Intra‐stakeholder alliances in plant‐closing decisions: A stakeholder theory approach

This article discusses plant‐closing decisions by multinational enterprises (MNEs) applying a stakeholder theory approach. In particular, we focus on the emergence of “intra‐stakeholder alliances,” that is, alliances among the various stakeholder groups of a specific corporation. We analyze the emergence of stakeholder alliances in reaction to MNEs' decisions to terminate production locally and discuss their influence on the outcomes of such decisions. Our research is inspired by two exceptional case studies of two multinational breweries that announced their decisions to close niche breweries in small towns in Italy and Belgium. In both cases, the initial decision was ultimately reversed through the actions of intra‐stakeholder alliances. We combine insights from stakeholder theory and the social movement literature to analyze the action and influence of intra‐stakeholder alliances in seven cases of plant‐closing decisions. We conclude by formulating four general propositions that can provide guidance to MNE management in plant‐closing decisions. Our findings extend managerial stakeholder theory, show how this approach can improve strategic management analysis, emphasize the importance of the relationships among (local) stakeholders in the (global) value‐creation process, and shed light on the collective action and influence of intra‐stakeholder alliances.     

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.     

Advancing Integrative Social Contracts Theory: A Habermasian Perspective

We critically assess integrative social contracts theory (ISCT) and show that the concept particularly lacks of moral justification of substantive hypernorms. By drawing on Habermasian philosophy, in particular discourse ethics and its recent application in the theory of deliberative democracy, we further advance ISCT and show that social contracting in business ethics requires a well-justified procedural rather than a substantive focus for managing stakeholder relations. We also replace the monological concept of hypothetical thought experiments in ISCT by a concept of practical discourse to better govern business activities on the macro-level of organizational actors such as firms, governments, and NGOs.     

Uncommitted Deliberation? Discussing Regulatory Gaps by Comparing GRI 3.1 to GRI 4.0 in a Political CSR Perspective

In this paper, we compare the two Global Reporting Initiative (GRI) reporting standards, G3.1, and the most current version G4.0. We do this through the lens of political corporate social responsibility (CSR) theory, which describes the broadened understanding of corporate responsibility in a globalized world building on Habermas’ notion of deliberative democracy and ethical discourse. As the regulatory power of nation states is fading, regulatory gaps occur as side effects of transnational business. As a result, corporations are also understood to play a “political role” to fill regulatory gaps and contribute to a global governance system by voluntarily engaging in self-regulation. Such corporate political action, however, is not always legitimate as it suffers from a democratic deficit (corporations/managers are not democratically elected or controlled). Consistent with scholars in the field of political CSR, this paper argues that only by means of communication and discourse can this drawback be avoided. That is why CSR reporting and guidelines for standardizing the disclosed CSR information is key for political CSR. By comparing the GRI standards from a political CSR perspective, one can see whether these often-used reporting guidelines fulfill the communicative requirements and whether they are adequate tools to face the challenges of the twenty-first century. We present results from a theory-derived and criteria-driven comparison of the two guidelines. Indication of the effectiveness of voluntary self-regulation is, for example, important considering the 2014 directive of the European Union to make CSR reporting mandatory. We offer a guideline-based view on current CSR theory as well as CSR reporting practice. We discuss implications for CSR theory, particularly the appropriateness of (idealized) deliberation in the Habermasian sense, which is the basis of political CSR theory. We do so by introducing the notion of “uncommitted deliberation” with regard to the refined concept of materiality in GRI 4.0, which induces subjectivity and reduces data-driven comparability. Finally, we address the limitations of this research as well as research questions for future studies.     

The Future of Stakeholder Management Theory: A Temporal Perspective

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.     

Stakeholder Theory and Managerial Decision-Making: Constraints and Implications of Balancing Stakeholder Interests

Stakeholder theory is widely recognized as a management theory, yet very little research has considered its implications for individual managerial decision-making. In the two studies reported here, we used stakeholder theory to examine managerial decisions about balancing stakeholder interests. Results of Study 1 suggest that indivisible resources and unequal levels of stakeholder saliency constrain managers’ efforts to balance stakeholder interests. Resource divisibility also influenced whether managers used a within-decision or an across-decision approach to balance stakeholder interests. In Study 2 we examined instrumental and normative implications of these two approaches. We conclude by considering the contributions of this research.     

The Stakeholder Model Refined

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.     

Corporate Social Responsibility (CSR): Models and Theories in Stakeholder Dialogue

The pharmaceutical sector, an industry already facing stiff challenges in the form of intensified competition and strategic consolidation, has increasingly become subject to a range of pressures. Crucially, in common with other large-scale businesses, pharmaceutical firms find themselves ‹invited’ to respond positively to the corporate ‹social’ responsibility (CSR) expectations of their stakeholders. Consequently, individual managers will almost certainly be obliged to engage in some form of stakeholder dialogue and this, in turn, means that they will have to make difficult choices about which practices to adopt. This real-world management predicament runs parallel to an academic interest in CSR stakeholder dialogue theory and models. Accordingly, the approach of this paper is to focus primarily on the academic debate surrounding stakeholder dialogue, by reviewing past attempts to research and theorise the subject, by identifying gaps and weaknesses in the literature, and by proposing a new analytical model. The central aim of the proposed new model is to offer a unified, structured, systematic, and comprehensive approach to CSR decision making whilst simultaneously providing a practical framework for CSR executives who face the challenge of responding in an effective manner to stakeholders. The model outlined here is currently being employed to conduct international comparative empirical research into stakeholder dialogue practices amongst UK and German pharmaceutical firms. In the longer term the intention is to use the model to undertake international comparative research encompassing a broader range of countries and industries.     

The Narrow Application of Rawls in Business Ethics: A Political Conception of Both Stakeholder Theory and the Morality of Markets

This paper argues that Rawls’ principles of justice provide a normative foundation for stakeholder theory. The principles articulate (at an abstract level) citizens’ rights; these rights create interests across all aspects of society, including in the space of economic activity; and therefore, stakeholders – as citizens – have legitimate interests in the space of economic activity. This approach to stakeholder theory suggests a political interpretation of Boatright’s Moral Market approach, one that emphasizes the rights/place of citizens. And this approach to stakeholder theory – in terms of citizens – raises a further question, what rights and obligations do economic agents have, beyond those attached to their roles as citizens? Rawls would reject additional rights and obligations of this sort for two reasons, one tied to freedom and one tied to pluralism. Rawls’ work therefore presses us to re-conceptualize the place of ethical claims in the economic context.     

Stakeholder Approach: What Effects Should We Take into Account in Contemporary Societies?

In recent years, the stakeholder approach has been widely applied in the debate on corporate social responsibility (CSR). Although many authors of this approach have reviewed many elements of the model, they have unconditionally accepted several criteria assumed by Freeman (1984) to identify stakeholders. In general, stakeholder authors have assumed that (a) the company establishes dyadic relationships with other agents, and (b) decisions made by a company only have foreseen and direct effects on other agents. These criteria have enabled researchers to understand simple processes. However, they have also prevented researchers from explaining how action comes about, and how responsibility is shared, in many complex processes taking place in contemporary societies. Such complex processes involve many agents, and each decision can generate unexpected effects which accumulate or disseminate. Furthermore, the normative structure governing these processes can affect and/or be affected by the actions of agents. In this study, we propose new criteria to expand the stakeholder model and facilitate the study of CSR in such processes.     

Habits,Self-Control and Social Conventions: The Role of Global Media and Corporations

There has been an intellectual debate at least since the 1960s in business ethics on the role of the media in relation to consumer choice driven by either habits or rationality. If consumers are totally rational, then the global media and global corporations provide just information and knowledge. If consumers are influenced by habit then large corporations and global media can greatly influence consumer choice and create problems of self-control (Ainslie, 1992, Pico Economics: The Strategic Interaction of Successive Motivational States Within the Person, Cambridge University press, Cambridge). In this article, we provide a synthesis and integrated approach to this continuing debate. We provide a more institutional approach to consumer choice based on social conventions, rather than just on individual habits and lapses in self-control.     

A Stakeholder Perspective on Buyer–Supplier Conflict

This study seeks to investigate how stakeholder power and an organization's pursuit of legitimacy influence its reaction to conflict with a supplier. We conducted an empirical study among travel agents and tour operators to test the relationship between conflict and stakeholder power and legitimacy derived from three different stakeholders. Our findings imply that power has a dual role. Whereas supplier power reduces buyer–supplier conflict, stakeholder power increases it. Moreover, this study shows that the quest to achieve greater legitimacy from the firm's competitive arena increases conflict. This study is one of the few that test stakeholder theory empirically. We demonstrate that stakeholder theory provides additional explanations above the hitherto taken dyadic approach toward understanding conflict. This study also shows that power can simultaneously reduce and increase conflict depending on which party possesses power. Greater supplier power decreases conflict, while greater stakeholder power and stakeholder-derived legitimacy increases it. Therefore, organizations have to balance their stakeholder and supplier interests.     

The Impact of Corporate Social Responsibility Disclosure on Financial Performance: Evidence from the GCC Islamic Banking Sector

We examine corporate governance diversity within a Coasian framework of stakeholder rights, where the central role of governance is to ensure that necessary firm-specific investments are made. This Coasian perspective on stakeholder theory offers a unifying framework towards a global theory of comparative corporate governance, bridging the gap between economic theories of the firm and stakeholder theory, also offering an economics-based alternative to agency theory that explicitly accounts for stakeholder rights. The Coasian perspective encompasses a diversity of corporate governance systems, but does not imply a unique global corporate governance benchmark. We posit that governance is firm dependent and endogenous conditional on the constraints imposed by a national governance system; consequently, there should be no systematic relationship between governance and firm performance once the national constraints are controlled for. However, the same national corporate governance system constraints confer comparative advantages to firms whose efficient levels of firm-specific investments are favored.     

Should Business Ethics Be Different in Transitional Economies?

This paper builds on a debate between Velasquez and Fleming: Do multinational enterprises (MNEs) have ethical obligations to their host countries? Velasquez applies Thomas Hobbes' realism approach in arguing that MNEs have no special moral obligations to host countries: (a) obligations do not exist independently in a "state of nature," (b) MNEs exist in a "state of nature" independent of any sovereign authority or power, (c) therefore, MNEs cannot be compelled toward moral or ethical behavior. Fleming counters that the lack of an international authority to compel morality from MNEs is irrelevant. MNEs are for-profit entities making rational economic decisions based on their perceived self-interest. Since they operate in "the goldfish bowl of international media," MNEs are very aware of the stakeholder model. First, the paper supports Fleming's position: Even if a philosophical case cannot be established for MNEs to act ethically &;#x2013; they still should. Being unethical in any arena, but especially in the international arena, is both bad-for-business and bad business. Applying stakeholder theory, if stakeholders perceive the MNE as unethical (which may or may not be true), the firm will ultimately lose business. Next, the paper applies Fleming's position to transitional economies. As economies shift from one system to another, positive perceptions and stakeholder support are required for success. With so many environmental variables in flux, multinationals must promote a sense of normalcy, of regular ethical habits, of familiarity. Finally, the paper concludes by cautioning a sole reliance on stakeholder analysis &;#x2013; especially in turbulent times &;#x2013; and recommends areas for further research.     

Defining a Post-Conventional Corporate Moral Responsibility

The stakeholder approach offers the opportunity to consider corporate responsibility in a wider sense than that afforded by the stockholder or shareholder approaches. Having said that, this article aims to show that this theory does not offer a normative corporate responsibility concept that can be our response to two basic questions. On the one hand, for what is the company morally responsible and, on the other hand, why is the corporation morally responsible in terms of conventional and post-conventional perspectives? The reason why the stakeholder approach does not offer such a definition, as we shall see, is because the normative stakeholder approaches tend to confuse the social validity with the moral validity or legitimacy. It leads us to a conventional definition of corporate moral responsibility (CMR) that is not relevant to the pluralistic and global framework of our societies and economies. The purpose of this paper is to demonstrate this intuition.     

The Confines of Stakeholder Management: Evidence from the Dutch Manufacturing Sector

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 capableof 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.     

God as a Managerial Stakeholder?

Can or should God be considered a managerial stakeholder? While at first glance such a proposition might seem beyond the norms of stakeholder management theory or traditional management practice, further investigation suggests that there might be both theoretical and practical support for such a notion. This paper will make the argument that God both is and should be considered a managerial stakeholder for those businesspeople and business firms that accept that God exists and can affect the world. In doing so, part one of the paper first discusses the growth of religion and spirituality within the business and academic communities. Part two raises several arguments based on stakeholder theory and business reality to support the notion of God as a managerial stakeholder. Part three addresses the arguments against God as a managerial stakeholder. Part four discusses the managerial implications of considering God as a managerial stakeholder. The paper concludes with its limitations.