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. (shrink)

From an analysis of the role of companies in multi-stakeholder networks and a critical review of stakeholder theory, it is argued that companies practise two different types of stakeholder management: they focus on their organization’s welfare (organization- focussed stakeholder management) or on an issue that affects their relationship with other societal groups and organizations (issue-focussed stakeholder management). These two approaches supplement each other. It is demonstrated that issue-focussed stakeholder management dominates in multi-stakeholder networks, because it enables corporations to address complex (...) problems and challenges in cooperation with stakeholders. Since deliberation is the key to issue-focussed stakeholder management, it helps to cope with numerous and at times contradictory stakeholder demands and enhances the legitimacy of corporate activities. (shrink)

ABSTRACT:Employing utilitarian criteria, Jones and Felps, in “Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique” (Business Ethics Quarterly23[2]: 207–38), examined the sequential logic leading from shareholder wealth maximization to maximal social welfare and uncovered several serious empirical and conceptual shortcomings. After rendering shareholder wealth maximization seriously compromised as an objective for corporate operations, they provided a set of criteria regarding what a replacement corporate objective would look like, but do not offer a specific alternative. In this article, we draw (...) on neo-utilitarian thought to advance a refined version of normative stakeholder theory that we believe addresses a major remaining criticism of extant versions, their lack of specificity. More particularly, we provide a single-valued objective function for the corporation—stakeholder happiness enhancement—that would allow managers to make principled choices between/among policy options when stakeholder interests conflict. (shrink)

In this article, we offer an approach of how participative stakeholder innovation can be evaluated in complex multistakeholder settings that address wicked issues. Based on the principle of mutual value creation, we present an evaluation framework that accounts for the social interaction process during which stakeholders integrate their resources and capabilities to develop innovative products and services. To assess this evaluation framework, we collected multiple data from the case study of the Swiss Cardiovascular Network, which represents a multistakeholder setting related (...) to the prevention of cardiovascular disease. Our findings indicate that the evaluation dimensions of the stakeholders’ mindsets, the process and context of the stakeholder interactions, as well as the outcomes are useful concepts to account for a cooperative process of innovation in a multistakeholder setting. We discuss both the theoretical and practical insights of our analysis for participative stakeholder innovation. (shrink)

A notable feature of paradox is recognition that seemingly contradictory terms are inextricably intertwined and interrelated—holding out the hope that something new can be learned from the cognitive tension contained within. Aram has characterized the central concern of the business and society field as the paradox of interdependent relations. Our study argues that this and related paradoxes can be addressed by engaging with others and trying to gain shared insight via an interactive, developmental, exploratory sensemaking process that can inform the (...) governance of stakeholder networks. We advocate multistakeholder learning dialogues (MSLDs) as a means for both scholars and practitioners to construct meanings that can guide joint efforts to cope with messy problems that help shape complex, paradoxical relationships within stakeholder networks. (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)

In this article, we propose an adaption to stakeholder theory whereby stakeholders are conceptualized on the basis of their social identity. We begin by offering a critical review of both traditional and more recent developments in stakeholder theory, focusing in particular on the way in which stakeholder categories are identified. By identifying critical weaknesses in the existing approach, as well as important points of strength, we outline an alternative approach that refines our understanding of stakeholders in important ways. To do (...) so, we draw on notions of social identity as the fundamental basis for group cohesion, mobilization, and action. A new form of cross-mapping as a basis for stakeholder identification is advanced and key research questions are set out. (shrink)

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. (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)

I propose an ethnographic study on the incremental transformation of identity. Through an analysis of managerial perceptions of stakeholder influence, I suggest that identity is adaptive rather than enduring and that, to explain adaptive identity, group identity is more appropriate than an organizational identity perspective. The case study uses qualitative data collected in organizations manufacturing flavors and fragrances for the large consumer goods industries. The analysis reveals that attributes shared with clannish stakeholders gradually replace attributes of a claimed identity, and (...) that, when confronting hostile stakeholders, organizations act in solidarity with clannish stakeholders. The discussion elaborates on the porosity of identity boundaries and the mobility of attributes, two important mechanisms that have emotional, behavioral, and strategic consequences. (shrink)