In this article, we will outline the principles of stakeholder capitalism and describe how this view rejects problematic assumptions in the current narratives of capitalism. Traditional narratives of capitalism rely upon the assumptions of competition, limited resources, and a winner-take-all mentality as fundamental to business and economic activity. These approaches leave little room for ethical analysis, have a simplistic view of human beings, and focus on value-capture rather than value-creation. We argue these assumptions about capitalism are inadequate and leave four (...) problems in their wake. We wish to reframe the narrative of capitalism around the reinforcing concepts of stakeholders coupled with value creation and trade. If we think about how a society can sustain a system of voluntary value creation and trade, then capitalism can once more become a useful concept. (shrink)

The problem of the relationship between actors and the social structures in which they are embedded is central to sociological theory. This paper suggests that the "new institutionalist" focus on fields, domains, or games provides an alternative view of how to think about this problem by focusing on the construction of local orders. This paper criticizes the conception of actors in both rational choice and sociological versions of these theories. A more sociological view of action, what is called "social skill," (...) is developed. The idea of social skill originates in symbolic interactionism and is defined as the ability to induce cooperation in others. This idea is elaborated to suggest how actors are important to the construction and reproduction of local orders. I show how its elements already inform existing work. Finally, I show how the idea can sensitize scholars to the role of actors in empirical work. (shrink)

ABSTRACT:In a world filled with poverty, environmental degradation, and moral injustice, social enterprises offer a ray of hope. These organizations seek to achieve social missions through business ventures. Yet social missions and business ventures are associated with divergent goals, values, norms, and identities. Attending to them simultaneously creates tensions, competing demands, and ethical dilemmas. Effectively understanding social enterprises therefore depends on insight into the nature and management of these tensions. While existing research recognizes tensions between social missions and business ventures, (...) we lack any systematic analysis. Our paper addresses this issue. We first categorize the types of tensions that arise between social missions and business ventures, emphasizing their prevalence and variety. We then explore how four different organizational theories offer insight into these tensions, and we develop an agenda for future research. We end by arguing that a focus on social-business tensions not only expands insight into social enterprises, but also provides an opportunity for research on social enterprises to inform traditional organizational theories. Taken together, our analysis of tensions in social enterprises integrates and seeks to energize research on this expanding phenomenon. (shrink)

This paper argues that the notion of value has been overly simplified and narrowed to focus on economic returns. Stakeholder theory provides an appropriate lens for considering a more complex perspective of the value that stakeholders seek as well as new ways to measure it. We develop a four-factor perspective for defining value that includes, but extends beyond, the economic value stakeholders seek. To highlight its distinctiveness, we compare this perspective to three other popular performance perspectives. Recommendations are made regarding (...) performance measurement for both academic researchers and practitioners. The stakeholder perspective on value offered in this paper draws attention to those factors that are most closely associated with building more value for stakeholders, and in so doing, allows academics to better measure it and enhances managerial ability to create it. (shrink)

Within stakeholder literature, much attention has been given to which stakeholders "really count." This article strives to explain why organizational theorists should abandon the pursuit of "Who and What Really Counts" to challenge the assumption of a managerial perspective that defines stakeholder legitimacy. Reflecting on the paucity of employee rights and protections in marginalized work environments, I argue that as organizational researchers, we must recognize and take responsibility for the impact of our research models and visions. By confronting and rethinking (...) the foundational assumptions of stakeholder theory, business and society scholars can identify and pursue research questions that more effectively address contemporary social challenges. (shrink)

Stakeholder theory has become a central issue in the literature on business ethics / business and society. There are, however, a number of problems with stakeholder theory as currently understood. Among these are: 1) the lack of a coherent justificatory framework, 2) the problem of adjudicating between stakeholders, and 3) the problem of stakeholder identification. In this essay, I propose that a possible source of obligations to stakeholders is the principle of fairness (or fair play) as discussed in the political (...) philosophic literature of Rawls, Simmons, and Cullity among others. The principle of fairness states that, “Whenever persons or groups of persons voluntarily accept the benefits of a mutually beneficial scheme of co-operation requiring sacrifice or contribution on the parts of the participants and there exists the possibility of free-riding, there exist obligations of fairness on the part of these persons or groups to co-operate in proportion to the benefits accepted.” In this essay I discuss the gaps in the current stakeholder literature, elucidate and defend a principle of fairness that fills the gap, compare the fairness model to other similar models of business ethics, and draw some conclusions for the future of stakeholder theory. (shrink)

Critics of SRI have said little about the integrity of corporate representations resulting in screening inclusion or exclusion. This is surprising given social and environmental accounting research that finds corporate posturing and deception in the absence of external verification, and a parallel body of literature describing corporate "greenwashing" and other forms of corporate disinformation. In this paper I argue that the problems and challenges of ensuring fair and accurate corporate social reporting mirror those accompanying corporate compliance with law. Similarities and (...) points of convergence between social reporting and corporate compliance are discussed, along with proposals for reform. (shrink)

To date, economics has failed to develop a useful theory of entrepreneurship because of its inability to break out of the static equilibrium framework and the modeling of success/failure as a 0-1 variable. Entrepreneurship research also has not achieved this task due to its preoccupation with the quest for “the successful entrepreneur” and/or the successful firm. This essay calls for a new vocabulary for entrepreneurship, consisting of (1) a plural notion of the entrepreneurial process as a stream of successes and (...) failures, wherein failure management becomes the key science of entrepreneurship; (2) an effectual notion of bringing together particular entrepreneurs and particular environments through creative action; and (3) a contingent notion of aspirations that places imagination at the center stage of economics. Together, the new vocabulary allows us to ask new questions and develop new approaches that allow entrepreneurship to tackle the central task of imagination in economics, i.e., to create from the society we have to live in, the society we want to live in. (shrink)

We ask what type of neutralization techniques corporations apply to allegations of human rights abuses. We proceed by undertaking a Qualitative Content Analysis of 162 responses by ten extractives-sector firms over a period of 14 years. The firms were responding to accusations of human rights impacts documented by the Business and Human Rights Resource Centre. We use Garrett et al.’s :507–520, 1989) framework of neutralization techniques consisting of denial, justification, concession and excuse to examine the responses. During our QCA, we (...) observed emerging themes around self-promotion and evasive tactics. We contribute to existing literature by proposing ‘evasion’ as a novel neutralization technique, particularly in circumstances of corporate responses to accusations of wrongdoing. We argue that evasion occurs when firms refuse to engage in the debate brought forward in an accusation. In addition, we enrich our understanding of neutralization techniques by proposing subneutralization techniques in our analysis to diverge from that of other studies. We conclude by discussing the implications of the predominance of corporate narcissism and evasive neutralization techniques to the business and human rights movement and other international corporate responsibility standards. (shrink)

Based on my study of the Rhodes Must Fall movement, I develop a rejectionist perspective by identifying the understanding and mobilization of epistemic disobedience as the core premise of such a perspective. Embedded in this contextual perspective, epistemic disobedience refers to the decolonization of the self and a fight against colonial legacies. I argue that, rather than viewing a rejectionist perspective as a threat, it should be integrated into the moral learning of contemporary institutions and businesses. This approach is important (...) in ensuring colonial legacies and biases do not create further racism or unequal situations for marginalized groups. The implication for critical management studies is that scholars from this camp should be more sensitive to issues of black consciousness and implement an authentic pragmatic ideal to promote black culture and historiographies in universities and curricula. It also highlights a need for the field of business ethics to apply more sensitive theory of marginalized stakeholders in order to prevent any escalation of violence by multinational corporations in the name of shareholder value creation and profit-maximization. (shrink)

This article provides a social movement theory—based explanation for the emergence and influence of corporate stakeholders. The author argues that stakeholder influence originates in the collective action of potential stakeholders. Collective action binds individual stakeholders together, assists in the formation of a common identity and interests, and provides the means for stakeholder strategic action. The author suggests three main factors that explain the emergence of stakeholder collective action and its consequent influence: mobilizing structures, corporate opportunities, and framing processes. By focusing (...) more on the collective action necessary for stakeholder influence, we also gain a better understanding of how negotiation processes might unfold between stakeholders and corporate decision makers. (shrink)

Although scholars have long known that entrepreneurship involves the interaction of countless individuals beyond the entrepreneur, traditional performance metrics are limited to capturing the economic value that is created for shareholders. Multiple scholars have suggested that it should be possible to develop a more complete assessment that is able to simultaneously capture both the economic and non-economic consequences of entrepreneurship that exist for the broader network of firm stakeholders. The purpose of this paper is to provide a more nuanced understanding (...) of entrepreneurial performance by operationalizing the concept of stakeholder capabilities. Building on concepts from stakeholder theory and the human development and capability approach in welfare economics, we argue that the pursuit of entrepreneurial opportunities can either create or destroy value for multiple stakeholders, and that this value is best conceived in terms of increases and decreases in individual capabilities. Approaching entrepreneurial performance from a stakeholder capabilities lens has implications for how we view entrepreneurs’ impact on society, what we mean by the creation and destruction of “value,” and how we define failure and success in entrepreneurship. (shrink)

Stakeholder theory advocates that firms bear responsibility for the implications of their actions. However, while a firm affects or can affect stakeholders, stakeholders can also affect the corporation. Previous stakeholder theorising has neglected the reciprocal nature of responsibility. The question can be asked whether—in a spirit of reciprocity, loyalty and fairness—stakeholders should treat the corporation in a fair and responsible way. This study based on different definitions of stakeholders argues that various stakeholder attributes differ for different categories of stakeholders. This (...) analysis presumes that the attribute of stakeholder reciprocity can probably be restricted to real stakeholders, labelled stakeowners: genuine stakeholders with a legitimate stake, the loyal partners who strive for mutual benefits. Stakeowners own and deserve a stake in the firm. Stakeholder reciprocity could be an innovative criterion in the corporate governance debate as to who should be accorded representation on the board. Corporate social responsibility should imply corporate stakeholder responsibility. (shrink)

Taking the lead from Susan Wolf's and Linda Emanuel's work on systems thinking, and developing ideas from Moberg's, Seabright's and my work on mental models and moral imagination, in this paper I shall argue that what is often missing in management decision-making is a systems approach. Systems thinking requires conceiving of management dilemmas as arising from within a system with interdependent elements, subsystems, and networks of relationships and patterns of interaction. Taking a systems approach and coupling it with moral imagination, (...) now engaged on the organizational and systemic as well as individual levels of decision-making, I shall conclude, is a methodology that encourages managers and companies to think more imaginatively and to engage in integrating moral decision-making into ordinary business decisions. More importantly this sort of thinking is a means to circumvent what often appear to be intractable problems created by systemic constraints for which no individual appears to be responsible. (shrink)

1 Here’s a way to think about poverty. People who live in poverty do so because they have few opportunities to pull themselves up by their bootstraps. In fact the gap between rich and poor has increased in recent times due to the more wholesale adoption of capitalist practices around the world. The institutions of business and government conspire to give the poor a Hobson’s choice of minimal wage McJobs or unemployment. Neglect of both urban ghettoes and the rural poor (...) has been systematic, if not conscious. The very idea of capitalism reinforces the notion that some are meant to be poor and some are meant to be rich. Such a system must be overridden at times by government to help the poor cope with their lot. The only solution is a massive redistribution of income and a system of capitalism that is severely restrained. All of this is at best highly unlikely. Even if there were such a redistribution policy we could not count on government to execute it fairly. (shrink)

Current incentive structures are more favorably aligned with the world’s problems than with their solutions. We conceptualize this as the paradox of incentives to argue the need for new thinking and restructuring of incentives to break the paradox during the COVID-19 pandemic and beyond, and create new opportunities for societal transformation.

Distinguishing “business” concerns from “ethical” values is not only an unfruitful and meaningless task, it is also an impossible endeavor. Nevertheless, fruitless attempts to separate facts from values produce detrimental second-order effects, both for theory and practice, and should therefore be abandoned. We highlight examples of exemplary research that integrate economic and moral considerations, and point the way to a business ethics discipline that breaks new ground by putting ideas and narratives about businesstogetherwith ideas and narratives about ethics.

While discovery of error provides personal gain for the entrepreneur, does this process automatically allocate value equitably among all stakeholders? We argue that the entrepreneurial process can be used to generate or maintain an entrepreneur’s personal wealth through the exploitation of a stakeholder group. Thus entrepreneurship can be both an equilibrating and a disequilibrating process and that both the visible hand of government and the decisions of an entrepreneur can speed or slow our movement toward value equilibrium. Speed toward value (...) equilibrium is likely to be important to a victimized stakeholder group and deserves further scholarly attention. (shrink)

I argue that meta-ignorance and meta-insensitivity are the key sources influencing the reoccurrence of the (un)conscious misrepresentation of marginalized groups in management and organization research; such misrepresentation, in effect, perpetuates epistemic neocolonialism. Meta-ignorance describes incorrect epistemic attitudes, which render researchers ignorant about issues such as contextual history and emotional and political aspects of a social problem. Researcher meta-ignorance can be a permanent feature, given how researchers define, locate, and make use of their epistemic positionality and privilege. In contrast, meta-insensitivity is (...) a special issue that arises when researchers miss multiple opportunities to capture valuable aspects of marginalized groups’ voices or their life experiences and expectations. The problem of meta-insensitivity during fieldwork is more serious because researchers—despite their apparent willingness to be innovative—fail to understand how to be sensitive toward marginalized groups. The perpetuation of these elements’ misrepresentation contributes to long-lasting negative consequences for marginalized groups. To counter this, I introduce and conceptualize the idea of oppositional views which researchers can mobilize to address misrepresentation of marginalized groups and challenge epistemic neocolonialism. (shrink)

The problems and prospects currently facing Institutional Theory are addressed by scrutinizing recent proposals for focusing upon ‘institutional work’ in a way of that promises to overcome some limitations of its “old,” “neo,” and “entrepreneurialist” incarnations. Current proposals to pay closer attention to ‘institutional work’ are seen to reproduce the dualism of individual /institution as they invite a further flip-flop between these poles, To escape this cycle, a start can be made by incorporating into Institutional Theory a critically reflexive appreciation (...) of the ‘individual’ as an institution. Such a move is consistent with a contemporary interest in bridging institutional and critical scholarly traditions. In constructing this bridge, the challenge is to advance scholarship in a direction that, being collaborative rather than predatory, does not obfuscate or domesticate the emancipatory intent of critical analysis. (shrink)

ABSTRACT:This paper re-examines the import of Rawls’s theory of justice for private sector institutions in the face of the decline of the welfare state. The argument is based on a Rawlsian conception of justice as the establishment of a basic structure of society that guarantees a fair distribution of primary goods. We propose that the decline of the welfare state witnessed in Western countries over the past forty years prompts a reassessment of the boundaries of the basic structure in order (...) to include additional corporate institutions. A discussion centered on the primary good of self-respect, but extensible to power and prerogatives as well as income and wealth, examines how the legislator should intervene in private sector institutions to counterbalance any unfairness that results from the decline of the welfare state. (shrink)

In modern societies entrepreneurship and innovation are widely seen as key sources of economic growth and welfare increases. Yet entrepreneurial innovation has also meant losses and hardships for some members of society: it is destructive of some stakeholders’ wellbeing even as it creates new wellbeing among other stakeholders. Both the positive benefits and negative externalities of innovation are problematic because entrepreneurs initiate new ventures before their private profitability and/or social costs can be fully recognized. In this paper we consider three (...) analytical frameworks within which these issues might be examined: pre-commitments, contractarianism, and an entrepreneurial framework. We conclude that the intersection of stakeholder theory and entrepreneurial innovation is a potentially rich arena for research. (shrink)

This book develops some of the most important themes of Sen's works over the last decade. He argues in a rich and subtle approach that we should be concerned with people's capabilities rather than their resources or welfare.

This article analyses the ethics of how community engagement and dialogue as applied by a mining corporation in Chile led to erosion of the community’s psychological freedom despite being aligned with best practice. This article details how a mining company squeezed the psychological freedom of the community in order to obtain an agreement between the period of 2000 and 2016. The findings focus particularly on a 9-month period between 2015 and 2016 when the company undertook intense community engagement. The article (...) identifies six corporate action phases undertaken which curtailed the community’s psychological freedom as paying off local leaders; challenging via courts of law; co-opting community lawyers; prohibiting a key debate during dialogue; and remaining silent after failing to honour its own self-imposed rule. The findings label the company’s community engagement as contradictory; while it conducted transitional and transformational engagement in formal spaces, it also engaged in unethical strategies in the informal spaces of community engagement. The result was overall community consent and an even more fragmented community. This article finds that when it limits the psychological freedom of participants, who are already divided as a group, corporate–community engagement can be viewed as ethically problematic. Based on analysis of the literature and an empirical case analysis, this article contributes a test for assessing the ethics of CCE. (shrink)

This article examines the theoretical implications of the changing relationships between NGOs and businesses that have emerged as a response to the evolving agenda around CSR and sustainable development. In particular, it focuses upon examining whether greater engagement from non-governmental organisations (NGOs) in this area reflects a process of appropriation and co-optation of protest by the business community. To examine this process, the article considers two forms of appropriation—appropriation of language and appropriation via participation—as a basis for discussion. While co-optation (...) pressures are identified within both areas, the article argues that co-optation is identified almost as an inevitable outcome of engagement without significant consideration of the ability of movements to identify and respond to these processes. In identifying an alternative approach, the article utilises Mouffe’s framework of agonistic pluralism. Mouffe’s framework, it is argued, provides an understanding of the way in which agonistic relationships are emerging between NGOs and businesses while highlighting the continuance of conflict between parties struggling to influence the contested interpretations of responsible business. (shrink)

Carroll (1991) encouraged researchers in Social Issues Management (SIM) to continue to measure Corporate Social Performance (CSP) from a variety of different perspectives utilizing a variety of different measures. In addition, Wolfe and Aupperle (1991) (and others) have asserted that there is no, single best way to measure CSP and that multiple measures and perspectives help develop the field. However, Pfeffer (1993) suggest that a lack of consistent measurement has constrained organization studies (and by implication, the field of social issues (...) management,) in its development as a field. It may be in the best interest of social issues management researchers to try to development a common body of measures and data. Recently, Kinder, Lydenberg and Domini & Co. (KLD — a social choice investment advisory firm) has made available their social performance database. The KLD data have potential to become a widely accepted set of CSP measures. The purpose of this paper is to present a construct validity study comparing the KLD data to other measures of CSP. (shrink)

In spite of the thousands of articles on stakeholder theory, research on value creation has had a shorter history and narrower breadth. Only a few studies have researched value creation from stakeholder perspective looking at how stakeholders appropiate value or the processes or activities by which stakeholders create value. Consequently to date, certain questions still remain unanswered regarding how a firm should treat stakeholders in order to create value. Several questions arise specifically from the stakeholder's side: What does "value" mean (...) for a particular group of stakeholders and how do firms create these different types of value? How do we measure the value created by stakeholders? The purpose of this paper is to answer these questions from Amartya Sen's Capability Approach, identifying and measuring stakeholders' capabilities in the value creation process. Stakeholder Capability is the adequate concept for understanding stakeholder welfare rather than the utility function concept. The empirical evidence comes from an in-depth case study of the company The Grobo Group and its stakeholders. According to the results, the following stakeholder capabilities are relevant to value creation: being employable, being autonomus, being innovative, being entreprenurial, being responsive, being socially integrated, being emphatic, being "green" and being healthy. (shrink)

We adopt and extend the concept of ‘noncooperative space’ to analyze how (aspirant) black women intellectual activists attempt to sustain their efforts within settings that publicly endorse racial equality, while, in practice, the contexts remain deeply racist. Noncooperative spaces reflect institutional, organizational, and social environments portrayed by powerful white agents as conducive to anti-racism work and promoting racial equality but, indeed, constrain individuals who challenge racism. Our work, which is grounded in intersectionality, draws on an autoethnographic account of racially motivated (...) domestic violence suffered by our lead author. Our analysis suggests that (aspirant) black women intellectual activists must develop courage to sustain their ‘voice’ within noncooperative spaces. However, the three interlinked dimensions of noncooperative spaces—namely, deceiving design, hegemonic actors’ indifference to racism, and (some assimilated gatekeepers’) false equivalence—may gradually erode a black female scholar’s courage. This forces her ‘voice’ to vanish temporarily, or even permanently. Courage is thus fragile and depletable. Yet, courage can be regenerated, resulting in regaining voice. Consequently, we propose courageous collective action by white allies and black and brown individuals who voluntarily and officially cooperate within and across various spaces to achieve racial equality. (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)

This article uses philosopher Miranda Fricker’s work on epistemic injustice to shed light on the legal concept of the fiduciary, alongside demonstrating the wider contribution Fricker’s work can make to business ethics. Fiduciary, from the Latin fīdūcia, meaning “trust,” plays a fundamental role in all financial and business organisations: it acts as a moral safeguard of the relationship between trustee and beneficiary. The article focuses on the ethics of the fiduciary, but from a unique historical perspective, referring back to the (...) original formulation of the fiduciary within a familial context to investigate presuppositions regarding agential capabilities, whilst also paying attention to the power mechanism embedded in the trustee–beneficiary relationship. Using Fricker’s theory of pre-emptive testimonial injustice, the analysis elucidates the impact of cumulative beneficiary silencing in contemporary contexts, and the article uncovers ethical issues of an epistemological kind at the core of the fiduciary—of epistemic injustice. (shrink)

In 1998-1999, Prahalad and colleagues introduced the base/bottom of the pyramid concept in an article and a working paper. This article’s goal is to answer the following question: What has become of the concept over the decade following its first systematic exposition in 1999? To answer this question, the authors conducted a systematic review of articles on the BOP, identifying 104 articles published in journals or proceedings over a 10-year period . This count excludes books, chapters, and teaching cases. The (...) review shows that the BOP concept evolved dramatically following Prahalad’s original call to multinational enterprises . Deemphasizing the role of MNEs over time, published BOP articles portray a more complex picture, with wide variations in terms of BOP contexts, of BOP initiatives, and of impacts of the BOP approach. A simple framework for organizing the reviewed articles helps discuss findings, identify the gaps that still exist in the literature, and suggest directions for future research. (shrink)