In what circumstances would each approach to stakeholder impact analysis (moral standards, five-question, and Pastin’s approach) be most useful? Summarize the approaches and describe when each would be most or least useful.
The three approaches to stakeholder impact analysis - moral standards approach, five-question approach, and Pastin's approach - each offer different perspectives and criteria for evaluating stakeholder impact. Each approach can be useful in different circumstances:
1. Moral Standards Approach:
This approach relies on established moral principles or ethical frameworks to evaluate stakeholder impacts. It considers whether stakeholders' rights, fairness, and equality are respected. The Moral Standards Approach is most useful when there is a need to align business actions with ethical principles and norms. It helps organizations identify and rectify any ethical violations and ensure that their decisions and actions align with commonly accepted moral standards.
2. Five-Question Approach:
The Five-Question Approach, also known as the "utilitarian" approach, evaluates stakeholder impacts based on the consequences of actions. It asks five critical questions: Who benefits? Who is harmed? Are there any alternative actions? What are the short-term and long-term consequences? And, are the benefits greater than the harm? This approach is most useful when organizations need to assess the overall positive or negative impact of their actions and make decisions that maximize overall benefits.
3. Pastin's Approach:
Pastin's approach focuses on stakeholder trust and loyalty. It considers the long-term relationship between a business and its stakeholders, seeking to ensure sustained trust and cooperation. The approach assesses whether an action is consistent with implicit or explicit promises made to stakeholders. It is most useful when organizations aim to build and maintain strong relationships and trust with stakeholders to achieve long-term success.
In summary, the Moral Standards Approach is most useful when aiming to align actions with ethical principles, the Five-Question Approach is useful when evaluating overall impacts and maximizing benefits, and Pastin's Approach is beneficial when building and maintaining stakeholder trust and loyalty. The choice of approach depends on the organization's values, objectives, and the specific context in which stakeholder impacts need to be assessed.