Stakeholder Theory A Model for Strategic Management

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Stakeholder Theory A Model for Strategic Management

Maria Bonnafous-Boucher, Jacob Dahl Rendtorff (2016)

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PREFACE

 

It is a special pleasure and privilege to write this preface to Stakeholder Theory. A Model for Strategic Management. While much of this book is territory that is familiar to me, there is much new ground. They have built on the contributions of many others, and suggested that stakeholder theory can be pushed in new directions that are important to make societies better.

When they suggest that “Stakeholder theory examines the displacement of traditional sovereignties towards other forms of institutional legitimacy” they rightly understand the critical philosophical attitude which comprise the origins of the theory from Rhenman onwards. Their conclusion is equally powerful: In the fi nal analysis, stakeholder theory questions the traditional frontiers between the pub- lic space and the private space; it deconstructs the categories of political philosophy, ethics, the economy of organizations, and corporate strategy; it suggests treating these categories in a new way. It borrows the most classical concepts from currents of liberal philosophy from Locke to Rawls in order to them in contemporary forms of sovereignty, of govern ment, of civil society, of social contract, of the redefi nition of the common good, of social justice, of deliberation in the public space. In so doing, stakeholder theory creates a current within contemporary political philosophy, that of a critical philosophy of institutions, particularly the corporation.

Seeing the development of stakeholder theory as a way to set business within society, rather than in some fi ctional space of abstract economics or “free markets disconnected with the humanness of real business” is an achievement of the fi rst order.
It is my sincere hope that this book catalyzes a line of research that connects business theory with political philosophy. For too long business theory has been separated from the rest of the human sciences, especially those who recognize the normative as fundamental. And equally, for too long the fi rst question of political 
philosophy has been, “how is the state to be justifi ed”. Stakeholder theory as interpreted in this volume has the potential to build more useful theories about the connections between business and political life, between business theory and political philosophy and ethics, and between the practical worlds of business and civil society. Such as task may turn out to be central to building a world that is worth leaving to our children.

CONTENTS

1 From “The Stakeholder” to Stakeholder Theory .................................. 1
Defi nitions ................................................................................................... 1
Conceptual Framework: R. E. Freeman (1984–2010)
and His Followers ....................................................................................... 4
Parameters of the Theory ............................................................................ 8
Epistemological Debates and Theoretical Pluralism .................................. 10
Is Stakeholder Theory a Theory? ........................................................... 11
A Concrete Theory: Categorizing the Actors Who Count
in Corporate Strategy ............................................................................. 11
A Theoretical Pluralism Revealed by Donaldson
and Preston (1995) ................................................................................. 15
Critiques of the Theory ............................................................................... 17
The Scope of the Theory and Its Potential for Expansion .......................... 18
2 Stakeholder Theory in Strategic Management ...................................... 21
Representations of the Corporation in Strategic
Management and the Emergence of Stakeholder Theory (1980–1990)...... 22
Between 1950 and 1968, an Economistic Approach
to the Corporation .................................................................................. 23
1968 and 1985: Strategic Representations of the Corporation ............... 23
1985 and 1995: A Financial Vision Combined with
Multi- Criteria Performance and a Conception Offering
an Alternative to Financial Orthodoxy ................................................... 23
Since 1995: A Multitude of Different Perspectives ................................ 23
The Role of Stakeholder Theory in Corporate Strategy.............................. 25
The Corporation Between Dependence on the Environment
and Policy Self-Determination ............................................................... 25
Stakeholder Theory: Promoting Strategic Management,
1970–1980 .............................................................................................. 26

A Pluralist Representation of the Corporation
and of the Organization: Toward Partnership-Based
Corporate Governance ............................................................................ 28
Strategic Models Which Are Not Congruent with
Stakeholder Theory: Michael Porter ........................................................... 31
Michael Porter’s Competitive Advantage ............................................... 31
Richard D’Aveni’s Hyper-Competition Model (1994–2010) ................ 33
Strategic Models Compatible with Stakeholder Theory ........................ 34
The Corporation as a Political System: The Francophone
School of 1980–2009 ............................................................................. 34
Resource and Skills-Based Strategy ....................................................... 36
The Relational View ............................................................................... 37
Impact of Stakeholder Theory on Strategic Marketing
and Research in Negotiation ....................................................................... 37
Conclusion .................................................................................................. 38
3 Stakeholder Theory as a Theory of Organizations ................................ 41
Stakeholder Theory, a Factor of Change in Organization Theory .............. 42
From Structure to Its Fragmentation: The Internationalization
of Organizations and of Inter- organizational Relations .............................. 44
The Increasing Internationalized of Firms: From Very
Large Companies to Companies That Are Born Global ........................ 44
International Regulatory Organizations with a Global Vocation............ 45
Public Organizations Undergoing Profound Changes ........................... 46
Organization Theory and Stakeholder Theory ............................................ 47
The Organization as Relation and as Organized But
Unexpected Action ................................................................................. 48
Organized Action as Sensemaking ......................................................... 49
Other Currents Relevant to Stakeholder Theory ......................................... 49
The Neo-Institutionalist Current ............................................................ 49
Political Approaches............................................................................... 50
Conclusion .................................................................................................. 51
4 Political Philosophy
Interpellated by Stakeholder Theory ................... 53

Conflict Between Institutions and Organizations........................................ 54
From Civil Society to Stakeholder Society? ............................................... 54
The Hegelian Theory of Civil Society ................................................... 55
Three Factors of Correspondence Between Civil Society
and Stakeholder Society ......................................................................... 56
Stakeholder Theory and the Social Contract ............................................... 59
A Non-social Contract: The Firm as a Network of Contracts ................ 60
Stakeholder Theory’s Social Contract: An Alternative
to the Theory of the Firm ....................................................................... 61
The Social Contract: From Rhetoric to Reality...................................... 63
The Relevance of the Social Contract to Stakeholder Theory ............... 64
Conclusion .................................................................................................. 65

5 Stakeholder Theory and Ethics ............................................................... 67
Ethics: Justice, Equality and Fairness ......................................................... 67
From the Ethics of Discussion to Deliberative Rationality ......................... 69
The Paradox of Stakeholders in Business Ethics ........................................ 69
Stakeholder Theory and the Common Good: Contrasting Conceptions ..... 71
Equity and Justice as Management Principles: Robert Phillips
and John Rawls ........................................................................................... 72
Deconstruction of the Paradigm of Justice and Ethics ................................ 77
Conclusion .................................................................................................. 78
General Conclusion ......................................................................................... 79
Bibliography .................................................................................................... 83

 

 

 

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