Stakeholder theory focuses on how more value is created if stakeholder relationships are governed by ethical principles such as integrity, respect, fairness, generosity and inclusiveness. However, it has not adequately addressed strategies that stakeholders perceive as harmful to their interests and how this perception can even lead some stakeholders to view the firm’s strategies as unethical. To fill the void, this paper directly addresses strategies that stakeholders perceive as harmful to their interests, or what we (...) refer to as harmful stakeholder strategies. Specifically, it identifies factors associated with stakeholder perceptions of harm that are likely to cause them to consider a strategy unethical, examines the negative implications for firms that pursue such strategies in terms of likely stakeholder responses and damage to stakeholder relationships, and provides theory to help explain how firms are likely to respond to stakeholder claims that a strategy is unethical, based on factors such as the strategic importance of the claim to the firm, how long the strategy has been in use, the costs of remediation, the risk of stakeholder mobilization or new regulation, and whether firms can reasonably rationalize their actions. Assessing harm allows a firm to make a more accurate estimate of the costs of a strategy and can assist managers in allocating resources intended to reduce or remediate harm. (shrink)

Using Frooman’s typology of stakeholder influence strategies, this research examines the strategies that stakeholders select to exert influence on a firm. Using an experimental approach, the responses of actual environmental leaders to a series of hypothetical vignettes were examined. The results of the experiment suggest how both structural and demographic variables can act as determinants of strategy choice along with how these two types of variables may both complement and inhibit one another. Specifically, the results suggest that (...) repertoires of strategies play a critical role in stakeholder behavior. Demographic variables appear to define the repertoires of strategies the stakeholder will typically choose among, whereas structural variables further refine choice from within that repertoire. (shrink)

In the present study, I sought to more fully understand stakeholder organizations’ strategies for influencing business firms. I conducted interviews with 28 representatives of four environmental non-governmental organizations (ENGOs): Natural Resources Defense Council (NRDC), Greenpeace, Environmental Defense (ED), and Union of Concerned Scientists (UCS). Qualitative methods were used to analyze this data, and additional data in the form of reviews of websites and other documents was conducted when provided by interviewees or needed to more fully comprehend interviewee’s comments. (...) Six propositions derived from Frooman (1999) formed the basis for the initial data analysis; all six propositions were supported to some extent. Perhaps more interestingly, the data revealed that Frooman’s model is too parsimonious to adequately describe stakeholder influence strategies and related alliances, necessitating the development of an alternative theoretical model grounded in the data collected. (shrink)

Practitioners and leading scholars emphasize the need of integrating the notion of stakeholder more systematically into strategy theory. In corporate reality, this process has been on its way for quite some time because companies realized that a one-sided orientation to short-term shareholder value is a too narrow conception for strategic management, especially since firms’ strategically relevant resources today are not purely of financial nature but most importantly knowledge oriented. This paper will evaluate some insights into good practices of strategic (...) stakeholder management in the financial services industry and the telecommunications industry of Switzerland in order to stimulate the ongoing learning process in strategic stakeholder management. The results do support appropriateness of stakeholder management in situations of turbulence and as useful extension of conventional approaches in strategic management. (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)

This study examines the influence of stakeholder pressures and family ownership on strategic decarbonization choices of German Mittelstand firms. It distinguishes between _symbolic_ strategies focusing on compensating CO 2 -emissions and _substantive_ strategies directed toward reducing carbon emissions. The relative pressure exerted by _internal_ and _external_ stakeholders on these strategic choices is examined. Data from 443 manufacturing firms reveal that overall stakeholder pressures increase the pursuit of decarbonization strategies. Internal stakeholders pressures are associated with increased (...) reliance on substantive decarbonization strategies both in family-owned and non-family-owned firms. Pressure from external stakeholders are associated with increased reliance on both substantive and symbolic decarbonization strategies only in non-family-owned firms. No effect of external pressures was found in family-owned firms. Implications for theory, management practice, and policy makers are discussed. (shrink)

This study contributes to understanding stakeholder engagement strategies by examining competitive responses alongside sociopolitical implications after a major exogenous shock—the 1998 Master Settlement Agreement (MSA) between the “Big Four” U.S. tobacco firms and 46 state attorneys general. We compare the different stakeholder engagement strategies of the two remaining U.S. tobacco manufacturers, Philip Morris (PM) and R. J. Reynolds (RJR), between 1998 and 2017. Implications for stakeholder theory from a relatively rare natural experiment highlight the importance (...) of simultaneously managing multiple stakeholders, inclusive of domestic and international sociopolitical and value chain stakeholders over time, for sustained value creation. Although PM and RJR initially pursued heterogeneous strategies by re-configuring relationships with relevant stakeholders, each firm’s growth prospects for the first decade post-MSA were exacerbated by various stakeholders through withholding and selective engagement strategies. Implications for how multiple, simultaneous stakeholder relationships can serve as important resources for achieving or limiting sustained growth are discussed. (shrink)

This study attempts to establish the importance of firm-level interactions with sociopolitical stakeholders in explaining firms prospects for survival. Institutional arguments are proposed to explain the effects of internal structures-both organizational and phenomenological-on firms sociopolitical relational strategies, whereas arguments grounded in the stakeholder view of the firm are advanced to explain effects of sociopolitical stakeholder relations on firm performance. Findings indicate that firms tended to adopt cooptative relationships with sociopolitical stakeholders. Furthermore, firms cooperativeness toward sociopolitical stakeholders had (...) little effect on financial performance but, under some conditions, had positive effects on social performance. Implied is that markets may not be an effective governance mechanism to ensure firms alignment with democratic institutions in a plural society and that public policies may be needed to address these failures. (shrink)

Labor unions are key stakeholders in the field of corporate social responsibility but researchers have paid surprisingly little attention to their CSR strategies. This article extends stakeholder theory by treating unions as having stakeholders that influence their CSR strategies. Drawing on qualitative data from a longitudinal study on selected unions in France between 2006 and 2013, this paper analyzes the underlying reasons for the differences in their approaches. It finds connections between the unions’ CSR strategy, and the (...) perception of and cooperation with stakeholders. (shrink)

Modern management reporting on its company''s performance is influenced by individuals ethical considerations. Stakeholders philosophies have continued to change over the last 75 years affecting reporting systems for companies reporting information internally and externally. These fundamental changes in philosophy have affected how information is conveyed. We are not claiming that only one philosophical viewpoint dominates companies reporting practices, but there does appear to be a changing trend of philosophies building on one another. We use resource dependence theory in relationship to (...) a decision-making model to explain changing stakeholders positions over time. This paper argues that six dominant philosophical theories have influenced the way individuals and organizations report financial and other information. Further, these philosophies then are depicted in a model that helps us to understand what influences companies to present themselves to the outside world. A vignette is used to depict changing philosophical views for several companies management report over 75 years. (shrink)

Non-profit (NP) organizations present complex challenges in managing stakeholder relationships, particularly during times of environmental change. This places a premium on knowing which stakeholders really matter if an effective relationship marketing strategy is to be developed. This article presents the successful application of a model, which combines Mitchell’s theory of stakeholder saliency and Coviello’s framework of contemporary marketing practices in a leading NP organization in the U.K. A cooperative enquiry approach is used to explore stakeholder relationships, dominant (...) marketing practices, and to surface differing perceptions about the organization’s marketing strategy. Resolving these differences sets the scene for developing choices in marketing strategy for the future. (shrink)

Definitions of what it is to be a stakeholder are divided into "claimant" definitions requiring some sort of claim on the services of a business, "influencer" definitions requiring only a capacity to influence the workings of the business, and "combinatory" definitions allowing for either or both of these requirements. It is argued that for the purposes of business ethics, stakeholding has to be about improving the moral conduct of businesses by directing them at serving more than just the interests (...) of owners. On that basis, influencer definitions are eliminated on the grounds that they only concern morally neutral strategic considerations and combinatory definitions on the grounds that the combining of ethical and strategic considerations they promise can be less confusingly achieved through an exclusively claimant definition. It is concluded that for the purposes of business ethics, stakeholders are claimants towards whom businesses owe perfect or imperfect moral duties beyond those generally owed to people at large. (shrink)

While it is generally agreed that companies need to manage their relationships with their stakeholders, the way in which they choose to do so varies considerably. In this paper, it is argued that when companies want to communicate with stakeholders about their CSR initiatives, they need to involve those stakeholders in a two-way communication process, defined as an ongoing iterative sense-giving and sense-making process. The paper also argues that companies need to communicate through carefully crafted and increasingly sophisticated processes. Three (...) CSR communication strategies are developed. Based on empirical illustrations and prior research, the authors argue that managers need to move from ‘informing’ and ‘responding’ to ‘involving’ stakeholders in CSR communication itself. They conclude that managers need to expand the role of stakeholders in corporate CSR communication processes if they want to improve their efforts to build legitimacy, a positive reputation and lasting stakeholder relationships. (shrink)

Drawing on the natural-resource-based view, we propose that employee stakeholder integration is linked to environmental performance through firms’ proactive environmental strategies, and that this link is contingent on shared vision. We tested our model with a cross-country and multi-industry sample. In support of our theory, results revealed that firms’ proactive environmental strategies translated employee stakeholder integration into environmental performance. This relationship was pronounced for high levels of shared vision. Our findings demonstrate that shared vision represents a (...) key condition for advancing the corporate greening agenda through proactive environmental strategies. We discuss implications for the CSR and the environmental management literatures, with a particular focus on the NRBV and stakeholder integration debates. (shrink)

This paper examines the influence of internal barriers on the relationship between the organizational capability of stakeholder integration and proactive environmental strategies. We adopt a moderate hierarchical regression model to test the hypotheses using data from a sample of 73 managers in the business education industry. The paper contributes to stakeholder theory by showing that stakeholder integration positively influences the development of proactive environmental strategies when managers perceive internal barriers to the development of such (...) class='Hi'>strategies. This article also explores an ethical dilemma—managers may use the stakeholder integration capability to support their own interests rather than to benefit stakeholders. (shrink)

Stakeholder engagement has grown into a widely used yet often unclear construct in business and society research. The literature lacks a unified understanding of the essentials of stakeholder engagement, and the fragmented use of the stakeholder engagement construct challenges its development and legitimacy. The purpose of this article is to clarify the construct of stakeholder engagement to unfold the full potential of stakeholder engagement research. We conduct a literature review on 90 articles in leading academic (...) journals focusing on stakeholder engagement in the business and society, management and strategy, and environmental management and environmental policy literatures. We present a descriptive analysis of stakeholder engagement research for a 15-year period, and we identify the moral, strategic, and pragmatic components of stakeholder engagement as well as its aims, activities, and impacts. Moreover, we offer an inclusive stakeholder engagement definition and provide a guide to organizing the research. Finally, we complement the current understanding with a largely overlooked dark side of stakeholder engagement. We conclude with future research avenues for stakeholder engagement research. (shrink)

This paper explores the role of strategic conversations in corporate social responsibility (CSR) strategy formation. The authors suggest that explicitly engaging stakeholders in the CSR strategy-making process, through the mechanism of strategic conversations, will minimize future stakeholder concerns and enhance CSR strategy making. In addition, suggestions for future research are offered to enable a better understanding of effective strategic conversation processes in CSR strategy making and the resulting performance outcomes.

The popularity of the stakeholder model has been achieved thanks to its powerful visual scheme and its very simplicity. Stakeholder management has become an important tool to transfer ethics to management practice and strategy. Nevertheless, legitimate criticism continues to insist on clarification and emphasises on the perfectible nature of the model. Here, rather than building on the discussion from a philosophical or theoretical point of view, a different and innovative approach has been chosen: the analysis will return to (...) the origin of stakeholder theory and will keep the graphical framework firmly in perspective. It will confront the stakeholder model’s graphical representation to the discussion on stakeholder definition, stakeholder identification and categorisation, to re-centre the debate to the strategic origin of the stakeholder model. The ambiguity and the vagueness of the stakeholder concept are discussed from managerial and legal approaches. The impacts of two major shortcomings of the popular stakeholder framework are examined: the boundaries and the level of the firm’s environment, and the ambivalent position of pressure groups and regulators. Working pragmatically, with a focus on the managerial and organisational perspective, an attempt is made to clarify the categorisations and classifications by introducing new terminology with a distinction between stakeholders, stakewatchers and stakekeepers. The analysis will finally lead to a proposed upgraded and refined version of the stakeholder model, with incremental ameliorations close to Freeman’s original model and a return of focus to its essence, the managerial implications in a strategic approach. (shrink)

Recent years have seen dramatic changes in the attitudes and expectations brought to bear on companies. Over ten years of research at MORI has shown the increasing prominence of corporate responsibility for a wide range of stakeholders, from consumers and employees to legislators and investors.

This paper examines how progress on gender equality in the field of corporate social responsibility (CSR) might contribute to broader EU gender and sustainability objectives. It focuses on corporations and citizenship, and on company stakeholder relations (SR) in particular. While the literature on SR has previously engaged with scholarship on feminist ethics, and in particular the ‘ethics of care’, this paper draws upon the feminist citizenship and feminist ethics literature, and upon gender mainstreaming strategy to suggest a more comprehensive (...) approach to gender equality within SR. The aim is to extend our understanding of CSR as a potential policy instrument to advance gender equality. (shrink)

Research in instrumental stakeholder theory often discusses the benefits of a stakeholder strategy that balances all stakeholders’ interests as if the firm’s managers were not constrained much in choosing a strategy. Yet, through their value appropriation behavior, stakeholders with high bargaining power can significantly constrain managers’ choices. Our objective is, therefore, to understand when powerful stakeholders give managers the latitude to balance all stakeholders’ interests, rather than forcing them to satisfy primarily their own interests. Building on enlightened self-interest (...) and the justice literature, we identify five motivational drivers that help explain powerful stakeholders’ value appropriation behavior. We next explore the endogenous relationship between the stakeholder strategy adopted by the firm and its effect on powerful stakeholders’ value appropriation behavior. This article complements instrumental stakeholder theory by looking at powerful stakeholders’ motivation to exercise their bargaining power, and in so doing brings powerful stakeholders’ moral responsibility in the treatment of weak stakeholders to the forefront. (shrink)

This study examines the antecedents of corporate scandals. Corporate scandals are defined as rare events occurring at the apex of corporate fame when managerial fraud suddenly emerges in conjunction with a significant gap between perceived corporate success and actual economic conditions. Previous studies on managerial fraud have examined the antecedents of illegal acts in isolation from strategic decisions and in terms of CEOs’ individual responses to the external context. This study frames the antecedents of corporate scandals in terms of the (...) interplay of CEOs’ personal traits with corporate strategy and stakeholders’ cohesion. With this aim, this study builds on extant theory to examine the case of Banca Popolare di Lodi, an Italian bank involved in a corporate scandal in year 2005. The model contributes to advance understanding of the complex dynamics underlying the emergence of corporate scandals. (shrink)

This article introduces a theoretical framework that combines institutional and stakeholder theories to explain how firms choose their corporate social responsibility (CSR) strategy. Organizational researchers have identified several distinct CSR strategies (e.g., obstructionist, defensive, accommodative, and proactive), but did not explain the sources of divergence. This article argues that the divergence comes from the variability in the configuration of external influences that consists of institutional and stakeholder pressures. While institutions affect firms’ social behavior by shaping the macro-level (...) incentive structure and sources of legitimacy (distal mechanisms), firms’ stakeholders can amplify or buffer the institutional forces by acting as mediators (proximate mechanisms). The two dimensions are interdependent in that stakeholders draw legitimacy and power from institutions, and institutions are often actualized through stakeholder mechanisms. Together, they form a particular configuration of external influences that shapes how focal firms construct their CSR strategy. (shrink)

In this article, we underscore the importance of stakeholder relationships for research on stakeholder engagement. We do so by integrating a practice-based understanding with the relational view. Based on a revealing case study of a civic engagement process in a large German city, we develop a conceptual framework that explains how relational practices shape stakeholder engagement. We identify three relational practices (i.e., connecting, facilitating, and containing) and their associated outcomes (i.e., implication, solidarization, and distinction), as well as (...) effects on stakeholder heterogeneity. Our findings contribute to the relational view on stakeholder engagement by providing insights into practices that shape relationships between heterogeneous stakeholders, explaining how these relational practices influence stakeholder heterogeneity, and identifying unintended impacts of stakeholder engagement. (shrink)

While corporate social responsibility (CSR) is becoming a mainstream issue for many organizations, most of the research to date addresses CSR in large businesses rather than in small- and medium-sized enterprises (SMEs), because it is too often considered a prerogative of large businesses only. The role of SMEs in an increasingly dynamic context is now being questioned, including what factors might affect their socially responsible behaviour. The goal of this paper is to make a comparison of SME and large firm (...) CSR strategies. Furthermore, size of the firm is analyzed as a factor that influences specific choices in the CSR field, and studied by means of a sample of 3,680 Italian firms. Based on a multi-stakeholder framework, the analysis provides evidence that large firms are more likely to identify relevant stakeholders and meet their requirements through specific and formal CSR strategies. (shrink)

In the December 2006 edition of Harvard Business Review , Michael Porter and Mark Kramer argue that by approaching corporate social responsibility (CSR) based on corporate priorities, strengths and abilities, firms can develop socially and fiscally responsible solutions to current CSR issues, which will provide operational and competitive advantages. We agree that an effective approach to CSR includes a mapping of strategy, risk and opportunity. However, we also caution that the identification of these to the exclusion of societal input may (...) not be to the corporation's advantage. Instead, an investment in both strategic analysis and social capital can pay off from a social and an organizational standpoint. Compared with their larger counterparts, small- and medium-sized enterprises (SMEs) frequently have stronger relationships with their internal and external stakeholders that foster the development of social capital. As such, we believe that the sector offers a unique opportunity to identify additional models and frameworks in order to approach a strategic CSR model as espoused by Porter and Kramer. This paper explores a case study of one Canadian SME that uses a community development framework called Asset Based Community Development (ABCD) for its CSR programming. Because ABCD relies heavily on the development and maintenance of social capital and can be utilized to attain set objectives, we propose that it provides a supplementary framework through which the arguments of Porter and Kramer can be expanded. In applying the ABCD framework for CSR, we can begin to establish a programme that supports strategy, integrates employees and stakeholders towards a common vision, and creates unique and sustainable alternatives towards the resolution of social and corporate goals. (shrink)

Extant studies on stakeholder engagement have noted the inherent tensions arising from participation efforts, giving rise to the dark side of engagement. However, few studies have focused on organizational power relations that provide specific conditions for engagement and the related paradox that control represents. Drawing on strategy discourse and paradox as theoretical lenses, we examine engagement as a nexus of observed societal expectations, subjectivities provided by the strategy discourse, and the subject positions adopted by the individuals, giving rise to (...) a contradiction between openness and control. As a result, we present three modes of participation: inclusion, admittance, and quasi-participation. We contribute to stakeholder engagement and paradox literature by outlining the “engagement-control paradox” and showing how the prevailing strategy discourse may drive the use of participation as a form of control. Maintaining different modes of participation introduces inadvertent closure for participation and hinders strategy-making and the development of the organization. (shrink)

Public or stakeholder participation in environmental governance has been strongly advocated within the United Nations (UN) since the early 1990s. A relatively new mechanism for global climate finance that emphasises stakeholder engagement is the Green Climate Fund (GCF), a UN strategy for channelling funds from the Global North to the Global South. Drawing on previous critical approaches to multi-stakeholder involvement in global governance, this article explores stakeholder involvement within the GCF. The study combines ideas from institutional (...) logics and resource dependency to provide a better understanding of how stakeholder arrangements are shaped in climate organisations. Results show that the GCF stakeholder arrangement favours private sector stakeholders – stakeholders that take a technical and apolitical approach to climate finance – and disfavours smaller, less resourceful stakeholders as well as those who perform a politicised watchdog function. (shrink)

The concept of corporate social responsibility (CSR) has been widely investigated, but a generally accepted theoretical framework does not yet exist. This paper argues that the idiosyncrasies of large firms and SMEs explains the different approaches to CSR, and that the notion of social capital is a more useful way of understanding the CSR approach of SMEs, whereas stakeholder theory more closely addresses the CSR approach of large firms. Based on the extant literature, we present a comparison of large (...) firm and SME idiosyncrasies suggesting that both consolidated and emerging strategic orientations toward responsible behaviours exist. Idiosyncrasies of large firms and SMEs are also discussed to provide an assessment of the firm’s strategic CSR orientation, suggesting the key drivers upon which CSR strategies must be based. A twofold consideration emerges. First, the CSR–SME relationship could be better explained if the notion of social capital is taken into account, but this should also be accompanied by a stakeholder view of the SME; second, social capital and stakeholder theory should be taken as alternative ways of explaining CSR in both large firms and SMEs. (shrink)

This article focusses on corporate attitudes to stakeholder environmental pressures in Argentina. It uses a cross section survey of 505 CEOs of Argentinean firms to gather information on environmental attitudes and a stakeholder theory framework to design and interpret the statistical analyses. It is underpinned by theoretical and empirical findings in the literature on stakeholder management, targeting in particular studies that deal with corporate social responsibility (CSR) in Latin America. Its general aim is to gain a deeper (...) empirical understanding of the coherence between managers' perceptions of stakeholder pressures and the importance they are given in corporate CSR strategies through an empirical investigation of environmental management (EM) decisions. In doing so, it uncovers general differences in the way firms perceive and treat groups of stakeholders. It also detects variations across firms, observing that some are typically proactive in their response to stakeholder pressures whilst others are less responsive. Profiling the various stakeholder networks and the corporate response strategies in this way encourages the development of stakeholder-focussed policies and corporate strategies that emphasise communications, awareness and a clear sense of direction. It concludes that CSR appears to be more effective in the protection of the environment than previously reported. Although this study focusses on EM in Argentina, the findings are more generally applicable. (shrink)

ABSTRACT:Promoting dignity is at the heart of the human capability approach to development. We introduce the concept of stakeholder capability enhancement, beginning with a discussion of the capability approach to development proposed by Sen (1985) and further advanced by Nussbaum (1990) to incorporate notions of dignity. Thereafter follows a review of the literature on value creation stakeholder management and convergent stakeholder theory (Freeman, 1984; Freeman, Harrison, Wicks, Palmer, & DeColle, 2010; Harrison & Wicks, 2013; Jones & Wicks, (...) 1999), as the foundation for our concept of stakeholder capability enhancement. The remainder of this article develops a model that integrates stakeholder management with the human capability approach to detail the cooperative advantage that accrues to business and its stakeholders, as well as the gains in social wellbeing and dignity, when stakeholder capability enhancement becomes a common enterprise strategy. The model also explores the risks and boundary conditions firms face when seeking to profit from stakeholder capability tradeoffs. In explaining the model, we explore normative responsibilities and consequences with regard to human capabilities and dignity. We conclude with implications for future research. (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)

This study explores social enterprises’ strategies for addressing mission drift. Relying on an inductive comparative case study of two Italian social enterprises, we show how stakeholder engagement combined with social accounting can successfully support a social venture to re-balance its positioning between wealth generation and social value creation. Indeed, stakeholder engagement helps the internal actors of a social enterprise to rationalize and embody pro-social values previously abandoned, while social accounting reinforces this embodiment process by showing the reintroduced (...) social commitment of the social enterprise to external audiences. Conversely, strategies focused only on social accounting and without significant engagement of external stakeholders prove to be unsuccessful in counterbalancing mission drift because they fail to activate the necessary process of internal re-introduction and operationalization of pro-social values and objectives. (shrink)

This article examines four leading multi-stakeholder labour monitoring organizations. All operating in the maquiladora industry, these organizations are viewed in light of the growing global trend toward industry self-regulation, or what has been referred to as the 'global out-sourcing of regulation'. Their Board compositions, codes of conduct and monitoring and enforcement strategies are all examined as a means of tentatively positioning these organizations along an 'egoist-instrumentalist-moralist' ethical culture continuum. Such a framing provides insights into the perceived salience of (...) these organizations' broader stakeholders, the effectiveness of codes of conduct on workplace practices more generally, and the role that ethics plays in the governance and accountability of these increasingly important types of organizations. (shrink)

Stakeholder Theory combines the pursuance of business goals and responsibility toward a firm's stakeholders. Despite the wealth of research on Stakeholder Orientation, we still have much to learn about specific measurements for several related constructs. In this study, we draw on two samples of 129 and 151 Spanish firms, respectively, to investigate CEOs' perceptions on Stakeholder Integration (SI), leading to the identification of three dimensions of the construct. In this respect, our study suggests that Knowledge of Stakeholders, (...) Interactions between a firm and its stakeholders, and the adaptation of a firm's behavior to stakeholders' demands constitute the main dimensions of SI. This construct has the potential to connect the stakeholder and strategy literatures. (shrink)

This paper focuses on stakeholder identification as per the value sensitive design (VSD) approach applied to the context of quantum technologies (QT). We provide two comprehensive lists of stakeholders as starting points for VSD researchers and practitioners. These lists encompass a diverse range of organizations, including private companies, government agencies, NGOs, partnerships, and professional/trade organizations. Our aim is to facilitate the recognition, legitimation, and understanding of stakeholder interactions in the development of QT. These stakeholder lists can serve (...) as a foundation for designing and implementing policies and strategies that promote the ethical and responsible development of QT, considering the values and interests of various stakeholders. Furthermore, these lists can enable empirical and technical studies on specific QT innovations using an ethics-by-design approach like VSD. Overall, this paper contributes to a better understanding of the complex and dynamic nature of the QT landscape and highlights the importance of stakeholder engagement and collaboration in shaping its future. (shrink)

Stakeholder Theory combines the pursuance of business goals and responsibility toward a firm’s stakeholders. Despite the wealth of research on Stakeholder Orientation, we still have much to learn about specific measurements for several related constructs. In this study, we draw on two samples of 129 and 151 Spanish firms, respectively, to investigate CEOs’ perceptions on Stakeholder Integration (SI), leading to the identification of three dimensions of the construct. In this respect, our study suggests that Knowledge of Stakeholders, (...) Interactions between a firm and its stakeholders, and the adaptation of a firm’s behavior to stakeholders’ demands constitute the main dimensions of SI. This construct has the potential to connect the stakeholder and strategy literatures. (shrink)

While most studies on stakeholder engagement focus on high-power stakeholders (typically, employees), limited attention has been devoted to the engagement of low-power stakeholders. These have been defined as vulnerable stakeholders for their low capacity to influence corporations. Our research is framed around the engagement of low-power stakeholders in the coffee industry who are, paradoxically, critical resource providers for the major roasters. Through the case study of Lavazza—the leading Italian roaster—we investigate empowerment actions addressed to smallholder farmers located in Brazil, (...) India, East Africa, Haiti, and the Dominican Republic. We contribute to the theoretical discussion around engagement and empowerment by developing a framework linking together areas of empowerment (defined in the literature) and specific empowerment actions (emerging from our interviews). Our insights shed light on how organizations can design empowerment strategies leading to more effective stakeholder engagement and how empowerment actions can contribute to turn low-power stakeholders into active business partners. We demonstrate that moving from a traditional competitive view of corporate–stakeholder relationships to a stakeholder theory view based on a logic of cooperative partnerships reinforces the idea that stakeholder engagement and empowerment are both entangled with the value creation process. (shrink)

The aim of this study is to analyse how secondary stakeholders influence managerial decision-making on Corporate Social Responsibility disclosure. Based on stakeholder salience theory, we empirically investigate whether differences in environmental disclosure among companies are systematically related to differences in the level of power, urgency and legitimacy of the environmental non-governmental organisations with which these companies are confronted. Using proprietary archival data for an international sample of 199 large companies, our results suggest that differences in environmental disclosures between companies (...) are mainly associated with differences between their environmental stakeholders’ legitimacy. The effects of power and urgency are of an indirect nature, as they are mediated by legitimacy. This study improves our understanding of CSR disclosure by demonstrating that, next to the well-documented effect of company characteristics, stakeholder characteristics are also important. Besides, it provides scarce empirical evidence that not only primary stakeholders, but also secondary stakeholders are influential with regards to management decision-making. And more specifically, it offers insight into why some stakeholder groups are better able to influence disclosure decisions than other. The results also have important practical implications for managers of both environmental NGOs and large companies. For managers of environmental NGOs the results provide evidence of the most successful tactics for having their environmental information demands satisfied by companies. For company management the results provide insights into the most important stakeholder characteristics, on the basis of which they may develop strategies for proactively disclosing environmental information. (shrink)

Abstract:Business ethicists are eager to connect the ethical treatment of stakeholders with financial rewards. However, little attention has been paid to the cultural and industry context that influences how stakeholders are regarded by the firm, and how innovative strategies for engaging stakeholders can help a firm outperform its competitors. By reconnecting stakeholder theory to its roots in the field of strategy, we provide a framework for understanding the dynamic interplay between stakeholder relationships, innovation, and competitive advantage. The (...) result is a set of testable propositions aimed at better characterizing when and how “ethics pays” (Paine 2003). (shrink)

Two key elements define the modern-day version of a socially responsible corporation: (1) targeting business activities on value creation in three dimensions, and (2) maintaining relationships with stakeholders. In this article, we argue that a proper understanding of Corporate Social Responsibility (CSR) lies in the intrinsic link between these two elements. A relational approach to CSR is called for. Circles of stakeholders reflect the level of involvement of different stakeholders with a corporation and the dynamics of their relations. In a (...) globalising world, connecting corporations to outer-circle groups of stakeholders can be substantially rewarding. Partnerships with Non-Governmental Organisations (NGOs) present a useful strategy for governance for the benefit of all. (shrink)

Recent research on corporate social responsibility (CSR) suggests the need for further exploration into the relationship between small and medium-sized enterprises (SMEs) and CSR. SMEs rarely use the language of CSR to describe their activities, but informal CSR strategies play a large part in them. The goal of this article is to investigate whether differences exist between the formal and informal CSR strategies through which firms manage relations with and the claims of their stakeholders. In this context, formal (...) CSR strategies seem to characterize large firms while informal CSR strategies prevail among micro, small, and medium-sized enterprises. We use a sample of 3,626 Italian firms to investigate our research questions. Based on a multistakeholder framework, the analysis provides evidence that small businesses* use of CSR, involving strategies with an important impact on the bottom line, reflects an attempt to secure their license to operate in the communities; while large firms rarely make attempts to integrate their CSR strategies into explicit management systems. (shrink)

The concept of sustainability was developed in response to stakeholder demands. One of the key mechanisms for engaging stakeholders is sustainability disclosure, often in the form of a report. Yet, how reporting is used to engage stakeholders is understudied. Using resource dependence and stakeholder theories, we investigate how companies within the same industry address different dependencies on stakeholders for economic, natural environment, and social resources and thus engage stakeholders accordingly. To achieve this objective, we conducted our research using (...) qualitative research methods. Our findings suggest that the resource dependencies on different stakeholders lead to development of different stakeholder relationships and thus appropriate resources within the company to execute engagement strategies that are informing, responding, or involving. Our research explains why diversity exists in sustainability disclosure by studying how it is used to engage stakeholders. We find that five sustainability reporting characteristics are associated with the company’s stakeholder engagement strategy: directness of communication, clarity of stakeholder identity, deliberateness of collecting feedback, broadness of stakeholder inclusiveness, and utilization of stakeholder engagement for learning. Our study develops the literature by providing insight into companies’ choices of stakeholder engagement strategy thus explaining diversity in sustainability reporting based on the characteristics and relationships with specific stakeholders. (shrink)

The shift in corporate strategy, from vertical integration to strategic alliances, has developed hand in hand with the evolution of organizational structure, from the vertically integrated firm to the network organization. The result has been the elimination of boundaries, more flexible organizations, and a greater interaction among individuals and organizations. On the negative side, the specialization of firms on single areas of competence has resulted in the disaggregation of the value chain and in the disaggregation of ethical and legal responsibility. (...) To illustrate this point, the paper considers some cases, such as the case of the "beer girls" of Southeast Asia, who are used unethically by distributors to sell beer and liquor. To deal with the problem of the disaggregation of ethical responsibility, managers can use organizational culture and ethical values to control the performance of employees and of other organizations. Contemporary developments in business ethics also offer tools for dealing with the problem. For example, "global corporate citizenship," integrated social contracting theory, and stakeholder learning dialogues provide ways of integrating the interests of all stakeholders. The task is now to use these new approaches to create a governance process that incorporates the voices of all stakeholders, especially the voices of those stakeholders that have legitimate and urgent moral claims, but lack the power to establish those claims. (shrink)

Abstract: In this article, I offer a proposal to clarify what I believe is the proper relation between value maximization and stakeholder theory, which I call enlightened value maximization. Enlightened value maximization utilizes much of the structure of stakeholder theory but accepts maximization of the long-run value of the firm as the criterion for making the requisite tradeoffs among its stakeholders, and specifies long-term value maximization or value seeking as the firm’s objective. This proposal therefore solves the problems (...) that arise from the multiple objectives that accompany traditional stakeholder theory. I also discuss the Balanced Scorecard, which is the managerial equivalent of stakeholder theory, explaining how this theory is flawed because it presents managers with a scorecard that gives no score—that is, no single-valued measure of how they have performed. Thus managers evaluated with such a system (which can easily have two dozen measures and provides no information on the tradeoffs between them) have no way to make principled or purposeful decisions. The solution is to define a true (single dimensional) score for measuring performance for the organization or division (and it must be consistent with the organization’s strategy), and as long as their score is defined properly, (and for lower levels in the organization it will generally not be value) this will enhance their contribution to the firm. (shrink)