Business is expected to contribute to grand challenges (GC) such as poverty within their corporate social responsibilities. Multi‐stakeholder initiatives (MSIs) have developed to a popular governance model to address GC. While existing scholarship has discussed the positive and negative aspects of MSIs, we know relatively little about how corporations within MSIs are held accountable. The objective of the study is to analyze the dynamics of accountability relationships between the corporate actor and the accountability forum to conceive a process model for (...) effective accountability relationships in developing countries. We conducted an inductive study which explored the tensions the accountability forum perceives in MSI accountability relationships and the criteria to meet the forum's accountability claims. Our study identified four accountability criteria: transparency, inclusion, procedural fairness, and efficacy. Our main theoretical claim is that considering the four accountability criteria in the process of facilitating, dialoguing, and evaluating allows affected stakeholders to validate and match legitimacy claims with their own expectations, and thus, manage MSIs more effectively. Our contribution to existing scholarship on MSIs in developing countries is that we offer a novel perspective on analyzing the effectiveness of MSIs to address GC through our focus on one element of MSIs––specifically accountability. Beyond academic theorizing, this perspective may well hold value for nongovernmental organizations, policymakers, and business managers as it advances a concept of responsibility based on a set of accountability criteria which have the potential to become a cornerstone for how MSI members can organize to effectively address GC in developing countries. (shrink)

Organizations routinely make choices when addressing conflicting stakes of their stakeholders. As stakeholder theory continues to mature, scholars continue to seek ways to make it more usable, yet proponents continue to debate its legitimacy. Various scholarly attempts to ground stakeholder theory have not narrowed down this debate. We draw from the work of Juergen Habermas to theoretically advance stakeholder theory, and to provide practical examples to illustrate our approach. Specifically, we apply Habermas’ language-pragmatic approach to extend stakeholder theory by advancing (...) seven sets of normative axioms. We conclude that a deliberative approach, with its focus on the conditions of legitimation and deliberative democracy, has the potential to become a cornerstone of stakeholder theory. The need for global stakeholder discourse and its internalization in corporate structures and institutions is exemplified by a multitude of CSR and stakeholder initiatives that have mushroomed in response to global risk scenarios such as climate change, nuclear warfare, or terrorism. Further research may help to build a functioning global governance system in order to provide guidance for management in the 21st century. (shrink)

This paper addresses the question of whether and how public action via civil society and/or government can meaningfully shape industry-wide corporate responsibility behaviour. We explore how, in principle, ICR can come about and what conditions might be effective in promoting more ethical behaviour. We propose a framework to understand attempts to develop more responsible behaviour at an industry level through processes of negotiation and coalition building. We suggest that any attempt to meaningfully influence ICR would require stakeholders to possess both (...) power and legitimacy; moreover, magnitude and urgency of the issue at stake may affect the ability to influence ICR. The framework is applied to the retail banking industry, focusing on post-crisis experiences in two countries—Spain and the UK—where there has been considerable pressure on the retail banking industry by civil society and/or government to change behaviours, especially to abandon unethical practices. We illustrate in this paper how corporate responsibility at the sector level in retail banking is the product of context-specific processes of negotiation between civil society and public authorities, on behalf of customers and other stakeholders, drawing on legal and other institutions to influence industry behaviour. (shrink)

Motivated by the ongoing controversy surrounding corporate tax, this article presents a study that explores stakeholder expectations of corporate tax in the context of UK business. We conduct a qualitative analysis of in-depth interviews with representatives of community groups, as well as interviews with those representing business groups. We then identify eight themes that together describe “what” companies need to do, “how” they need to do it, and “why” they need to do it, if they wish to appeal to a (...) wide group of interested parties. We discuss our findings based on the corporate social responsibility literature and propose novel ways for community groups and business groups to connect on the topic of corporate tax, suggesting opportunities and themes for dialogue and potential steps to co-create solutions in a stakeholder society. (shrink)

Management and business literature affirm the role played by stakeholders in corporate social responsibility practices as crucial, but what constitutes a true business–society partnership remains relatively unexplored. This paper aims to improve scholarly and management understanding beyond the usual managers’ perceptions on salience attributes, to include how stakeholders can acquire missing attributes to inform a meaningful partnership. In doing this, a model is proposed which conceptualises CSR practices and outcomes within the frameworks of stakeholder salience via empowerment, sustainable corporate social (...) performances and partnership quality. A holistic discussion leads to generation of propositions on stakeholder salience management, corporate social performance, corporate–community partnership systems and CSR practices, which have both academic and management implications. (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)

Managers in ethnic businesses are confronted with ethical dilemmas when taking action based on ethnic ties; and often as a result, they increase the already vulnerable positions of these businesses and their stakeholders. Many of these dilemmas concern the capital that is generated through variations in the use of ethnic stakeholder social ties. The purpose of this paper is to suggest a stakeholder-based model of social capital formation, mediated by various forms of ethnic ties, to explore the duality of ethnicity: (...) it can aid and hinder an ethnic business. Drawing upon the social capital/economic development, stakeholder salience, ethnic businesses literatures, and on social identity theory, we develop a cyclical model of relationships among ethnic business stakeholder attributes and social capital, as mediated by three-way Simmelian bonding and bridging ties, which then, in turn, affects the ethnic stakeholder attributes. We argue that the development of bridging yet strong ties through this cyclical process is relevant for the improvement of the positions of ethnic businesses in terms of both economic success and social responsibility. Specifically, we suggest that, given the duality of ethnicity in business, managers can prioritize stakeholder relationships based upon how these stakeholder ties affect social capital. (shrink)

Existing research highlights the role of partnerships between business and non‐governmental organisations (NGOs) in addressing poverty, climate change, disease and other challenges. But less is known about how such partnerships may also challenge our very understanding of the nature of those problems. This paper draws on Habermas' theoretical ideas about communicative action and deliberative democracy, applying them to an ethnographic study of Concern Universal, an international NGO with a particular focus on working collaboratively with business. The focus of the study (...) is the seam between two apparently different ‘worlds’, along which alternating processes of ‘colonisation’ and resistance are played out. Partnership emerges as an arena for both instrumental and communicative encounters, in which slow progress is occasionally punctuated by leaps in partners' understanding of both themselves and the challenges they seek to address. As such, despite the evolutionary ambitions of participants, partnership emerges as a potential catalyst of social change. (shrink)

As forms of private self-regulation, multi-stakeholder initiatives have emerged as an important empirical phenomenon in global governance processes. At the same time, MSIs are also theoretically intriguing because of their inherent double nature. On the one hand, MSIs spell out CSR standards that define norms for corporate behavior. On the other hand, MSIs are also the result of corporate and stakeholder behavior. We combine the perspectives of institutional theory and club theory to conceptualize this double nature of MSIs. Based on (...) a stage model that looks at the interplay of actor and institutional dynamics, we generate insights into why actors join a voluntary MSI, how the various motivations and intentions of the actors influence the standard development, and how these as well as the MSI design are subsequently influenced by both external and internal dynamics. (shrink)

Multinational corporations are operating in complex business environments. They are confronted with contradictory institutional demands that often represent mutually incompatible expectations of various audiences. Managing these demands poses new organizational challenges for the corporation. Conducting an empirical case study at the sportswear manufacturer Puma, we explore how multinational corporations respond to institutional complexity and what legitimacy strategies they employ to maintain their license to operate. We draw on the literature on institutional theory, contingency theory, and organizational paradoxes. The results of (...) our qualitative longitudinal study show that managing corporate legitimacy is a dynamic process in which corporations adapt organizational capacities, structures, and procedures. (shrink)