Stakeholder Engagement
I Introduction
The world that corporations face today is considerably more complex than they have ever been. Technological advances have rendered operation of corporations considerably more visible than they have ever been, resulting in increased demands for greater corporate transparency and accountability. One response to these shifts by corporations has been to collaborate with stakeholders who represent interests outside of traditional corporate interests. This paper will evaluate the efficacy of stakeholder engagement (SE) as it applies to global corporations. It proposes that potential of SE to maximize business integrity is undermined by elusiveness of the stakeholder concept and problems that flow from it.
II Confusion Surrounding Stakeholder Theorizing and Definitions
A Defining Corporate Citizenship Although many corporations use the corporate citizenship (CC) model to engage with stakeholders, this concept is not easily defined. While some define this concept interchangeably with corporate social responsibility (CSR), others define it in its own right. Simply put, CSR represents the continuing commitment by organizations to promote economic development while improving the quality of life of society. CSR is therefore a way for corporations to increase long-term profits by linking financial goals and social expectations. In contrast, those who make the distinction define CC as a process of managing an organization’s wider influences on society for the benefit of the organization and society. CC is therefore a way for corporation to express its value vis-à-vis society. This section argues that depending on which definition a corporation takes, stakeholders that it chooses to recognize may (not) conflict with the law, which may have implications on the SE process. Before embarking on this argument however, it is necessary to define stakeholder.
B Identifying Relevant Stakeholders Generally, stakeholders include anyone who can affect or be
The world that corporations face today is considerably more complex than they have ever been. Technological advances have rendered operation of corporations considerably more visible than they have ever been, resulting in increased demands for greater corporate transparency and accountability. One response to these shifts by corporations has been to collaborate with stakeholders who represent interests outside of traditional corporate interests. This paper will evaluate the efficacy of stakeholder engagement (SE) as it applies to global corporations. It proposes that potential of SE to maximize business integrity is undermined by elusiveness of the stakeholder concept and problems that flow from it.
II Confusion Surrounding Stakeholder Theorizing and Definitions
A Defining Corporate Citizenship Although many corporations use the corporate citizenship (CC) model to engage with stakeholders, this concept is not easily defined. While some define this concept interchangeably with corporate social responsibility (CSR), others define it in its own right. Simply put, CSR represents the continuing commitment by organizations to promote economic development while improving the quality of life of society. CSR is therefore a way for corporations to increase long-term profits by linking financial goals and social expectations. In contrast, those who make the distinction define CC as a process of managing an organization’s wider influences on society for the benefit of the organization and society. CC is therefore a way for corporation to express its value vis-à-vis society. This section argues that depending on which definition a corporation takes, stakeholders that it chooses to recognize may (not) conflict with the law, which may have implications on the SE process. Before embarking on this argument however, it is necessary to define stakeholder.
B Identifying Relevant Stakeholders Generally, stakeholders include anyone who can affect or be