In this paper, I present a systematic approach to stakeholder theory based on social capital: the stakeholder social capital approach. Social capital is a relatively novel concept in stakeholder theory, which in previous research was not properly defined or systematically developed. This paper aims to fill this gap by taking into account the specificities of the stakeholder theory, which implies an explicit consideration of values. Therefore, the stakeholder social capital concept is defined by four dimensions (relational, cognitive, structural and evaluative) (...) instead of three (relational, cognitive and structural). I present the stakeholder social capital approach according to Donaldson and Preston's distinction: the descriptive, instrumental and normative. The descriptive perspective implies mapping the stakeholder networks based on the four dimensions and implies a shift toward relationships rather than groups of stakeholders. The instrumental perspective based on the relational view focuses on the drivers of relational rents within the network (relational assets, knowledge routines, complementary resource endowments and effective governance) and the normative perspective aims to foster a relational view of society. (shrink)

Stakeholder theory is widely accepted but elementary aspects remain indeterminate as the term ‘stakeholder’ is an essentially contested concept, being variously describable, internally complex and open in character. Such contestability is highly problematic for theory development and empirical testing. The extent of essential contestability, previously unknown, is demonstrated in this paper through a bounded systematic review of 593 different stakeholder theory definitions. As an essentially contested concept, the solution does not lie in a universal stakeholder definition, but in debating the (...) boundaries of stakeholder identification. To this end, this paper presents the first major attempt at sorting, filtering and ordering stakeholder theory and stakeholder definitions to produce a comprehensive, multi-dimensional classification of stakeholder theory. The constructs of the classification model juxtapose existing stakeholder theories and contributions from across the multi-contextual applications of stakeholder theory, thereby providing an invaluable overview of what we know about stakeholder theory in one model. The classification model is then tested with positive results. The paper concludes with a comprehensive discussion of the implications of classification stakeholder theory definitions, which has for future research. (shrink)

Although the possibility that a firm’s stakeholders may take damaging measures against it in response to its activities has been an underlying assumption of stakeholder theory from inception, the conditions that predispose stakeholders to act against firms remain largely unexplored in the literature. Based on work in equity theory, expectancy theory, and resource dependence theory, we present and test hypotheses concerning stakeholders’ propensities to impose sanctions upon—or to support—firms. Using a vignette-based experiment, we found strong confirmation of the criticality of (...) fairness in the firm–stakeholder relationship: stakeholder equity perceptions were unequivocally associated with the proclivity to sanction the firm, or to engage in prosocial behaviours of benefit to it. Stakeholder expectancy perceptions and resource dependence were related to only certain forms of stakeholder action, indicating that researchers should take care to differentiate between types of stakeholder response when investigating questions surrounding stakeholder mobilization. Our results also suggest specific avenues for stakeholder dialogue that could help firms mitigate the likelihood of stakeholders taking damaging action against them. (shrink)

This article examines the relationship between an aspect of a firm’s corporate social responsibility, corporate community programs, and the effectiveness of its corporate political activity. Developing a conceptual model based on resource-based view of the firm, the authors argue that the mechanism linking a firm’s CCP to CPA mechanism is the effect of CCPs on the development of firm level resources. Specifically, the intensity of a firm’s CCPs enhances a firm’s human capital, organizational capital, and geographic resources, which in turn (...) improve the effectiveness of two key aspects of CPA: information and constituency-building political strategies. This linkage of CCPs to CPA effectiveness may be particularly relevant when the firm faces unfavorable political markets. (shrink)

We have conducted a case study of Foxconn’s suicide crisis when 12 Foxconn employees committed suicide during the first 5 months of 2010. In this case study, we have examined Foxconn’s crisis communication strategies during the critical period and explored the failure in crisis communication in terms of the stakeholder approach. Our findings show that Foxconn adopted a mixed response strategy by trying to address the concerns of various stakeholders while refusing to take responsibility for the suicides. Foxconn’s failure in (...) the crisis was due to its imbalanced stakeholder relations that failed to recognize employees as important stakeholders, resulting in the failure to provide the ethics of care and justice that was warranted. Our findings suggest that an ethical stakeholder approach can complement Benoit’s and Coombs’ crisis communication theories and strategies. (shrink)

In this paper, I present a systematic approach to stakeholder theory based on social capital: the stakeholder social capital approach. Social capital is a relatively novel concept in stakeholder theory, which in previous research was not properly defined or systematically developed. This paper aims to fill this gap by taking into account the specificities of the stakeholder theory, which implies an explicit consideration of values. Therefore, the stakeholder social capital concept is defined by four dimensions (relational, cognitive, structural and evaluative) (...) instead of three (relational, cognitive and structural). I present the stakeholder social capital approach according to Donaldson and Preston's distinction: the descriptive, instrumental and normative. The descriptive perspective implies mapping the stakeholder networks based on the four dimensions and implies a shift toward relationships rather than groups of stakeholders. The instrumental perspective based on the relational view focuses on the drivers of relational rents within the network (relational assets, knowledge routines, complementary resource endowments and effective governance) and the normative perspective aims to foster a relational view of society. (shrink)

To contribute to the continuing challenge of explaining how managers identify stakeholders and assess their salience, in this article, we chronicle the history, assess the impact, and evaluate the possibilities opened by Mitchell, Agle, and Wood (MAW-1997). We do so through two types of qualitative analysis, and also through utilizing a quantitative network analysis tool. The first qualitative analysis categorizes the major contributions of the most influential papers succeeding MAW-1997; the second identifies and compares the relevant issues with MAW-1997 at (...) the time of initial publication and today. We apply main path analysis, a quantitative tool, to map how this scholarly domain has evolved. These three analyses robustly depict the impact of MAW-1997 and the ensuing scholarly conversation, and they enable us to illustrate the current state and trajectory of stakeholder identification and salience scholarship. We close by discussing pressing topics related to the broader body of stakeholder theory literature. (shrink)

Dynamics concerns the process of change in variable conditions through time at any level of analysis. Various important issues or topics in stakeholder theory and practice involve consideration of change over time and thus unavoidably involve dynamics. While dynamics has received explicit recognition in stakeholder literature, dynamic analysis remains partly tacit and suffused through the literature. One reason is that dynamics remains difficult to model even in economics. This article provides a basic orientation to stakeholder dynamics as a key conceptual (...) and methodological issue for stakeholder thinking. This article identifies current literature concerning stakeholder dynamics and evaluates future directions in dynamic reasoning that would help build stakeholder theory and improve practice of stakeholder management. Notions of competition, influence strategies, change in stakeholder networks, mindsets, salience or values, learning, creative destruction, long-term sustainability, stakeholder reciprocity, sustainable development, and value creation all embed change and thus time dynamics. Static complexity and heterogeneity across units-of-analysis are not the same as dynamics but do also change over time. Dynamics concerns how change process influences consequences (later in time) in relationship to antecedents (earlier in time). Management copes with change process, as much as with complexity and variation in antecedents and consequences. (shrink)

I address an interesting puzzle of how marginalized groups gain self-representation and influence firms’ strategies. Accordingly, I examine the case of access to low-cost HIV/AIDS drugs in South Africa by integrating W. E. B. Du Bois’s work into stakeholder theory. Du Bois’s scholarly work, most notably his founding contribution to Black scholarship, has profound significance in the humanities and social sciences disciplines and vast potential to inspire a new way of thinking and doing research in the management and organization fields, (...) including business ethics research. By drawing on Du Bois’s works, I argue that through reconstruction of their selves—knowing their souls—marginalized groups know their capabilities better, enabling them to overcome their political and strategic limitations and ensure their true self-representation. They are also empowered to use political imagination and strategies of resistance against more powerful opponents. This influences powerful actors to accept the demands of marginalized groups. (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)

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)

If stakeholder theory is to become a full theory of business—society relationships, it will have to develop a better understanding of processes by which stakeholders may gain and hold influence over firms. A better understanding of the political processes involved is required. This paper—as well as the papers in this special issue—takes a political `view' to addressing the issue, and thereby extends the currently dominant demographic and structural approaches. It suggests that the influence of stakeholders over firms is the temporary (...) outcome of processes of action, reaction, and interaction among various parties. Consequently, the further advancement of stakeholder theory would benefit from the adoption of process-research methods and thinking. (shrink)

This review shows how the relationship between nongovernmental organizations (NGOs) and businesses has been examined in business and society, management, and international business (IB) literatures. Altogether 88 relevant studies have been identified through the analysis of article abstracts from 11 leading journals in these fields. The articles have been classified into three categories according to their focus: NGO—business interface, NGO—business— government interface, and NGOs as one of many corporate stakeholders. Six main themes are identified: (a) Activism and NGO influence, (b) (...) dyadic partnership (NGO—business), (c) cross-sector partnership (NGO—business— government), (d) global governance and standardization, (e) national-level governance, and (f) stakeholder management. The state of the research topic is assessed, and implications and avenues for further research are provided. (shrink)

This article aims to deepen the understanding of the processes and specific actions aimed at influencing and shaping business practices through dynamic stakeholder relationships. An inductive, longitudinal study of all players involved in a stakeholder conflict identified four clusters of influence tactics that were used by both secondary stakeholders and their target firms: issue raising, issue suppressing, positioning, and solution seeking. The stakeholders studied built elaborate influence chains and worked to direct influence flows. The study contributes to stakeholder theory by (...) offering a refined understanding of both bilateral and mutual-influence tactics, expanding the theory's focus beyond bilateral relationships, and highlighting the use of dependence relationships among multiple embedded organizations to build influence over a specific target, and more generally, an organizational field. These findings are discussed in light of work on social movement organizations and institutional theory. (shrink)

Relations between non-governmental organizations (NGOs) and companies have been the subject of a sharply increasing amount of publications in recent years within academic business journals. In this article, we critically assess this fast-developing body of literature, which we treat as forming a ‘business and society discourse’ on NGO–business relations. Drawing on discourse theory, we examine 199 academic articles in 11 business and society, international business, and management journals. Focusing on the dominant articulations on the NGO–business relationship and key signifiers they (...) rely on, we analyze the problem-settings of articles in order to reveal the statements that are acceptable and appropriate within this field. Our threefold aim is to (1) identify dominant articulations of NGO–business relations in business and society discourse, (2) expose those articulations that are silenced or suppressed by these dominant articulations, and (3) critically assess possible power effects of these discursive dynamics in the field of discursivity. While business and society discourse on NGO–business relations overall remains open to many different articulations, we also find that those articulations that focus on NGO–business partnerships and governance initiatives tend to privilege collaborative and deliberative ways of engaging and marginalize more adversarial subject positions. We call for more recognition of the potentially constructive role that can be played by conflict. (shrink)

The authors apply marginalization theory to develop a model of boycotts that incorporates both individual motives and corporate strategic issues. Overall, their analysis of more than 25,000 individual evaluations of 59 companies suggests that members of marginalized groups are more likely to boycott. Individuals are less likely to boycott companies about which they are knowledgeable and more likely to boycott companies that are organized boycott targets. In addition, the authors find systematic differences in the types of boycotts associated with strategic (...) issues that are supported by members of marginalized groups. Overall, boycott supporters tend to be upwardly mobile members of marginalized groups. (shrink)

In this article, we seek to advance understanding of nongovernmental organization (NGO) strategies with regard to influencing corporations. We study two contrasting NGO strategies (symbolic gain and symbolic damage), which simultaneously target the same corporation on the same issue. In so doing, we highlight three previously neglected dimensions of NGO influence strategies: (a) the influence effected by contrasting strategies; (b) the interplay between contrasting strategies; and (c) the dynamic relation between firm— stakeholder resource dependence relationship and NGO influence strategy.

Theoretical and empirical research on stakeholder behavior tends to focus on specific actions or responses in the context of the organization–stakeholder relationship. Despite increased efforts to look beyond the dyadic organization–stakeholder relationship, research still favors the perspective of the focal organization. The taken-for-granted assumption of the organization–stakeholder relationship may limit our understanding of how organization–stakeholder linkages are formed and evolve over time. By adopting the perspective of the stakeholder, this article examines organization–stakeholder relationship formation and tracks changes in the salience (...) of stakeholder groups otherwise considered to be nonstakeholders. This research draws from a case study of small coffee producers in Southern Mexico who formed a cooperative and developed salience within their stakeholder network after a long history of diverse individual, organizational, and institutional arrangements. The findings suggest that the replacement of bureaucratic stakeholder relationships with relationships characterized by strong moral commitment to stakeholders’ claims enabled independent farmers to transform into an integrated, solid, and worldwide competitive group of coffee producers. (shrink)

Fairness and justice are core issues in stakeholder theory. Although such considerations receive more attention in the ‘normative’ branch of the stakeholder literature, they have critical implications for ‘instrumental’ stakeholder theory as well. In research in the instrumental vein, although the position has seldom been articulated in significant detail, a stakeholder’s inclination to take action against the firm or, conversely, to cooperate with it, is often taken to be a function of its perceptions concerning the fairness or unfairness of the (...) treatment it receives in its relationship with the firm. Thus, from various works in this domain can be distilled what might be termed a ‘fairness-based perspective on stakeholder behaviour’. This perspective, as it currently stands, assumes a high degree of homogeneity in stakeholders’ responses to fair, unfair, or munificent treatment by the firm. This supposition is itself typically based on a presumption that stakeholders consistently and uniformly adhere to norms of equity and reciprocity in their relationships with firms. However, research developments in equity theory and social exchange theory suggest that such assumptions are likely untenable. Accordingly, in this work, after outlining the fairness-based perspective on stakeholder behaviour, I undertake to augment it by presenting propositions concerning the possible influences of stakeholders’ equity preferences and exchange ideologies on their propensities to sanction or support the firm. Incorporating these stakeholder traits into the fairness-based perspective should enhance the predictive validity of its propositions concerning stakeholder behaviour in response to fairness or unfairness in the firm–stakeholder relationship. (shrink)

This article extends our understanding of the firm–nongovernmental organization relationship by emphasizing the role of language in shaping organizational behavior. It focuses on discursive and rhetorical activity through which firms and NGOs jointly – and not always consciously – define boundaries for socially acceptable corporate behavior. It explores the discursive legitimation struggles of a leading Finnish forest industry company StoraEnso and Greenpeace during 1985–2001 and examines how these struggles participated in the definition and institutionalization of corporate social responsibility. I find (...) a mixture of rational and moral struggles as a key feature of this legitimation work and show how different manifestations of these struggles act as a central mechanism that redefines what the boundaries of corporate responsibility are in a specific setting at a given point of time. The study illustrates how the actors’ ability to sense the public’s views contribute to rhetorical difficulties of the industry and unintended societal consequences for the activists, and how the rational and moral struggles build up in time to trigger changes in the actors’ sensemaking and actions. (shrink)