Reference no: EM132737876

Refer all answers to Customers of Nike Inc in relation to the questions:

• Explain in full detail why "defensive" stakeholder management strategy might be helpful for customers in Nike Inc as well as adding specific recommendations.
• Explain in full detail, use reliable references & evidence to why you chose that specific strategy
• Refer to as many academic references possible when answering this question

Defensive Strategy Stakeholder Management Strategies

A " defensive" stakeholder management strategy is appropriate for stakeholders with low cooperative potential but that poses a large potential strategic threat (Freeman et al., 2007a). Often these are large stakeholders that possess a large amount of resources and are very good at influencing politics and public opinion. They may be large suppliers or large customers or a bank that provides a large amount of operating capital to the firm.

Often firms consider these stakeholders friends, and the friendship should be defended because the potential harm to current value creation is high. That is firm, the firm should ensure that stakeholder feels treated fairly and with integrity - any wrongs, whether real or just perceived, should be righted immediately and generously. The general question is how to prevent the degeneration of current behaviour into threatening behaviour.

Because the stakeholder has low cooperative potential, the firm should not spend a great of time exploring opportunities for new ways to co-create value. For example, a firm may be tempted to, but probably should not, spend much time exploring new value-creating strategies with a large customer that has a great deal of power but that does not possess much potential for finding new ways to create value.

The best approach for managing this sort of stakeholder is through public relations combined with implicit negotiations that take into account their interests. The firm definitely should not ignore stakeholders and should listen to them if they have a suggestion for a new way to create value.

Sometimes a stakeholder that was previously assessed as having a low cooperative potential can switch to high potential because of a change in technology, the societal environment, or a really good but previously unexplored idea.