Confronted with mounting pressure to ensure accountability vis-à-vis customers, citizens and beneficiaries, organizational leaders need to decide how to choose and implement so-called accountability standards. Yet while looking for an appropriate standard, they often base their decisions on cost-benefit calculations, thus neglecting other important spheres of influence pertaining to more broadly defined stakeholder interests. We argue in this paper that, as a part of the strategic decision for a certain standard, management needs to identify and act according to (...) the needs of all stakeholders. We contend that the creation of a dialogical understanding among affected stakeholders cannot be a mere outcome of applying certain accountability standards, but rather must be a necessary precondition for their use. This requires a stakeholder dialogue prior to making a choice. We outline such a discursive decision framework for accountability standards based on the Habermasian concept of communicative action and, in the final section, apply our conceptual framework to one of the most prominent accountability tools (AA 1000). (shrink)

Stakeholder theory advocates that firms bear responsibility for the implications of their actions. However, while a firm affects or can affect stakeholders, stakeholders can also affect the corporation. Previous stakeholder theorising has neglected the reciprocal nature of responsibility. The question can be asked whether—in a spirit of reciprocity, loyalty and fairness—stakeholders should treat the corporation in a fair and responsible way. This study based on different definitions of stakeholders argues that various stakeholder attributes differ for different categories (...) of stakeholders. This analysis presumes that the attribute of stakeholder reciprocity can probably be restricted to real stakeholders, labelled stakeowners: genuine stakeholders with a legitimate stake, the loyal partners who strive for mutual benefits. Stakeowners own and deserve a stake in the firm. Stakeholder reciprocity could be an innovative criterion in the corporate governance debate as to who should be accorded representation on the board. Corporate social responsibility should imply corporate stakeholder responsibility. (shrink)

Since its inception, Stakeholder Management Capability (SMC) has constituted a powerful hermeneutic through which business organizations have understood and leveraged stakeholder relationships. On this model, achieving a high level of capability largely depends on managerial ability to effectively bargain with stakeholders and establish solidarity vis-à-vis the successful negotiation, implementation, and execution of "win–win" transactional exchanges. Against this account, it is rightly pointed out that a transactional explanation of stakeholder relationships, regarded by many as the bottom line (...) for stakeholder management, fails to provide managerial direction regarding how to resolve a variety of normative stakeholder claims that resist commoditization. In response to this issue, this paper has two overlapping goals. It seeks to elaborate a discourse theoretical approach to the problem by first drawing out Jurgen Habermas’ theory of communicative action and delineating the various types of rational discourse. Second, the paper attempts to present concrete implications for SMC relative to reshaping the contours of rational, process, and transactional analysis in light of central discourse theoretical conclusions. (shrink)

This article is a first attempt to line out the conditions under which executives might have a real self-interest in pursuing a broad stakeholder management (SM) orientation to enlarge their power. We suggest that managers have wider latitude of action under an SM approach, even when this is instrumental to financial performance. The causally ambiguity of the performance effects of idiosyncratic relationships with stakeholders not only makes SM strategy difficult for competitors to imitate but also increases managerial discretion. (...) When managers use this situation for their own benefit, they can undermine the purported goals of the SM approach. By analyzing some of the factors that might lead to such disfunctionalities, this article advances a theory of the potential dark side of SM. (shrink)

Abstract:This article elaborates a normative Stakeholder Management Theory (SHMT) from a critical theory perspective. The paper argues that the normative theory elaborated by critical theorists such as Habermas exhibits important advantages over its rivals and that these advantages provide the basis for a theoretically more adequate version of SHMT. In the first section of the paper an account is given of normative theory from a critical theory perspective and its advantages over rival traditions. A key characteristic of the (...) critical theory approach is expressed as a distinction between three different normative realms, viz., legitimacy, morality, and ethics. In the second section, the outlines of a theory of stakeholder management are provided. First, three basic tasks of a theoretically adequate treatment of the normative analysis of stakeholder management are identified. This is followed by a discussion of how a critical theory approach to SHMT is able to fulfill these three tasks. (shrink)

Stakeholder theory scholars have recently addressed two crucial calls: the first is for the integration of strategy and ethics, of stakeholder theory and strategic management, and the second call is for the development of a dynamic approach to stakeholder management. I have attempted to answer these calls by developing a theoretical framework that links together stakeholder management, stakeholder commitment to cooperate with the firm, key decision makers’ ethical commitment, and firm strategy. Starting (...) from the basic assumption that managers cannot meet all stakeholders’ demands immediately and in a tailored manner, I contend, first, that an ambidextrous approach to stakeholder management is conducive to stakeholders’ commitment to cooperate for the sustainable well-being of the firm and, second, that firm strategy and key decision makers’ ethical commitment moderate the relationship between an ambidextrous stakeholder management and stakeholder commitment to cooperate. Furthermore, drawing on this theoretical framework, I attempt to address the call for the integration of strategy and ethics by proposing a three-level conceptual model that distinguishes the objectives, the field, and the levers of integration. Finally, I outline a set of propositions that, taken together, represent a first attempt to develop a dynamic approach to stakeholder management. (shrink)

Instrumental stakeholder theory seeks to explain how managing stakeholders effectively can yield competitive advantage for incumbent firms. We extend instrumental stakeholder theory to explain and predict future competition operationalized as new entrepreneurial entries. Our study is among the first to empirically examine the relationships between aggregate stakeholder management performance and the entrepreneurial entries of individuals. Using a combined U.S. dataset from 2003 to 2013 from the Kinder, Lydenberg and Domini Index, Compustat, and Kauffman’s Entrepreneurship Survey, we (...) find support for three hypotheses. First, higher levels of stakeholder management performance are related to lower rates of entrepreneurial entry. Second, a curvilinear relationship exists between stakeholder management performance and entrepreneurial entry, where both low and very high stakeholder management performance increase entrepreneurial entry. Third, the greater the variance in stakeholder management performance across stakeholders, the more entrepreneurial entry. Our findings suggest that managing for stakeholders can help to avoid future competition. We add an entrepreneurship lens to the business ethics of stakeholder theory showing how incumbent stakeholder management performance shapes opportunities for entrepreneurs, a largely neglected stakeholder group. (shrink)

Business and Society: Ethics and Stakeholder Management, 5th edition employs a stakeholder management framework, emphasizing business' social and ethical responsibilities to both external and internal stakeholder groups. A twin theme of business ethics to illustrate how ethical or moral considerations are included the public issues facing organizations and the decision making process of managers. The text is written from a managerial perspective that along with the twin themes of stakeholders and ethics, shows how to identify (...) stakeholders, incorporate their concerns into the organization's strategy and operations, and also integrate ethical wisdom into their decision making process. In addition, 35 case histories are included to help connect theory and practice through timely and interesting examples. (shrink)

This paper explores the managerial aspects of the relationship with stakeholders, under the assumption that transfer of knowledge is being made from relationship marketing and market orientation perspectives. These marketing tools may prove useful to manage the relationship with other stakeholders, as has been the case with customers. This study focuses on a sample of Spanish companies representing 43% of listed companies with the largest market capitalization. Given that this is the first time that corporate relationship with stakeholders is analyzed (...) in Spain, a qualitative technique (case analysis) was used. The main conclusion of the study is that most of the participant companies have a reactive position vis-à-vis stakeholders management systems. This attitude is reflected in their concern exclusively about ethical indexes managers. (shrink)

PurposeGiven the seeming lack of research on the influence of stakeholder activities on organisations such as political parties in the online environment, the purpose of this paper is to empirically investigate how political parties use their web sites to serve and manage their relationships with stakeholders.Design/methodology/approachThis is a qualitative paper, in which a cross‐national comparative analysis has been conducted on four illustrative cases. Personal interviews and web site observations were used as the main data collection methods. Three concurrent flows (...) of activities, i.e. data reduction, data display, and conclusion drawing, have been applied in the data analysis.FindingsThe paper indicate that the stakeholders served by political parties on the web sites studied can be grouped into two categories: internal and external. This paper also revealed that another very important internal stakeholder group overlooked by previous studies is that of core party members.Originality/valueThe paper provides insights and new interesting empirical material which may help to strengthen the theoretical understanding stakeholder management in cyber politics. (shrink)

In recent times there have been scores of corporate failures all over the world due to moral turpitude, lack of good governance, and erosion of values. The need for a change in corporates’ approach towards stakeholder management is greater now than ever before. Though the term ‘stakeholder’ was first used in the West in the 1930s, this concept has been highlighted in the ancient Indian scriptures written centuries ago. These highlight the methodologies the kings used to ensure (...) the welfare of all their stakeholders. The kings of yore, who considered themselves as trustees of their kingdom, can be compared to the top management in corporates of this era. Thus, the concepts highlighted in these ancient scriptures find as much relevance and applicability even in today's times. This article takes a brief look at few of the studies undertaken in this area and also highlights excerpts from the ancient Indian scriptures to prove that the concept of stakeholder management owes its origin to India. (shrink)

Stakeholder management devices (SMDs) are the mechanisms through which organizations respond to stakeholder concerns. Given that SMDs serve as organizational control systems for employees and managers, this research investigates the internal rather than the external effects of a firm's SMDs. Unlike most previous research, I examined the effects of these formal structures, processes, and procedures in the aggregate, rather than focusing attention on a single type of device. The study investigates the effects of a firm's stakeholder (...) management devices, in the aggregate, on three factors that influence individual behavior in organizations: expectations, attitudes, and perceived organizational climates. Respondents were managers in 112 for-profit businesses located throughout the United States. Results suggest that a firm's stakeholder management devices affect the perceived moral climates in the firm, and affect managers' expectations about the consequences of good corporate social performance, but do not affect organization members' attitudes about corporate social responsibility. (shrink)

The problem of opportunity discovery is at the heart of entrepreneurial activity. Cognitive limitations determine the search for and the analysis of information and, as a consequence, constrain the identification of opportunities. Moreover, typical personal characteristics – locus of control, need for independence and need for achievement – suggest that entrepreneurs will tend to take a central position in their stakeholder environments and thus fail to adapt to the complexity of stakeholder relationships in their entrepreneurial activity. We approach (...) this problem by adopting a network perspective on stakeholder management. We propose a heuristic approach of stakeholder analysis, which requires two mappings of the entrepreneurial constituents. The first mapping focuses on current interactions between the entrepreneur and their stakeholders, while the second focuses on a specific issue and the stakeholders that constitute it. In effect, such a stakeholder analysis requires entrepreneurs to use the complexity of stakeholder relationships in order to go beyond their cognitive limitations and thus facilitate the discovery of new opportunities. As we will argue, this has clear implications for the ethics and activities of entrepreneurs. (shrink)

Stakeholder management is an important method for reducing business risk. Recent decades have seen the growth of a new type of stakeholder: social protest stakeholders, individuals engaging in protest action which is directed at other unrelated parties, often the government. However, the actions of social protest stakeholders may negatively affect companies located nearby. This stakeholder category has not received any formal attention in the literature, and this article addresses the knowledge gap by exploring the effects of (...) community-driven protest action in South Africa and the strategies that firms adopt to mitigate the negative consequences of such protests. A multiple case study analysis was used to describe this type of stakeholder group and the management of the consequences of social protest action. Eight manufacturing companies in the Gauteng province participated in the study, the companies varied in size and industry. Among the key findings are that companies need to be highly adaptable if they are to mitigate the impact of protest action. We make practical suggestions about how companies may manage these risks, including the recommendation that companies engage more directly with social protestors to manage risks. The study makes an important contribution to the literature by identifying an additional key category of stakeholder and proposing a risk management approach to avert or minimize loss and damage. (shrink)

To mitigate risk, should companies signal a broad range of environmental, social, and governance initiatives or instead focus on only a few ESG issues? Drawing on signaling theory, we propose that a broad array of ESG initiatives generates not only signal consistency but also accelerating signal costs. Our empirical results support the resultant hypothesis of a curvilinear relationship between ESG scope and equity risk. In addition, this U-shaped curve seems to become steeper when firms face multiple media-reported ESG controversies. Overall, (...) our study qualifies the conventional wisdom that firms can reduce equity risk by attending to a wide variety of stakeholders and highlights the moderating impact of the firm’s media environment. (shrink)

Stakeholder theory is a pertinent example of a framework that has been stretched over many conceptual contexts and that has been applied to a wide variety of empirical phenomena. A pressing issue involves the scope of application of stakeholder theory, however, because it is not a comprehensive ethical scheme or problem-solving algorithm. We begin our search for the boundaries of stakeholder management by identifying a presently under-acknowledged yet major underlying assumption, notably that the approach is rooted (...) in voluntary action and association. Building on this presumption, we argue that firm - stakeholder relationships are best to be understood in contractualist terms; i.e. as voluntary arrangements between two or more parties seeking mutual benefit. This assertion subsequently allows us to identify three boundary conditions applying to stakeholder theory: (1) the parties should be sufficiently autonomous; (2) their interests need to be alignable; and (3) they should be capable of living up to their commitments. We substantiate these criteria with evidence from a collective case study of buyer - supplier relationships in the Dutch manufacturing sector, demonstrating that the stakeholder management model fails when these boundary criteria are violated. (shrink)

From an analysis of the role of companies in multi-stakeholder networks and a critical review of stakeholder theory, it is argued that companies practise two different types of stakeholder management: they focus on their organization’s welfare (organization- focussed stakeholder management) or on an issue that affects their relationship with other societal groups and organizations (issue-focussed stakeholder management). These two approaches supplement each other. It is demonstrated that issue-focussed stakeholder management dominates (...) in multi-stakeholder networks, because it enables corporations to address complex problems and challenges in cooperation with stakeholders. Since deliberation is the key to issue-focussed stakeholder management, it helps to cope with numerous and at times contradictory stakeholder demands and enhances the legitimacy of corporate activities. (shrink)

We propose adding a temporal dimension to stakeholder management theory, and assess the implications thereof for firm-level competitive advantage. We argue that a firm’s competitive advantage fundamentally depends on its capacity for stakeholder management related, transformational adaptation over time. Our new temporal stakeholder management approach builds upon insights from both the resource-based view (RBV) in strategic management and institutional theory. Stakeholder agendas and their relative salience to the firm evolve over time, a (...) phenomenon well understood in the literature, and requiring what we call level 1 adaptation. However, the dominant direction of stakeholder pressures can also change, namely, from supporting resource heterogeneity at the firm level to fostering industry homogeneity, and vice versa. When dominant stakeholder pressures shift from supporting heterogeneity towards stimulating homogeneity in industry, the firm must engage in level 2 or transformational adaptation. Stakeholders typically provide valuable resources to the firm in an early stage . Without these resources, which foster heterogeneity (in line with RBV thinking), the firm would not exist. At a later stage , stakeholders also contribute to inter-firm homogeneity via isomorphism pressures (in line with institutional theory thinking). Adding a temporal dimension to stakeholder management theory has far reaching implications for this theory’s practical relevance to senior level management in business. (shrink)

This article explores the relationship between stakeholder management and international diversification. We differentiate between strengths and concerns in stakeholder management to demonstrate the differential effects of the two aspects of stakeholder management. Previous research on stakeholder theory often focuses on the importance of stakeholder relations, trying to build a business case of relational capital that results from strong stakeholder management. Such a relational approach, however, overlooks the process of managing stakeholders, (...) a process that allows firms with strengths in stakeholder management to develop an important capability of managing tensions. In this study, we argue that this capability, an inherent part of stakeholder management, can be critical when firms face increased complexity during the process of international diversification. We therefore propose that strengths in stakeholder management are positively related to international diversification, while concerns in stakeholder management are negatively related to international diversification. Using panel data for 169 US multinational firms over a 10‐year period, we find support that strengths in stakeholder management facilitate international diversification. We discuss the contributions of our findings to stakeholder theory and international business research. (shrink)

The accuracy of corporate mission statements has not been well explored. In this study, the authors investigate the relationship between mission statement content and stakeholder management actions. Findings indicate that although social issues such as the environment and diversity are less frequently included, their mention in mission statements is significantly associated with behaviors regarding these issues. The study found no relationship between firms with mission statements that mention specific stakeholder groups (employees, customers, and community) and behaviors regarding (...) these stakeholders. This suggests that the inclusion of specific stakeholder groups in missions is likely the result of institutional pressures, while specifying social issues in missions is related to policy decisions. (shrink)

Empirical research is largely supportive of the assertion of instrumental stakeholder theory that a positive relationship exists between “managing for stakeholders” and firm performance. However, despite considerable debate on the subject, the amount of variation across firm investments in stakeholders (stakeholder management performance) has not been adequately investigated. We address this gap using a sample of more than eighteen thousand firm-level observations over ten years. We find evidence to support an inverted U–shaped relationship between variation in (...) class='Hi'>stakeholder management performance and Tobin’sq, suggesting that firms that have some imbalance in their stakeholder management, but not too much, perform best. We discuss the implications of our study for instrumental stakeholder theory and managerial practice. (shrink)

This study offers a theoretical framework for stakeholder management in an international and multicultural environment. Through the use of an extensive qualitative case study analysis, a methodological approach was developed for analyzing stakeholder dialogue data for cultural differences. Based on the empirical data it was possible to show specific ways in which cultural dimensions affect the international diffusion of stakeholder related policies. These findings contribute to the fields knowledge on internal stakeholder management implementation, by (...) addressing the complexity of embedding stakeholder management principles and practices within various international subsidiaries of the same multinational organization. (shrink)

Since scholarly interest in corporate social responsibility (CSR) has primarily focused on the synergies between social and economic performance, our understanding of how (and the conditions under which) companies use CSR to produce policy outcomes that work against public welfare has remained comparatively underdeveloped. In particular, little is known about how corporate decision-makers privately reconcile the conflicts between public and private interests, even though this is likely to be relevant to understanding the limitations of CSR as a means of aligning (...) business activity with the broader public interest . This study addresses this issue using internal tobacco industry documents to explore British-American Tobacco’s (BAT) thinking on CSR and its effects on the company’s CSR Programme. The article presents a three-stage model of CSR development, based on Sykes and Matza’s theory of techniques of neutralization, which links together: how BAT managers made sense of the company’s declining political authority in the mid-1990s; how they subsequently justified the use of CSR as a tool of stakeholder management aimed at diffusing the political impact of public health advocates by breaking up political constituencies working towards evidence-based tobacco regulation; and how CSR works ideologically to shape stakeholders’ perceptions of the relative merits of competing approaches to tobacco control. Our analysis has three implications for research and practice. First, it underlines the importance of approaching corporate managers’ public comments on CSR critically and situating them in their economic, political and historical contexts. Second, it illustrates the importance of focusing on the political aims and effects of CSR. Third, by showing how CSR practices are used to stymie evidence-based government regulation, the article underlines the importance of highlighting and developing matrices to assess the negative social impacts of CSR. (shrink)

Over the last few years, there has been an exaggeratedly widespread and frequently confused use of the concepts of 'stakeholder' and 'corporate social responsibility'. However, some interesting insights of both these notions can be found in traditional European business administration studies. In this article, the Italian view will be examined. In particular, this paper investigates the teachings of some of the historical masters of the Italian "Economia Aziendale" (EA), with particular attention to the concept of the azienda, its finalism (...) and its essential characteristics, in order to verify some consistencies with the more recent Stakeholder Management Theory (SMT). Principles and considerations seem to emerge from EA scholars' seminal works that unequivocally connect ethics with business decisions. EA fits in with SMT in many ways, and the former (EA) seems, moreover, to suggest a specific normative point of view from which the role of ethics in business activities can be approached. (shrink)

Despite rich theoretical development, empirical research on stakeholder management is scant, save its relationship with financial performance. Recent research shows significant intrafirm variability in stakeholder management across time. This study seeks to explain why firms would experience significant changes in stakeholder management. Adapting Wood’s framework to discuss three principles of stakeholder management, the authors identify antecedents of change at the institutional, organizational, and executive levels. Pressures for legitimacy at the institutional level suggest (...) that firm age and size, along with industry shifts in stakeholder management, will increase the likelihood of changes in stakeholder management for the focal firm. The authors posit that organizational risk and performance will also affect the likelihood of change, as will managerial discretion, ownership, and succession. The authors test their predictions using a longitudinal sample of stakeholder management data and discuss the implications of the findings for research and practice. (shrink)

Adopting an instrumental approach for stakeholder management, we focus on two primary stakeholder groups to investigate the relationship between employee treatment and loan contracts with banks. We find strong evidence that fair employee treatment reduces loan price and limits the use of financial covenants. In addition, we document that relationship bank lenders price both the levels and changes in the quality of employee treatment, whereas first-time bank lenders only care about the levels of fair employee treatment. Taking (...) a contingency perspective, we find that industry competition and firm asset intangibility moderate the relationship between good human resource management and bank loan costs. The cost reduction effect of fair employee treatment is stronger for firms operating in a more competitive industry and having higher levels of intangible assets. (shrink)

Over the last few years, there has been an exaggeratedly widespread and frequently confused use of the concepts of 'stakeholder' and 'corporate social responsibility'. However, some interesting insights of both these notions can be found in traditional European business administration studies. In this article, the Italian view will be examined. In particular, this paper investigates the teachings of some of the historical masters of the Italian "Economia Aziendale", with particular attention to the concept of the azienda, its finalism and (...) its essential characteristics, in order to verify some consistencies with the more recent Stakeholder Management Theory. Principles and considerations seem to emerge from EA scholars' seminal works that unequivocally connect ethics with business decisions. EA fits in with SMT in many ways, and the former seems, moreover, to suggest a specific normative point of view from which the role of ethics in business activities can be approached. (shrink)

The vast majority of empirical research on stakeholder management has traditionally focused on multinational corporations. Only in recent years, scholars have begun to pay attention to the stakeholder management concept in relation to small- and medium-sized enterprises (SMEs). The few existing studies in this area, however, discuss SMEs as a context free category or remain focused on single country analysis. This cross-national empirical research investigates SME owner–managers’ perceptions of stakeholder management in six European countries. (...) The comparative analysis is followed by a discussion of how institutional, cultural and linguistic contexts can influence owner–managers’ sensemaking of stakeholder management. Our study questions the universality of specific management terms and proposes that more attention should be paid to the institutional, cultural and linguistic environments that shape economic activity in different parts of Europe. (shrink)

This paper presents a theoretical and practical approach to teaching business ethics, stakeholder management and CSR within the framework of the thematic seminar on business ethics and corporate social responsibility at Roskilde University. Within our programs in English of business studies and Economics and Business Administration the author of this article is responsible for this seminar that integrates issues of CSR and the ethics of innovation into the teaching ofcorporate social responsibility, stakeholder management and business ethics. (...) This research oriented seminar provides a unique possibility for teaching CSR with an integration of methodological, theoretical and practical dimensions of business ethics. The idea is that the thematic seminar represents a tutor supported frame for extended studies of business ethics, stakeholder management and the social aspects of business and entrepreneurship. Each student shall present a paper on the basis of a collection of articles on the topic of ethics and social dimension of business. Moreover, it is required that the student is discussant of two other papers during the course. In addition, students shall prepare interactive participation in discussion of each paper. The sessions begin with a short introduction to the topic by the professor, then student presentations, after this discussant remarks, and finally general discussion followed by an evaluative assessment by the professor. During the seminar the student shall present both theory and case discussion so that we find a close interaction between theory and practice in the presentation. In the following, the paper elaborates on this development, in particular in the relation between theory presentation and case studies. (shrink)

In this paper, we draw upon the emerging view of strategic cognition and issue salience and show that CSR giving has evolved into more than an altruistic response to being asked for support, to one which is embedded in the strategic frames of management and which supports organizational identity. The managerial action as a result of such strategic cognition suggests that modern organizations are seeking to develop CSR giving processes that provide them with a competitive advantage. We draw on (...) the resource-based view of organizations and the VRIO framework to provide the theoretical foundations for our argument that CSR implementation in the form of corporate giving to charities can be developed as a dynamic capability. This can provide a competitive advantage by allowing organizations to manage key stakeholder relationships more effectively with benefits which could lead to increased organizational productivity and the ability to execute strategy more effectively. We interview CSR implementation managers from large organizations in Australia and find that the CSR giving process in many firms is evolving into a more sophisticated and strategically motivated process with expectations of a return. Central to this evolution is the appointment of a CSR implementation manager who acts as a boundary spanner between the organization and its key stakeholders. We posit that this corporate investment in their role and supporting structures can lead to the better management of stakeholders by organizations through the dynamic capability of the CSR giving process. We develop a table of best practise to help guide managers entering this sphere. (shrink)

The case "Caprica Energy and Its Choices" concerns a fictionalized energy corporation choosing between three potential drilling sites. According to the published Teaching Note, the case is an exercise in the stakeholder approach to business: it requires balancing profit considerations with potential harm to those who live near those drilling sites. Though unintended, the case raises a further question not addressed in the case or in the Teaching Note: what gives Caprica Energy the right to impose risk on members (...) of the communities surrounding its drilling sites? The first section of the present article argues that, in such cases, manage- ment can only justify imposing risk on the local community by securing those stakeholders' consent. The second section outlines the implications for stakeholder theory and stake- holder management. The third section outlines one con- nection between this material and recent literature on the imposition of risk and moral theory; that section offers an account of what make this particular instance of imposing risk morally problematic, with reference to the directedness of the imposition. (shrink)

We examine the role of managers in controlling the positive impact of stakeholder management (SM) on firm financial performance (FP) in the long term. We develop and test competing hypotheses on whether managers act as “good citizens” or engage in “self‐dealing” when allowed greater discretion. We test our assertions using dynamic panel data analysis of a sample of 806 U.S. public firms operating in 34 industries over 5 years (2005–2009). Our results indicate a nuanced influence of managerial discretion (...) contexts on the SM‐FP relationship. We infer that given more latitude in decision making, as long as the “going is good” managers act as good citizens, but otherwise they revert to managerial self‐dealing. In light of our results, firms designing governance mechanisms to encourage managers to balance the needs of both shareholders and stakeholders must remain cognizant of contextual contingencies. (shrink)

The vast majority of empirical research on stakeholder management has traditionally focused on multinational corporations. Only in recent years, scholars have begun to pay attention to the stakeholder management concept in relation to small- and medium-sized enterprises (SMEs). The few existing studies in this area, however, discuss SMEs as a context free category or remain focused on single country analysis. This cross-national empirical research investigates SME owner–managers’ perceptions of stakeholder management in six European countries. (...) The comparative analysis is followed by a discussion of how institutional, cultural and linguistic contexts can influence owner–managers’ sensemaking of stakeholder management. Our study questions the universality of specific management terms and proposes that more attention should be paid to the institutional, cultural and linguistic environments that shape economic activity in different parts of Europe. (shrink)

As 'disruption' is currently becoming the new buzzword in boardrooms, this book advocates that the most striking opportunity for business today is making itself relevant to its stakeholders. By presenting a new route via innovative business models, a transformational corporate approach to stakeholder-orientated value creation is advocated in the form of a new stakeholder management framework. This conceptual framework provides both a theoretical and practical management solution for re-inventing the organisation via an enlightened perspective of the (...) purpose of business in society. The new approach transforms the existing business model via an inclusive, collaborative, connected mechanism of stakeholder value creation into an innovative business model through which the corporation mobilises the investment, conversion, and sustainability of the resources it employs in ways which are designed to be optimally relevant to its stakeholders. The overall impact results in innovative business models serving as catalysts for creating stakeholder-orientated value in place of the traditional, more narrowly-focused shareholder profit-maximisation aim of conventional business models. (shrink)

This case examines how IBERDROLA, Spain’s leading electricity supplier, shifted the company’s strategic focus to concentrate on sustainability and turned it into a source of competitive edge in a liberalized market. Largely pre-empting the industry obligations that came out of the Kyoto agreement, IBERDROLA decided to put sustainability at the heart of the company’s decision-making processes. IBERDROLA sold off its most polluting facilities and all non-core activities to concentrate on becoming the greenest player on the market. Its success was due (...) to its willingness to walk the talk, to get stakeholders on side, and to demonstrate its determination to be a corporate citizen. An important element of the strategy was to establish a working relationship with important NGOs and effect their involvement with IBERDROLA’s activities. An early and uneasy partnership with WWF/Adena over the production of green energy proved a sharp learning curve for both parties. Then in 2004 a relatively minor event triggered a chain of reactions that led to a revolution in the company’s policy of stakeholder integration. A small group of protected birds was killed when they flew into the blades at one of IBERDROLA’s wind power facilities. When previous similar crises had occurred, IBERDROLA had dealt with them through the time-honoured methods of dialogue and confrontation. This time, IBERDROLA decided to initiate a new approach. They invited SEO/BirdLife (the Spanish Ornithology Society), the oldest Spanish NGO dedicated to the environment, to undertake a study into the implications of similar installations on bird conservation and the environment. The intention is for this collaboration to lead to a strategic agreement between both parties. (shrink)

This case examines how IBERDROLA, Spain’s leading electricity supplier, shifted the company’s strategic focus to concentrate on sustainability and turned it into a source of competitive edge in a liberalized market. Largely pre-empting the industry obligations that came out of the Kyoto agreement, IBERDROLA decided to put sustainability at the heart of the company’s decision-making processes. IBERDROLA sold off its most polluting facilities and all non-core activities to concentrate on becoming the greenest player on the market. Its success was due (...) to its willingness to walk the talk, to get stakeholders on side, and to demonstrate its determination to be a corporate citizen. An important element of the strategy was to establish a working relationship with important NGOs and effect their involvement with IBERDROLA’s activities. An early and uneasy partnership with WWF/Adena over the production of green energy proved a sharp learning curve for both parties. Then in 2004 a relatively minor event triggered a chain of reactions that led to a revolution in the company’s policy of stakeholder integration. A small group of protected birds was killed when they flew into the blades at one of IBERDROLA’s wind power facilities. When previous similar crises had occurred, IBERDROLA had dealt with them through the time-honoured methods of dialogue and confrontation. This time, IBERDROLA decided to initiate a new approach. They invited SEO/BirdLife (the Spanish Ornithology Society), the oldest Spanish NGO dedicated to the environment, to undertake a study into the implications of similar installations on bird conservation and the environment. The intention is for this collaboration to lead to a strategic agreement between both parties. (shrink)

This case examines how IBERDROLA, Spain’s leading electricity supplier, shifted the company’s strategic focus to concentrate on sustainability and turned it into a source of competitive edge in a liberalized market. Largely pre-empting the industry obligations that came out of the Kyoto agreement, IBERDROLA decided to put sustainability at the heart of the company’s decision-making processes. IBERDROLA sold off its most polluting facilities and all non-core activities to concentrate on becoming the greenest player on the market. Its success was due (...) to its willingness to walk the talk, to get stakeholders on side, and to demonstrate its determination to be a corporate citizen. An important element of the strategy was to establish a working relationship with important NGOs and effect their involvement with IBERDROLA’s activities. An early and uneasy partnership with WWF/Adena over the production of green energy proved a sharp learning curve for both parties. Then in 2004 a relatively minor event triggered a chain of reactions that led to a revolution in the company’s policy of stakeholder integration. A small group of protected birds was killed when they flew into the blades at one of IBERDROLA’s wind power facilities. When previous similar crises had occurred, IBERDROLA had dealt with them through the time-honoured methods of dialogue and confrontation. This time, IBERDROLA decided to initiate a new approach. They invited SEO/BirdLife (the Spanish Ornithology Society), the oldest Spanish NGO dedicated to the environment, to undertake a study into the implications of similar installations on bird conservation and the environment. The intention is for this collaboration to lead to a strategic agreement between both parties. (shrink)

This book presents an academic introduction, presentation and argument of stakeholder theory as as a model for strategic management of business firms and corporations and public organizations and institutions. The concept of stakeholder is generally used for the parties that affect or are affected by the activities of private or public organizations. Stakeholders are those interested parties who, other than shareholders, have a connection with the activities of a corporation, a firm or an organization. The reference to (...) the stakeholders refers to a conception of a business firm as founded on negotiated governance, where the maximization of the value for the shareholder is not the ultimate criterion. In this model the stakes and the interests that are not those of shareholders or investors, and which go beyond capital and include civil society, are important. This book presents this theory and makes it known as an ethical model for strategic management that is both concrete and useful for developing democracy in the firm, and making it possible to present elements of a social contract in the context of global capitalism. (shrink)

This paper describes a structured approach to the selection of an analytic strategy for cross-case analysis and a method for data display. To this end, criteria will be developed addressing both, aspects of scientific rigor as well as the practicability of application and the application of the decision process will be demonstrated.