Unfolding Stakeholder Thinking Theory, Responsibility and Engagement

This book – the first of a two-volume series – argues that, today, stakeholder thinking has evolved into the study of interactive, mutually engaged and responsive relationships that establish the very context of doing modern business, and create the groundwork for transparency and accountability. This book makes it clear that in today's societies successful companies are those that recognize that they have responsibilities to a range of stakeholders that go beyond mere compliance with the law or meeting the fiduciary responsibility inherent in maximizing returns to shareholders. If in the past the focus was on enhancing shareholder value, now it is on engaging stakeholders for long-term value creation. The process of engagement creates a dynamic context of interaction, mutual respect, dialogue and change – not a one-sided "management" of stakeholders. Indeed, the authors believe the very term "stakeholder management" to be outdated and corporate-centric. Companies can manage their relationships with stakeholders, but frequently cannot actually manage the stakeholders themselves, because, as the activist and collaborative initiatives described in this volume suggest, company-stakeholder relationships are not one-way streets and different institutions bring different agendas, goals and priorities to the engagement. There are clear implications to the way in which stakeholder thinking is unfolding today. If in the past corporate "social" responsibility was simply seen as profitability plus compliance plus philanthropy, now responsible corporate citizenship – or corporate responsibility – means companies being more aware of and understanding the societies in which they operate. Corporate responsibility means recognising that day-to-day operating practices affect stakeholders and that it is in those impacts where responsibility lies, not merely in efforts to "do good". Companies are now faced with a wide array of challenges that mean that senior executives and managers need to be able to deal with issues including greater accountability, human rights abuses, sustainability strategies, corporate governance codes, workplace ethics, stakeholder consultation and management. Stakeholder thinking needs to capture these new realities. The global reach of multinational corporations has served to highlight the need for the (re)integration of business into society, relationships into stakeholder relations, and ethics into managerial practice. The rise in power of global activism involving NGOs, and global business involving multinational corporations, makes it even more critical today for companies to consider the power and interests of corporate stakeholders when developing strategic plans. The interactivity and mutuality of relationships described in this book make it clear that firms and stakeholders share the power and responsibility to influence both the profit potential of the firm and how the benefits of the firm's success impact on society. This important volume brings together leading academic thought on stakeholder thinking for the first time. Unfolding Stakeholder Thinkingwill be indispensable to corporate managers, NGOs and academics seeking greater understanding of the dynamics of stakeholder thinking in a world of rapidly changing responsibilities.A companion volume, Unfolding Stakeholder Thinking 2, focusing on practical issues such as relationship management, communication, reporting, and performance, is also available.

ForewordR. Edward FreemanIntroductionSandra Sutherland Rahman, Framingham State College, USA, Sandra Waddock, Boston College, Carroll School of Management, USA, Jörg Andriof, KPMG, Germany; Warwick Business School, UK, and Bryan Husted, ITESM/Instituto De Empresa, MexicoPart I: Thinking about stakeholder theory1. Unfolding stakeholder engagementJörg Andriof, KPMG, Germany; Warwick Business School, UK, and Sandra Waddock, Boston College, Carroll School of Management, USA 2. Stakeholder thinking: beyond paradox to practicalityKenneth E. Goodpaster, T. Dean Maines and Michelle D. Rovang, University of St Thomas, USA3. Value maximisation, stakeholder theory and the corporate objective functionMichael C. Jensen, The Monitor Group and Harvard Business School, USA4. Jensen's approach to stakeholder theoryDuane Windsor, Rice University, USA5. Reintroducing stakeholder dynamics in stakeholder thinking: a negotiated-order perspectiveSuzanne Beaulieu, Universite de Sherbrooke, Canada, and Jean Pasquero, Université du Québec à Montréal, CanadaPart II: Stakeholder reponsibility and engagement6. Towards a managerial practice of stakeholder engagement: developing multi-stakeholder learning dialoguesStephen L. Payne, Georgia College and State University, USA, and Jerry M. Calton, University of Hawaii-Hilo, USA7. Stakeholder responsibilities: lessons for managersDuane Windsor, Rice University, USA8. The Carris Companies: making 100% employee governance the practice. Shifting stakeholder and citizen rights and responsibilities to the employeesCecile G. Betit, independent researcher, USA9. The drivers of stakeholder engagement: reflections on the case of Royal Dutch/ShellAnne T. Lawrence, San Jose State University, USA10. Stakeholder and corporate responsibilities in cross-sectoral environmental collaborations: building value, legitimacy and trustDennis A. Rondinelli and Ted London, Kenan-Flagler Business School, University of North Carolina, USA11. Two-way responsibility: the role of industry and its stakeholders in working towards sustainable developmentGretchen E. Hund and Jill A. Engel-Cox, Battelle Memorial Institute, USA, Kimberly M. Fowler, Pacific Northwest National Laboratory, USA, and Howard Klee, World Business Council for Sustainable Development, Switzerland12. Who cares? Community perceptions in the marketing of corporate citizenshipDebra King and Alison Mackinnon, Hawke Institute of Social Research, University of South Australia13. Citizen advocacy groups: corporate friend or foe?Tamara J. Bliss, Center for Corporate Citizenship at Boston College, USA14. Public-interest groups as stakeholders: a "stakeholder salience" explanation of activismJames E. Mattingly and Daniel W. Greening, University of Missouri, USA