Stakeholder Salience Revisited: Refining,Redefining, and Refueling an Underdeveloped Conceptual Tool

This article revisits and further develops Mitchell et al.’s (Acad Manag Rev 22(4):853–886, 1997) theory of stakeholder identification and salience. Stakeholder salience holds considerable unrealized potential for understanding how organizations may best manage multiple stakeholder relationships. While the salience framework has been cited numerous times, attempts to develop it further have been relatively limited. We begin by reviewing the key contributions of other researchers. We then identify and seek to resolve three residual weaknesses in Mitchell et al.’s (1997) framework, thereby strengthening its foundations for further development. We argue, first, that urgency is not relevant for identifying stakeholders; second, that it is primarily the moral legitimacy of the stakeholder’s claim that applies to stakeholder salience; and last, that the salience of stakeholders will vary as the degrees of the attributes vary. These insights inform revised definitions of stakeholder salience and legitimacy, and necessitate a new theoretical underpinning for the role of legitimacy. Finally, we present an extensive agenda for future research with the objective of refueling research in stakeholder salience.     

Stakeholder Multiplicity: Toward an Understanding of the Interactions between Stakeholders

While stakeholder theory has traditionally considered organization’s interactions with stakeholders in terms of independent, dyadic relationships, recent scholarship has pointed to the fact that organizations exist within a complex network of intertwining relationships [e.g., Rowley, T. J.: 1997, The Academy of Management Review 22(4), 887–910]. However, further theoretical and empirical development of the interactions between stakeholders has been lacking. In this paper, we develop a framework for understanding and measuring the effects upon the organization of competing, complementary and cooperative stakeholder interactions, which we refer to as stakeholder multiplicity. We draw upon three forms of fit (i.e. fit as matching, fit as moderation, and fit as gestalts; Venkatraman, N.: 1989) to develop a framework for understanding stakeholder multiplicity based upon the direction, strength, and synergies of the interacting claims. Additionally, we draw upon the theory of stakeholder identification and salience of Mitchell et al. (1997), which we argue provides a more relevant and significantly more illustrative explanation of the nature and effects of stakeholder interactions upon the organization than the network approach of Rowley (1997). Furthermore, we ground our framework through reference to three stakeholder groups (i.e. governments, customers, and employees) and the stakeholder issue of concern for the natural environment. We propose a hierarchy of the multiplicity strength of influence of these three stakeholder groups. Potential measurement and implications are discussed.     

Who are the Stakeholders Now? An Empirical Examination of the Mitchell, Agle, and Wood Theory of Stakeholder Salience

Two environmental accidents in the mining industry provide the context for this study of the Mitchell, Agle, and Wood (1997, The Academy of Management Review 22, 853–886) analysis of stakeholder salience. I examine the reactions of two stakeholder groups: shareholder response is examined in terms of changing share returns and risk; management response through change in disclosure. I find the two decision-makers reacted at different times. Management responded to the first accident, though not the second. Shareholders responded to the second accident alone. My findings support the Mitchell, Agle, and Wood (MAW) assertion that stakeholder status is impermanent, and determined through the eyes of the decision-maker.     

U.S. Small Business’s Philanthropic Contribution to Local Community: Stakeholder Salience and Social Identity Perspectives

This study investigates relational attributes that explain small-business owners’/managers’ philanthropic contribution to their local community. Drawing on the theory of stakeholder salience and the social identity theory, we consider two facets of small-business–local-community relationship: a relationship with the local community as a stakeholder and a relationship with the local community as a social category that they belong. Data from 202 small-business owners/managers in the United States yielded support for the stakeholder salience and social identity perspectives. The results showed that the owners’/managers’ perception of legitimacy and urgency of local community’s claim and their social identity as a community member were important determinants of the small businesses’ philanthropic contribution. The findings provide strategic implications for local governments, civic organizations, and community authorities about managing the relationship with Small Business, Stakeholder salience, social identity, CSR, local community.     

A Stakeholder’s Perspective on Human Resource Management

In order to understand the system wherein human resource management practices are determined by the interactions of a complex system of actors, it is necessary to have a conceptual framework of analysis. In this respect, the works of scholars (Mitroff, 1983, Stakeholders of the Organizational Mind, Jessey-Bass; Freeman, 1984, Strategic Management: A Stakeholder Approach, Pitman) concerning stakeholder theory opened new perspectives in management theory. An organisation is understood as being part of a politico-economic system of stakeholders who interact and influence management practices. Each stakeholder tries to optimise and protect his interests (Frooman, 1999, Academy of Management Review 24, 191–205; Savage et al., 1991, Academy of Management Executive 5(2), 61–75). The framework of stakeholder analysis enables escape from a purely instrumental approach to HRM, and avoids reducing our understanding of conflicts within companies to mere antagonism between employees and their employers. It enables us to point out the existence of other stakeholders in the relationship. Notably, it allows for the incorporation into management theory of actors from the sphere of politics (president of the republic, government, national elected representatives – deputies and senators – and locally elected representatives – mayors and regional councillors, etc.) as well as their dependent administrations. All these actors are considered to be stakeholders who define the legal framework of firm management and guarantee the application of these laws.     

The Primordial Stakeholder: Advancing the Conceptual Consideration of Stakeholder Status for the Natural Environment

This article furthers the argument for a stakeholder theory that integrates into managerial decision-making the relationship between business organizations and the natural environment. The authors review the literature on stakeholder theory and the debate over whom or what should count as a stakeholder. The authors also critique and expand the stakeholder identification and salience model developed by Mitchell and Wood (1997) by reconceptualizing the stakeholder attributes of power, legitimacy, and urgency, as well as by developing a fourth stakeholder attribute: proximity. In this way, the authors provide a stronger basis for arguing for the salience of the natural environment as the primary and primordial stakeholder of the firm.     

Social Contracting in a Pluralist Process of Moral Sense Making: A Dialogic Twist on the ISCT

This paper applies Wempe’s (2005, Business Ethics Quarterly 15(1), 113–135) boundary conditions that define the external and internal logics for contractarian business ethics theory, as a system of argumentation for evaluating current or prospective institutional arrangements for arriving at the “good life,” based on the principles and practices of social justice. It does so by showing that a more dynamic, process-oriented, and pluralist ‘dialogic twist’ to Donaldson and Dunfee’s (2003, ‘Social Contracts: sic et non’, in P. Heugens, H. van Oosterhout and J. Vromen (eds.), The Social Institutions of Capitalism: Evolution and Design of Social Contracts (Cheltenham, UK, Edward Elgar Publishing, Ltd.) pp. 109–126; 1999, Ties that Bind: A Social Contracts Approach to Business Ethics (Boston, MA, Harvard Business School Press); 1995, Economics and Philosophy 11(1), 85–112; 1994, Academy of Management Review 19(2), 252–284.) integrated social contracting theory (ISCT) of economic ethics will further develop this promising and influential approach to moral reasoning, ethical decision-making, and stakeholder governance. This evolutionary, interactive learning-based model of ethical norm generation via dialogic stakeholder engagement is particularly appropriate within economic communities that are experiencing value conflict and pressures for institutional change.Jerry M. Calton is Professor of Management at the University of Hawaii at Hilo. His research interests encompass multi-stakeholder learning dialogue, trust-based network governance, and the social contracting approach to ethical decision-making. His publications have appeared in the Journal of Business Ethics, Business & Society, Business Ethics Quarterly, the Journal of Corporate Citizenship, and elsewhere.     

利益相关者显著性的整合研究框架——主观感知与主体属性

利益相关者显著性研究经历了“基于身份”静态观到基于“主观感知”和“主体属性”动态观的转变过程。静态观的利益相关者显著性研究已不能帮助焦点企业管理者在一个动态复杂环境中有效识别出显著的利益相关者,但动态观在“谁是显著的利益相关者”问题上仍争议颇多。鉴于此,以动态观为切入点,把利益相关者显著性的影响因素分为焦点企业的主观感知和利益相关者的主体属性这两大研究视角,提炼出一个识别利益相关者显著性的整合研究框架。     

Determinants of Corporate Social Responsibility Disclosure Ratings by Spanish Listed Firms

The aim of this paper is to analyze whether a number of firm and industry characteristics, as well as media exposure, are potential determinants of corporate social responsibility (CSR) disclosure practices by Spanish listed firms. Empirical studies have shown that CSR disclosure activism varies across companies, industries, and time (Gray et al., Accounting, Auditing & Accountability Journal 8(2), 47–77, 1995; Journal of Business Finance & Accounting 28(3/4), 327–356, 2001; Hackston and Milne, Accounting, Auditing & Accountability Journal 9(1), 77–108, 1996; Cormier and Magnan, Journal of International Financial Management and Accounting 1(2), 171–195, 2003; Cormier et al., European Accounting Review 14(1), 3–39, 2005), which is usually justified by reference to several theoretical constructs, such as the legitimacy, stakeholder, and agency theories. Our findings evidence that firms with higher CSR ratings present a statistically significant larger size and a higher media exposure, and belong to more environmentally sensitive industries, as compared to firms with lower CSR ratings. However, neither profitability nor leverage seem to explain differences in CSR disclosure practices between Spanish listed firms. The most influential variable for explaining firms’ variation in CSR ratings is media exposure, followed by size and industry. Therefore, it seems that the legitimacy theory, as captured by those variables related to public or social visibility, is the most relevant theory for explaining CSR disclosure practices of Spanish listed firms.     

Stakeholder Salience in Public and Private Firms: Results from Tanzania

It has become evident that Western concepts of business and management must be evaluated within their realms of application. The objective of this research was to analyze the effects of stakeholder attributes of power, legitimacy, and urgency on the stakeholder salience of shareholders, employees, customers, and community in state-owned and privatized firms in Tanzania. In general, the framework developed and used in Western studies proved useful in characterizing Tanzanian management perceptions toward stakeholders. That is, when using a common questionnaire, results were obtained that linked stakeholder saliency with underlying attributes. Nevertheless, the saliency profile for stakeholders was different in the Tanzanian culture from previous studies in the United States and Spain. In a Tanzanian context, employees, customers, and community attained inferior status compared to the results obtained in developed countries for which the theory had been developed. Profiles were also different in comparing state-owned and privatized firms in Tanzania. Results indicated that the effects on salience are similar for shareholders but different for the remaining stakeholder groups in the two categories of firms. Some policy recommendations are made as a consequence of observations, and the need for further work is acknowledged.     

Enabling Guanxi Management in China: A Hierarchical Stakeholder Model of Effective Guanxi

Guanxi (literally interpersonal connections) is in essence a network of resource coalition-based stakeholders sharing resources for survival, and it plays a key role in achieving business success in China. However, the salience of guanxi stakeholders varies: not all guanxi relationships are necessary, and among the necessary guanxi participants, not all are equally important. A hierarchical stakeholder model of guanxi is developed drawing upon Mitchell et al.’s (1997) stakeholder salience theory and Anderson’s (1982) constituency theory. As an application of instrumental stakeholder theory, the model dimensionalizes the notion of stakeholder salience, and distinguishes between and among internal and external guanxi, core, major, and peripheral guanxi, and primary and secondary guanxi stakeholders. Guanxi management principles are developed based on a hierarchy of guanxi priorities and management specializations. The goal of this application of instrumental stakeholder theory is to construct, for Western business firms in China, a means to reliably identify guanxi partners by employing the principles of effective guanxi. These principles are described in the form of testable propositions that advance social scientific research in this area of international business ethics. Chenting Su is Associate Professor of Marketing at City University of Hong Kong. He is also Adjunct Professor at Wuhan University, P.R. China. He previously taught at the University of Victoria, Canada, He writes for Journal of Marketing Research, International Journal of Research in Marketing, Journal of Travel Research, Journal of Business Ethics, Psychology & Marketing, International Journal of Market Research, Service Marketing Quarterly, Research in Marketing, and others. He presently serves as Executive Director of China Marketing Association, P.R. China. Ronald K. Mitchell is Professor of Entrepreneurship and J. A. Bagley Regents Chair in Management in the Rawls College of Business at Texas Tech University. He publishes in the areas of new value creation and stakeholder theory. From 1999–2002 he held a joint appointment in strategy and public policy in the Guanghua School of Management at Peking University, Beijing, PRC. He has won numerous awards for research and program building; presently serves in the leadership of the AOM Entrepreneurship Division; and is Co-Editor for the Entrepreneurship Theory & Practice three-volume Special Issue on Entrepreneurial Cognition. Joe Sirgy is Professor of Marketing and Virginia Real Estate Research Fellow at Virginia Polytechnic Institute and State University (Virginia Tech). He has published extensively in the area of business ethics and quality-of-life (QOL) research in relation to theory, philosophy, measurement, business, and public policy. He co-founded the International Society for Quality-of-Life Studies (ISQOLS) in 1995 and is currently serving as its Executive Director. He received the Distinguished Fellow Award from both the Academy of Marketing Science and ISQOLS. In 2003, ISQOLS recognized him as the Distinguished QOL Researcher for research excellence and a record of lifetime achievement in QOL research. He also is the current JMM section editor on QOL issues and a co-editor of Applied Research in Quality of Life.     

Stakeholder relations as social capital in early modern international trade

Stakeholder relations that are available through networks of various sorts are one benefit from social capital. According to the stakeholder approach to organisations, those relationships that contain most of the important attributes – such as power, legitimacy, frequency of contact and urgency – hypothetically dominate the business environment. This has caused modern corporations to view chiefly the dominant stakeholders as important. This study tests the importance of these attributes in early modern international trade; in other words, which attributes played a major role in the relations between Finnish tradesmen and their foreign contacts? The archives of two major Finnish trading houses from 1781 to 1852 provide sources for studying these stakeholder relations. The results of the study seem to confirm the importance of legitimacy and power in stakeholder relations, but they particularly emphasise the significance of frequency and urgency. Furthermore, dealings repeated over time between the parties created a resource dependency, thus further underlining frequency and power as important stakeholder attributes.     

The Link Between Responsibility and Legitimacy: The Case of De Beers in Namibia

This article investigates the link between corporate social responsibility (CSR) practices and the reasons for which legitimacy is ascribed or denied. It fills a gap in the literature on CSR and legitimacy that lacks empirical studies regarding the question whether CSR contributes to organisational legitimacy. The problem is discussed by referring to the case of De Beers’s diamond mining partnership with the Government of Namibia. A total of 42 interviews were conducted—41 with stakeholders and one with the focal organisation Namdeb. The 41 stakeholder interviews are analysed with regard to cognitive, pragmatic and moral legitimacy as defined by Suchman (Acad Manage Rev 20(3):571–610, 1995). The main finding is that the majority of statements on organisational legitimacy refer to moral legitimacy and most issues raised in this context challenge the company’s legitimacy despite its comprehensive CSR engagement. The study demonstrates that legitimacy gaps can be a result of communication practices that raise unrealistic stakeholder expectations and that the legitimacy gained by CSR engagement in one area cannot substitute legitimacy losses caused by failures in another.     

Trust and Stakeholder Theory: Trustworthiness in the Organisation–Stakeholder Relationship

Trust is a fundamental aspect of the moral treatment of stakeholders within the organization–stakeholder relationship. Stakeholders trust the organization to return benefit or protections from harm commensurate with their contributions or stakes. However, in many situations, the firm holds greater power than the stakeholder and therefore cannot necessarily be trusted to return the aforementioned duty to the stakeholder. Stakeholders must therefore rely on the trustworthiness of the organization to fulfill obligations in accordance to Phillips’ principle of fairness (Business Ethics Quarterly 7(1), 1997, 51–66), particularly where low-power stakeholders may not be fully consenting (Van Buren III, Business Ethics Quarterly 11(3), 2001, 481–499). The construct of organizational trustworthiness developed herewith is presented as a possible solution to the problem of unfairness in organization–stakeholder relations. While organizational trustworthiness does not create an ethical obligation where none existed before, stakeholders who lack power will likely be treated fairly when organizational trustworthiness is present.     

Analyzing the Essence of Stakeholder Relationships: What do we Need in Addition to Power,Legitimacy, and Urgency?

This article contributes to the body of stakeholder literature by providing an in-depth analysis of the dynamics of stakeholder relationships as a part of change in value creation. The article presents an argument that the stakeholder salience model as a tool for analyzing stakeholder relationships is not sufficient for understanding business value creation. In the recent stakeholder literature, understanding business value creation has become an important theme. Through an analysis of an empirical case, the article shows how the three stakeholder relationship attributes, legitimacy, power and urgency help to reveal the definitive stakeholders and to capture dynamics of stakeholder relations. However, in the case of strategic change, where the value creation of a firm is in transition, a more profound understanding of stakeholder relationships is needed. As a result of our empirical analysis, six characteristics of stakeholder relationships were identified. To conclude, the question of who and what really counts should be replaced by the question of how value is created in stakeholder relationships.     

Engaging and marketing to stakeholders in World Heritage Site management: a United Kingdom multiple case study perspective

ABSTRACT

This research addresses the limited studies which apply stakeholder theory to World Heritage Site (WHS) management and managerial theory to heritage management. WHS management highlights a context where sites rely on numerous interests uniting through goodwill. This is intensified by the multiple-ownership patterns which characterise many WHSs, necessitating a need for collective action. This study aims to explore how managers attempt to manage stakeholders and generate involvement and support. This study adopts a multiple case study approach, exploring three United Kingdom WHSs. Data were collected through interviews, documentation and physical artefacts. The analysis found that through representation, raising awareness and support, managers were able to generate stakeholder patronage. However, this required managers to look beyond informative engagement toward participatory means. Furthermore, the findings highlight the importance of the facilitators, time and money in successful stakeholder engagement. Lastly, conclusions, limitations and future research are offered. Underpinned by stakeholder theory, this paper contributes to the understanding of stakeholder engagement within WHS management and adds to limited empirical studies on multiple sites. This investigation found that engagement is constrained by managers’ limited time and resources. Furthermore, participatory engagement is essential in fostering stakeholders’ responsibility for site management and developing relationships with managers.     

Managerial Attitudes Toward Stakeholder Salience Within Selected Western Pacific-Rim Economies

ABSTRACT

This study empirically examines the attitudes of managers and managerial students in Australia, China and Indonesia, toward the perceived prominence of selected organisational stakeholders. A development model is used to argue that Australian respondents will perceive greater equality in prominence between the selected organisational stakeholders than their Chinese and Indonesian counterparts. Results indicated that Chinese respondents attributed greater prominence toward Government as an organisational stakeholder, and contrary to expectations, perceived greater equality (less variance) in prominence between stakeholders. The study provides a basis on which further work on the perceptions of stakeholder prominence can be undertaken in different contexts.     

Imperfections and Shortcomings of the Stakeholder Model’s Graphical Representation

The success of the stakeholder theory in management literature as well as in current business practices is largely due to the inherent simplicity of the stakeholder model––and to the clarity of Freeman’s powerful synthesised visual conceptualisation. However, over the years, critics have attacked the vagueness and ambiguity of stakeholder theory. In this article, rather than building on the discussion from a theoretical point of view, a radically different and innovative approach is chosen: the graphical framework is used as the central perspective. The major shortcomings of the popular stakeholder framework are systematically confronted with the graphical scheme to illustrate their visual impact. The graphical illustrations of the imperfections help explain the sometimes-oversimplified generalisation inherent to every graphical model. They also make some interrelationships easier to understand. The analysis demonstrates that, with the tacit but implicit acceptance of simplification of the discussed explanatory elements, Freeman’s framework remains a rather good approximation of reality. Only a few minor changes to the stakeholder model are consequently proposed.     

Three Elements of Stakeholder Legitimacy

This paper focuses attention on the stakeholder attribute of legitimacy. Drawing upon institutional and stakeholder theories, I develop a framework of stakeholder legitimacy based on its three aspects—legitimacy of the stakeholder as an entity, legitimacy of the stakeholder’s claim, and legitimacy of the stakeholder’s behavior. I assume that stakeholder legitimacy is socially constructed by management and that each of its three aspects exists in degree in the manager’s perception. I discuss how these aspects interact and change over time, and propose an agenda for future research on stakeholder legitimacy.