This week we highlight articles looking at the different influences stakeholders can effect.
Salience of stakeholders & sustainable human resource management
The present paper analyses how top managers construct the meaning of sustainable human resource management (HRM) and its responsibility areas and how they identify and prioritise stakeholders in sustainable HRM. The empirical data were collected as part of the Finnish HR Barometer inquiry.
A qualitative analysis reveals four dimensions of sustainable HRM: Justice and equality, transparent HR practices, profitability, and employee well-being. It also reveals four broader responsibility areas: Legal and ethical, managerial, social, and economic. Contrary to the prior green HRM literature, ecological responsibility was largely ignored. The study also reveals a wide range of stakeholders, specifically, owners, managers, employees, customers, and employee representatives, as well as their special roles and requirements for sustainable HRM.
These findings contribute to the literature of sustainable HRM by illustrating the dimensions and broader responsibilities of sustainable HRM as seen by top managers. Their conceptions of sustainable HRM are largely neglected in the prior literature despite their crucial role in legitimating HRM and thus sustainable HRM in companies. These results also contribute to the theory of stakeholder salience (identification and prioritisation of stakeholders) in the sustainable HRM context from the viewpoint of top managers.
Maria Järlström, Essi Saru & Sinikka Vanhala. 2018. Sustainable Human Resource Management with Salience of Stakeholders: A Top Management Perspective.
Journal of Business Ethics, 152(3), 703–724.
Friedman’s view on individual freedom & Stakeholder Theory and Social Contract Theory
Friedman’s view on corporate social responsibility (CSR) is often accused of being incoherent and of setting rather low ethical standards for managers. This paper outlines Friedman’s ethical expectations for corporate executives against the backdrop of the strong emphasis he puts on individual freedom.
Doing so reveals that the ethical standards he imposes on managers can be strictly deduced from individual freedom and that these standards involve both deontological norms and the fulfillment of particular stakeholder expectations. These insights illustrate the necessity to reconsider how Friedman’s approach relates to other important normative theories of business ethics. Contrasting Friedman’s approach with stakeholder theory and integrative social contract theory—when considering the importance he assigns to individual freedom—shows how and why these approaches differ.
Still, the comparison also highlights striking similarities. This paper contributes to a better understanding of Friedman’s position—which is still one of the most influential approaches in business ethics research—because it enables a differentiated look at its strengths and weaknesses.
Johannes Jahn and Rolf Brühl. 2018. How Friedman’s View on Individual Freedom Relates to Stakeholder Theory and Social Contract Theory.
Journal of Business Ethics, 153(1), 41–52.
Stakeholder approach benefits people and profits
For decades, scholars have debated the corporate objective. Scholars have either advocated a corporate objective focused on generating value for shareholders or creating value for multiple groups of stakeholders. Although it has been established that the corporate objective can shape many aspects of the corporation—including culture, compensation, and decision making—to date, scholars have not yet explored its psychological impact; particularly, how the corporate objective might influence employee well-being.
In this article, the authors explore how two views of the corporate objective affect employee self-determination, a key component of overall psychological need satisfaction and well-being. The authors hypothesise that a corporate objective based on creating value for multiple stakeholders will increase employee psychological need satisfaction as compared to one focused on creating value for only shareholders.
Across four experimental studies and one field survey, the authors find consistent support for their hypotheses and test three facets of a stakeholder-focused corporate objective. Theoretical implications and future research directions are discussed.
Bidhan L. Parmar, Adrian Keevil and Andrew C. Wicks. 2019. People and Profits: The Impact of Corporate Objectives on Employees’ Need Satisfaction at Work.
Journal of Business Ethics, 154(1), 13–33.
Stakeholders and greening remote SMEs
The objective of this paper is to explore, through a qualitative study of small regional airports, how sustainability issues are taken into account in remote small- and medium-sized enterprises (SMEs). Based on 42 semi-structured interviews conducted with managers of small regional Canadian airports and experts in this area, this study shows the quasi-absence of specific measures for sustainability, despite the seriousness of environmental issues, which tend to be subordinated to economic priorities and operational activities.
The paper contributes to the literature on sustainability in SMEs by focusing on passive organisations located in remote areas and the complex reasons underlying their lack or absence of environmental commitment.
The paper sheds more light on the essential role of stakeholders in providing the resources and skills necessary for the development of sustainability initiatives in passive SMEs. The study’s managerial contributions and implications for stakeholders are also discussed.
Olivier Boiral, Mehran Ebrahimi, Kerstin Kuyken and David Talbot. 2019. Greening Remote SMEs: The Case of Small Regional Airports.
Journal of Business Ethics, 154(3), 813–827.
Engaging stakeholders in emerging economies
Stakeholder engagement is central to organisations’ social impact. Engagement activities rely on mechanisms whose complexity increases for multinational corporations (MNCs). This study explores the boundary conditions of our Western/Northern-based knowledge of stakeholder engagement mechanisms through the examination of such practices in multinational companies founded in Latin America (Multilatinas—MLs).
Based on previous studies on the identification of organisational stakeholders in the region, the authors aim to understand the specific engagement mechanisms MLs use. To this end, the authors analyse qualitatively 28 corporate sustainability reports by relevant firms. The findings show that the community includes silent (or non-visible) stakeholders composed of subgroups not listed as organisational stakeholders but mentioned in the report as engaged by the company or a subsidiary.
MLs in their sample use four main mechanisms to engage these subgroups: (a) strong, visible commitments to local social organisations; (b) continuous dialogue with members of the community; (c) networks of volunteers to help perform the social activities of the companies; and (d) creation of social infrastructure institutions.
The authors end by detailing the theoretical implications for stakeholder engagement among emerging economies multinational companies (EMNCs) and for MNCs in general.
Anabella Davila, Carlos Rodriguez-Lluesma and Marta M. Elvira. 2018. Engaging Stakeholders in Emerging Economies: The Case of Multilatinas.
Journal of Business Ethics, 152(4), 949–964.
Corporate philanthropy and risk management in insurance firms
Drawing a framework from strategic stakeholder theory and using 1999 to 2010 panel data from the United Kingdom’s (UK) non-life insurance industry, the authors examine the effect of reinsurance on the decisions to donate to charities, and the amount given. The authors find that reinsurance substitutes for charitable giving as it optimizes the interests of multiple stakeholders.
The authors further note that corporate giving is directly related to the size and age of insurers, proportion of female directorships and insider ownership, but generally inhibited by chief executive officer (CEO) bonus plans, dominant shareholders, and financial experts on the board.
Interestingly, when reinsurance interacts with board-level variables the authors find that the donations decision is positively related to CEO bonus plans, and negatively linked with inside ownership and the proportion of female board members. their research results could have important implications for stakeholders.
Mike Adams, Stefan Hoejmose, Zafeira Kastrinaki. 2017. Corporate Philanthropy and Risk Management: An Investigation of Reinsurance and Charitable Giving in Insurance Firms.
Business Ethics Quarterly, 27(1), 1-37.