A selection of interesting articles we found recently considering what pushes stakeholders to take action.
What mobilises stakeholders to take action against the firm?
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, authors Hayibor and Collins present and test hypotheses concerning stakeholders’ propensities to impose sanctions upon—or to support—firms. Using a vignette-based experiment, the researchers 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 mobilisation. Our results also suggest specific avenues for stakeholder dialogue that could help firms mitigate the likelihood of stakeholders taking damaging action against them.
The full paper is at: Hayibor, S. & Collins, C. Motivators of Mobilization: Influences of Inequity, Expectancy, and Resource Dependence on Stakeholder Propensity to Take Action Against the Firm.
Journal of Business Ethics, 139(2), 351–374.
Stakeholder relationships, engagement and sustainability reporting
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, Herremans, Nazari and Mahmoudian 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, Herremans et al. conducted their research using qualitative research methods. 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. The research explains why diversity exists in sustainability disclosure by studying how it is used to engage stakeholders.
The researchers 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 utilisation of stakeholder engagement for learning. The 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.
Find more detail at: Herremans, I.M., Nazari, J.A. & Mahmoudian, F. 2016. Stakeholder Relationships, Engagement, and Sustainability Reporting.
Journal of Business Ethics, 138(3), 417-435.
Suppliers as stewards? Managing social standards in suppliers
Buyer–supplier relationships are often framed as principal–agent relationships, based on contractual arrangements that temporarily align the goals of both parties. The underlying notion is that the relationship between buyers and suppliers is adversarial in nature and that the supplier, acting in the role of the agent, will take advantage of the principal if not sufficiently controlled.
Aßländer, Roloff and Nayır propose that there is empirically also another type of partnership which reflects the propositions of stewardship theory. According to this theory, suppliers are motivated to work autonomously towards contractually agreed objectives. Aßländer et al. analyse how the agency and stewardship theories differ regarding their descriptions of autonomy, motivation, identification, authority, stakeholder orientation and short- versus long-term collaboration.
The researchers analyse the case of a first-tier supplier and four second-tier suppliers situated in Turkey in the area of Istanbul which collaborate with the aim of improving their social and environmental performance. The results show that the relationship between the partners in this case has become more collaborative over time and can now be described in terms of stewardship theory rather than in terms of agency theory. Aßländer et al. conclude that the distinction between agency and stewardship relationships is empirically meaningful in the context of supplier–buyer relationships and adds a new aspect to our understanding of how to achieve more sustainable supply chains.
Find out more at: Aßländer, M.S., Roloff, J. & Nayır, D.Z. 2016. Suppliers as Stewards? Managing Social Standards in First- and Second-Tier Suppliers.
Journal of Business Ethics, 139(4), 661–683.
Managing biodiversity through stakeholder involvement
The increasing pressures to conserve biodiversity—particularly for industries based on the exploitation of natural resources—have reinforced the need to implement specific measures in this area. Corporate commitment to preserving biodiversity is increasingly scrutinized by stakeholders and now represents an important aspect of business ethics. Although stakeholder involvement is often essential to the management of biodiversity, very few studies in the literature have focused on the details of this involvement.
The objective of this paper is to analyse how mining and forestry companies can manage biodiversity issues through stakeholder involvement based on a content analysis of 430 sustainability reports using the Global Reporting Initiative (GRI) framework. The paper elucidates the reasons for such involvement, the nature of stakeholders involved, and the types of measures employed to manage biodiversity.
Stakeholders’ motives for becoming involved revolve around four main issues: complexity and knowledge management; self-regulation and relationships with public authorities; legitimacy and social responsiveness; and commercial and strategic objectives.
The stakeholders involved in biodiversity initiatives are essentially non-governmental organisations, experts and universities, public authorities, and coalitions of companies. In the end, the initiatives identified can be grouped into three categories: management practices, socio-political actions, and research and conservation measures. The paper provides various examples of these initiatives and shows how they can be implemented in collaboration with different stakeholders depending on the company’s objectives. The contributions the study makes to the literature on biodiversity management and the managerial implications of the study are analysed in the discussion section.
See the full paper: Boiral, O. & Heras-Saizarbitoria, I. 2017. Managing Biodiversity Through Stakeholder Involvement: Why, Who, and for What Initiatives?
Journal of Business Ethics, 140(3), 403–421.
Impact of organisation size on organisational social performance in universities
Organisations differ tremendously in the extent to which they engage in socially responsible behaviour and the extent to which this behaviour is evaluated by stakeholders.
This research examines the complex role of organisation size as a driver of perceptions of an organisation’s socially responsible behaviour and its social performance. Using a unique data set of 302 organisations in the higher education industry, the authors find that the strength of the organisation size–organisational social performance (OSP) relationship is contingent on whether the organisation is autonomous from community stakeholders and resource pressures.
The results show that the organisation size–OSP relationship is stronger when stakeholders in the organisation’s community are more involved in the organisation itself and decision-making processes, and that this relationship is weaker when greater financial and human resources are available to the organisation.
Full article is at: Eilert, M., Walker, K. & Dogan, J. 2017. Can Ivory Towers be Green? The Impact of Organization Size on Organizational Social Performance.
Journal of Business Ethics, 140(3), 537–549.