimacy is not used as attribute for identifying stakeholders that are necessary for survival.

The other attribute used by Mitchell et al. (1997) is urgency “the degree to which stakeholder claims call for immediate attention” (1997: 869). This is based on the criticality and time sensitivity of the claim. The reason this attribute is not used as separate attribute in this framework, is that it acts as an amplifier for other attributes (Winn & Keller, 2001). It has influence on the interest level because it states something about the level of risk or benefits. If a stakeholder has a highly urgent claim, this will be translated in a high level interest.

Stakeholder importance

The higher the interpreted power and interest of a stakeholder, the more important a stakeholder is. As stated the levels of power and interest are based on the managerial interpretation and that of the researcher. Ackermann & Eden (2011) also used this approach to identify important stakeholders. They created a “power-interest” grid to provide a clear image and that the important stakeholders can be easily recognized. If a stakeholder scores high on interest and/or power it is considered an important stakeholder, if the stakeholder scores low on both attributes it is considered a secondary stakeholder. This work will also use a “power-interest” grid, but this grid is more detailed (3x3 categories) rather than the 2x2 matrix of Ackermann & Eden (2011). Using a higher number of categories produces higher accuracy (Cooper & Schindler, 2008).

Once is identified who the important stakeholders are, their goals need to be inventoried. The next section elaborates more on the inventory of goals of the important stakeholders.

Inventory goals of stakeholders

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Interest and goals do overlap, but they are different. As discussed, interest is about the impact the organization has on a stakeholder, while the goals can be perceived as criteria for the stakeholder to predict satisfaction. For example, if a firm invests resources in an organization, and expect or needs expects something in return, it is considered as an interested stakeholder. Whether the need or expectation is satisfied, depends on the goal of the stakeholder. This implies that stakeholders with the same interest can have different goals. Some investors can be satisfied with 20% return, while another firm wants 40%. Therefore I agree with Stoetzer & Hilgers (2011) that stakeholder’s goals should be analyzed individually because the satisfaction of a stakeholder has influence on future interest of the stakeholder (Stoetzer & Hilgers, 2011). Table 6 provides an overview of different methods used to identify the goals of stakeholders.

Table 6 - Overview of previous research on goals inventory Authors How did the research inventoried stakeholder goals How arranged

Ackermann & Eden (2011) Workshop with managers Stakeholder management web Boerner & Jobst (2011) Based on literature review -

Cuppen et al. (2010) Pre-setup list of statements. Q-analysis, PQMETHOD 2.11 - Greer & Ruhe (2004) Pre-setup list. Mathematical model, based on perceived value

and urgency of requirement

- Laporti et al. (2009) Story telling method (Athena) with stakeholders - Neely et al. (2002) Workshop with managers - Macharis et al. (2012) Literature study

Interactive discussions with stakeholders through telephone, in person or workshops etc.

Criteria tree

Matos & Silvestre (2013) Secondary sources

Interviews with key informants and other stakeholders

- Moullin (2004) Workshops with service users and other key stakeholders - Parent & Deephouse (2007) Archival materials and retrospective, semi-structured interviews

with managers and stakeholders

- Winn (2001) General knowledge, news articles, media accounts, publicly

available data, semi-structured interviews with organizing committee managers and stakeholders

Objectives hierarchy

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Most authors do not describe how they organize the different goals. Ackerman & Eden (2011) create a “stakeholder management web” to identify stakeholder goals, to determine how and when it is appropriate to intervene. This method is less interesting for this framework, since the goal of this framework is to create an overview of the most important stakeholder’s goals. Both Marcharis et al. (2012) and Winn (2001) argue that there is a hierarchy in goals. Winn (2001) calls this an useful technique to deepen data interpretation. Different levels of goals can be distinguished. I agree with these authors that the best way to inventory stakeholders goals, is first through desk research and next to evaluate and validate the list with the important stakeholders. Based on the validated data, a hierarchy of goals can be created.

Merging stakeholder in groups makes the results clearer. Wolfe & Putler (2002) and Macharis et al. (2012) argue that different stakeholders can be combined in a stakeholder group if they have the same goals. This means that the definitive groups are created after the stakeholder identification and goal inventory. It is also possible that an assumed stakeholder group has no common idea on the goals and that this stakeholder group has to be split (Macharis et al., 2012). This was the case for Neely & Adams (2003), in their DHL case, they categorized their customers into three separate segments, based on their wants and needs. Winn (2001) underpins this, she found that within stakeholder groups different views and goals exist, and that not all groups can be perceived as homogenous. Because this framework also uses power to identify important stakeholders, not only the interest should be corresponding for the creation of a stakeholder group, but also their power. Therefore, where possible, stakeholder groups should be created based on the similarity in power, interest, and goals.

At this point the goal of the stakeholder identification framework is achieved. The important stakeholders are identified, as well as their goals. These results can be used to improve the BPM, overall stakeholder satisfaction, and eventually increase the chance on organization survival. Although the latter is outside the scope of this thesis. The next step describes the stakeholder identification framework.

Stakeholder identification framework

Based on the findings in this work so far, a stakeholder identification framework is created, figure 1 shows this framework. It exists of two steps, respectively: the identification of important stakeholders and the inventory of goals of the most important stakeholders.

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Step 1 – Identification of important stakeholders

Before managers of the organization are interviewed, the first objective is to create a list of potential important stakeholders. This is useful to get basic information about the organization and the environment it is in, and as a preparation for the interviews. The data about potential important stakeholders can be obtained through desk research (e.g. official documents, archival documents, (news) websites, and blogs). Based on this data and own interpretations, a first assignment can be done of the power and interest attributes. This leads to a preliminary list of potential important stakeholders.

The interviews with managers are used to validate and evaluate the findings, but also to provide additional data. The interview should provide information about the organization, the interviewee, his or her interpretation of the most important stakeholders, and his/her expectations about their goals. Once the interviewee has given the list of important stakeholders, this list is compared with the preliminary list. It is important to show this list after the interviewee created his/her list, this ensures the interviewee is not manipulated by the list (Emans, 2004). After the discussion about the differences in the lists, the interviewee is asked to rank the stakeholders on importance for business survival for the next five years.

Based on the data of the desk research data and the interviews a workable list of important stakeholders can be created. The next step is to inventory the goals of the stakeholders on this list. Step 2 – Inventory of stakeholder goals

As in step 1, first a preliminary list of stakeholder goals is created for each important stakeholder. In addition to desk research, also the data from the managerial interviewees is used for this. A preliminary hierarchy of goals can be created, this makes a distinction between the “main” goals and the “subordinate” ones (Winn, 2001; Wong & Goodwin, 2009).

For the most reliable results, multiple interviews should be done per stakeholders (van der Bij, 2012). If it is not possible to interview multiple, or all stakeholders, it is recommended that at least one interview is done with all “most important stakeholders” (the stakeholders that score high on interest and power). The interview should provide information about the interviewee, (if applicable) the organization/stakeholder group, and its interpretation of the goals of the individual and/or group. These results are compared with the preliminary hierarchy of goals and discussed. The outcome should be a workable hierarchy of goals for the stakeholder.

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Methodology

For the testing of this framework a case study methodology was employed. A case study is chosen because it can convince the reader that a theory is plausible. It can be used for motivation of the research question (it shows a real example of the relevance of a research question), and for illustration (it shows that, and how a method or framework and its concepts work if applied) (Siggelkow, 2007). The study of a case is valuable because it provides the opportunity to describe an organization in an in-depth matter (Parent & Deephouse, 2007). The qualitative data resulting from the case is particularly of use for studying organizations and the discovery of qualities of people and situations (van Aken et al., 2012). This type of data is more useful than its counterpart quantitative data because the latter is particularly interested in the number or amount of these qualities, which is less relevant for this research (van Aken et al., 2012).

The case studied in this work is the BioBRUG case. I first describe the setting of the case, followed by the data collection, analysis method, and the quality of the research.

Research setting

Considering the choice of a right organization is important to provide a powerful example (Eisenhardt, 1989; Siggelkow, 2007), this work uses the BioBRUG to test the stakeholder identification framework. The results of the framework are important for the survivability of the BioBRUG because in 2015 new funding is needed for continuation of the project and this necessary funding is coming from stakeholders. Also the insights could be used for further improvement of the BioBRUG concept.

The nonprofit project BioBRUG is initiated by the University of Groningen (RUG) in 2010, to stimulate the synergy and interaction between entrepreneurship in the region of north Netherlands and research in the BBE. The BioBRUG initiative can be seen as a connection service, by connecting small and medium enterprises (SMEs) and scientific knowledge of the RUG. If an SME has an idea or problem related to the BBE, they can contact BioBRUG. If the problem is considered interesting, the BioBRUG will organize brainstorm sessions, market scans, innovation scans, and technical feasibility studies, to find solutions. Professors and students of the RUG and employees of the firm will be involved in these projects, which can last up to six months.

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Because the BioBRUG is dependent on the developments in the BBE, I will elaborate a little on this topic. The goal of the BBE sector is to replace oil based products with bio based products. This is considered important due to the limited availability of oil, and the pollution the oil based production causes. Four types of applications of BBE can be distinguished, from low to high end: energy, chemicals, food, and health and lifestyle. While other sources (e.g. solar and wind energy) can be used for a sustainable replacement of energy, the only known replacer for the latter three, is currently biomass. The transition from an oil based economy to a BBE is supported by the Dutch government.

Data collection

Although the definition states that the foreseeable future is the next five years, in this work I will put extra focus on the next two years. After these years new funding is needed for the survival of the organization. Without participation of important stakeholders on this date the firm will not continue in the same form after 2015. Because this date is crucial for survival, and it is not yet sure if and how the organization continues after this period, the foreseeable future focus is shortened to two years. The data is collected by the lead author from primary and secondary documents and through 11 interviews with managers and stakeholders. Table 7 provides an overview of the desk research sources used.

Table 7 - Desk research sources

Type Sources Volume (pages)

Primary documents BioBRUG Project Proposal 1 (25) Disposition PidD 1 (14) Disposition EFRO 1 (11) Offers to SMEs 3 (10) Other official documents 4 (10) Primary documents stakeholders Programs 8 (406)

Sustainability reports 1 (57) (Half) Year reports 6 (639) Other primary documents 10 (245) Other sources Official websites 33

News websites 11 Blogs 2 (9) Magazines 3 (64) Essays 3 (95) Articles 2 (7) Literature 6 (112) Newsletters 2 Other sources 1 (6)

The data about power, interest, or goals was organized per stakeholder, with the associated reference added to the information.

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Table 8 - Interviewees and interview method

O = Organization, SH = Stakeholders P = Power, I = Interest, G = Goals

The interviews are recorded and transcribed. Memos were written throughout the data collection process (Jones & Alony, 2011). The interviews were conducted in Dutch (preferred language of all interviewees), and transcribed in Dutch3. This approach was used to preserve the interviews’ original meanings (Wong & Goodwin, 2009). Due to time pressure and a better overview, the transcription is not word by word, but summarized per variable time unit.

Due to confidentiality issues from here I will refer to the interviewees and desk research sources with an S number, as shown in table 9.

Table 9 - Overview of sources Source Source (perspective)

S1 Interviewee (O/SH) S2 Interviewee (SH) S3 Interviewee (SH) S4 Interviewee (SH) S5 Interviewee (O) S6 Interviewee (O) S7 Interviewee (O/SH) S8 Interviewee (SH) S9 Interviewee (SH) S10 Primary document (O/SH) S11 Project proposal (O) S12 Interviewee (SH) S13 Interviewee (SH) S14 Interviewee (SH) S15 Interviewee (SH)

S16 Other desk research data (O/SH)

As the stakeholder identification framework described, the collection of data can be divided in two parts: the identification of important stakeholders and the inventory of their goals. The collected data can be used for both parts. For each part a description is given.

3

The interview with the director of BioBRUG was not recorded, due to the absence of a recording device. Throughout this interview notes were written down, and directly after the interview the transcription was done, based on memory and the notes.

From which organization Position Perspective Interview method Type of analysis

BioBRUG Director O Face-to-face P, I, G

BioBRUG Manager O Face-to-face P, I, G

Steering committee Chairman O/SH Face-to-face P, I, G Steering committee/RUG/private investor Member/Professor O/SH Face-to-face P, I, G Steering committee/private business Member/Manager SH Phone P, I, G RUG Director service council SH Face-to-face P, I, G

RUG Professor SH Face-to-face I, G

Private investor 2/large firm Manager SH Face-to-face P, I, G

SME 1 Director SH Face-to-face P, I, G

SME 2 Director SH Face-to-face I, G

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Identifying important stakeholders

The identification process was based on step 1 in the stakeholder identification framework. The main source for desk research for identification of the stakeholders was the project proposal. Multiple “primary documents BioBRUG” and “other sources” have been used to get better knowledge of the BBE, the organization, and the interviewee. A search engine was used to find other sources online, with the terms “BioBRUG”, and “biobased economy”.

In addition to desk research semi-structured interviews (appendix 1) were held with 4 interviewees, two employees of BioBRUG and two steering committee members4. Another useful source for the identification of the important stakeholders are the interviews with the stakeholders. In these interviews they provide information about the power and interest of themselves, and of other stakeholders.

Inventory goals

The data gathering for the stakeholder’s goals is similarly done as that for the identification of stakeholders, and is based on step 2 of the stakeholder identification framework. Before an interview with a stakeholder, desk research was done. The stakeholder’s website was the main source of information, in addition “primary documents stakeholder”, “other documents” and managerial stakeholder interviews were used as sources for the inventory process. For the search engine, the stakeholder was added to the search term “BioBRUG + stakeholder5” and “stakeholder + biobased economy”. The sources were used to find stakeholder’s involvement with the BioBRUG, their goals, information about the interviewee (occupation, tasks, previous experiences, find interests that may be related to BioBRUG), information about the stakeholder (who or what are they and what do they do), what other organization might influence them (especially focused on relation with BioBRUG), and finally to create a preliminary hierarchy of goals.

This preparation gives a good base for a good semi-structured interview (van Aken et al., 2012). In the interview with the stakeholder I tried to indirectly validate the findings. In appendix 1, the template of the interview can be found. The questions can be customized per interviewee, based upon the acquired data from the desk research. With open questions, and follow-up questions, I tried to find validation, and deeper-understanding of the thoughts behind the goals. Because of this deeper-understanding, the data is less superficial and insights in the reasoning of vision of the stakeholder can give a better understanding of what the stakeholder really wants.

When during the interview no mention of a “desk researched” goal was given, sometimes was chosen to directly ask (depending on the perceived importance of the issue). Also the other way around, when subjects that were not identified in the desk research but were mentioned by the stakeholder, the goals were further questioned to get new insights. An interview technique helpful in bringing clarity and structure to the interview, is paraphrasing. A paraphrase is a restatement of the interviewee’s communication in the words of the interviewer (Kadushin & Kadushin, 1997). This helps the researcher’s interpretations to be validated or adjusted, and it is a good technique to

4

Because BioBRUG only has 2 managers, I chose to involve members of the steering committe since these are relatively closely involved with the BioBRUG.

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proceed to a new subject or new question. Another technique much used is the “silence technique”, wait for the other to continue his or her story, before you go on to a new subject.

For both parts the first thing to do after an interview is documenting the first interpretation. This means, writing down the remembered information, and give a first opinion/conclusion about this. Also write notable interpretations down, like on what subject the interviewee got exited or body language because this is harder or impossible to hear on tape (Jones & Alony, 2011). Then transcribe in document, and simultaneously write memos. Afterwards read all text again, and create summary of findings, while interpreting the data, also compare with other findings (again memos). Eventual later correspondence is added to the document.

Data analysis

For the data analysis a “template analysis” is used. This analysis is useful if one uses pre-defined codes based on the theory (Waring & Wainwright, 2008; van Aken et al., 2012). Because the identification of important stakeholders is based on theoretical understanding, the grounded theory approach is not useful for this work (Jones & Alony, 2011; van Aken et al., 2012). As described by Crabtree & Miller (1999), the template organizing style involves a coding of a large volume of text so that segments about an identified topic (the codes) can be assembled in one place to complete the interpretive process. This process exists of four steps (1) creating a code manual or coding scheme, (2) hand, or computer coding the text, (3) sorting segments to get all similar text in one place, and (4) reading the segments and making the connections that are subsequently corroborated and legitimized.

Because of the many interpretations a stakeholder and the organization could have of the topics used for this case, I kept the codes broad: power, interest, and goals. So all data (from interviews and desk research) that stated something about an attribute of a stakeholder was used. The test is manually coded. First by identifying quotes and statements about interest, power, or goals, and assigning it to the corresponding stakeholder. When all useful data was assigned to the right stakeholders, the data was sorted by power, interest and goal. The statements could be used for multiple stakeholders and codes. An example is given by S7 about the Uni 1’s interest in BioBRUG: “Knowledge of the RUG has to be transferred to firms, this is the reason that Uni 1 initiated BioBRUG“(S7: 3.45).

A Stakeholder Identification Framework for Nonprofit Organizations

A Stakeholder Identification Framework for Nonprofit Organizations

A BioBRUG Case

Perry Rood

Faculty of Economics and Business

A Stakeholder Identification Framework for Nonprofit Organizations

A BioBRUG Case

- Master thesis -

Perry Rood

Student number: 2171260

Groningen, June 21, 2013

University of Groningen

Faculty of Economics and Business

Master Business Administration – Small Business & Entrepreneurship

Supervisors:

Dr. O. Belousova

Dr. M.J. Brand

Prof. Dr. A.J. Groen

Prof. Dr. G.J.W. Euverink

Abstract

Table of Contents

Introduction

Literature review

Methodology