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4 - Stakeholder Approaches to Corporate Sustainability
- from Part I - Corporate Sustainability: Approaches
- Edited by Andreas Rasche, Copenhagen Business School, Mette Morsing, Principles for Responsible Management Education (PRME), UN GlobalCompact, United Nations, Jeremy Moon, Copenhagen Business School, Arno Kourula, Amsterdam Business School, University of Amsterdam
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- Book:
- Corporate Sustainability
- Published online:
- 09 March 2023
- Print publication:
- 30 March 2023, pp 75-95
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Summary
The ability of business to meaningfully engage with those groups and individuals who it affects, and is affected by – its stakeholders – is a critical component in humanity’s pursuit of net zero, sustainable development for all. This chapter explores and unpacks stakeholder approaches to corporate sustainability and responsible business.
It starts off by framing the big picture of why a stakeholder approach – one that accounts for the interdependencies between business, society and nature – is increasingly pivotal during the uncertain and ambiguous times of the 2020s. Following on, the chapter introduces the core features of a stakeholder approach to corporate sustainability. The third section looks at different stakeholder models. It illustrates stakeholder model development in business settings over time, as well as the influence of the cultural context, such as the one found in the Nordic countries, to foster a stakeholder mindset in business.
The fourth and final section considers stakeholder theory in the age of sustainability, with particular coverage given to the implications of new Information Communication Technologies (ICT) for successful stakeholder engagement strategies.
Weaved in throughout this chapter, and parallel to the online case study, are a number of examples designed to illustrate how a stakeholder approach manifests in the ‘real world’.
Chapter 5 - Managing for Stakeholders in the Digital Age
- from PART I - STRATEGY AND CSR
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- By R. Edward Freeman, University of Virginia, Sergiy Dmytriyev, University of Virginia, Robert G. Strand, University of California-Berkeley
- Edited by Andreas Rasche, Copenhagen Business School, Mette Morsing, Copenhagen Business School, Jeremy Moon, Copenhagen Business School
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- Book:
- Corporate Social Responsibility
- Published online:
- 28 May 2018
- Print publication:
- 23 March 2017, pp 110-135
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Summary
Learning Objectives
• Identify the core principles of stakeholder theory.
• Understand why and how stakeholder theory pioneered and developed in the Scandinavian context.
• Understand company-stakeholder relationships in the age of technology.
• Analyse the Monsanto case study, illustrating the challenges behind managing for stakeholders in the twenty-first century.
Introduction
At the beginning of the 1990s, Jack Smith, the General Motors (GM) CEO, brought Jose Ignacio Lopez, who had previously served as the successful GM head of purchasing in Europe, to purchasing operations at Detroit. The objective was clear: to stop the automaker's losses by cutting costs. Often described as a fanatically dedicated and hard-working manager, Lopez became a GM hero by ripping up long-standing contracts with dedicated suppliers and demanding lower prices. Within his first year in Detroit, Lopez achieved an astounding $1.1 billion of savings in purchasing and identified another $2.4 billion in savings for the next year, which made Jack Smith acknowledge that Lopez had ‘stopped the bleeding’ at GM (Kurylko and Crate, 2006).
Was Lopez successful in his managerial position with the cost-cutting strategy he was using? For those who consider maximising financial returns as the primary objective of any business, it is only logical to answer ‘yes’. The rationality behind this train of thought runs, generally speaking, in the following way: shareholders own the company and their primary objective is to maximise a company's financial returns within legal boundaries; shareholders hire an executive manager to run the company and serve their interests in the best possible way; the hired executive will be rewarded, both financially and career-wise, based on his/her success in serving shareholders’ interests; thus, keeping shareholders happy, within legal boundaries, is the executive's primary responsibility, and the interests of all other parties in the business are secondary.
Lopez was certainly successful in keeping his shareholders happy. However, this GM story does not end happily: Lopez's deeds significantly undermined the level of trust between GM and its long-time suppliers. Over time this strategy of constantly squeezing suppliers turned out to be less productive compared to the trusting long-term relationship built by Japanese car producers. The lesson behind the story is self-evident. Maximising immediate profits at the expense of ruining relationships with a stakeholder holds the company back. Lopez's success was more than dubious.
Economic change after the agricultural revolution in Southeast Asia?
- Charlotte L. King, R. Alexander Bentley, Charles Higham, Nancy Tayles, Una Strand Viðarsdóttir, Robert Layton, Colin G. Macpherson, Geoff Nowell
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Three prehistoric sites in the Upper Mun River Valley of north-eastern Thailand have provided a detailed chronological succession comprising 12 occupation phases. These represent occupation spanning 2300 years, from initial settlement in the Neolithic (seventeenth century BC) through to the Iron Age, ending in the seventh century AD with the foundation of early states. The precise chronology in place in the Upper Mun River Valley makes it possible to examine changes in social organisation, technology, agriculture and demography against a background of climatic change. In this area the evidence for subsistence has been traditionally drawn from the biological remains recovered from occupation and mortuary contexts. This paper presents the results of carbon isotope analysis to identify and explain changes in subsistence over time and between sites, before comparing the results with two sites of the Sakon Nakhon Basin, located 230km to the north-east, to explore the possibility of regional differences.