Stakeholder Management

Stakeholder management involves managing relationships between an organization and external stakeholders to maximize shareholder value. Two main approaches are discussed: the direct effects model, where manager attitudes directly impact financial performance, and the moderation model, where manager orientation moderates the relationship between competitive strategy and financial performance. Both models highlight the importance of stakeholder relationships in influencing financial outcomes.

Explain how stakeholder relationships can affect financial performance.

Summarize the two dominant views regarding stakeholder management.