CHAPTER 1
THE CORPORATION AND ITS STAKEHOLDERS
INTRODUCTION
Business corporations have complex relationships with many individuals and
organizations in society. The term stakeholder refers to all those that affect, or are affected
by, the actions of the firm. An important part of management’s role is to identify a firm’s
relevant stakeholders and understand the nature of their interests, power, and alliances
with one another. Building positive and mutually beneficial relationships across
organizational boundaries can help enhance a company’s reputation and address critical
social and ethical challenges. In a world of fast-paced globalization, shifting public
expectations and government policies, growing ecological concerns, and new technologies,
managers face the difficult challenge of achieving economic results while simultaneously
creating value for all of their diverse stakeholders.
PREVIEW CASE
Walmart Stores, Inc.
Teaching Tip: Preview Case Video
The Walmart example that opens the chapter illustrates the challenges of
managing successfully in a complex global network of stakeholders. It
may also be used to illustrate how different stakeholders may perceive a
corporation differently, depending on their vantage point. Instructors
that wish to explore this theme more fully may wish to use material from
the several films about the company. “Wal-Mart Nation”
(www.walmartnation.com) takes a highly critical stance. “Why Wal-Mart
Works and Why That Makes Some People Crazy” (available on
www.amazon.com) was made by the company to respond to its critics.
, “Is Wal-Mart Good For America,” a Frontline documentary
(www.pbs.org), tries to take a balanced view.
CHAPTER OUTLINE
I. BUSINESS AND SOCIETY
A. A Systems Perspective
II. THE STAKEHOLDER THEORY OF THE FIRM
, Teaching Tip: Stakeholder Engagement and Dialogue
“The Clayoquot Controversy: A Stakeholder Dialogue Simulation” by Anne
T. Lawrence and Ann Svendsen, is designed to teach the skills of
stakeholder engagement and dialogue. Through an experiential exercise,
students are taught to find common ground when facing complex
conflicts involving business firms and their stakeholders. The particular
situation involves a leading forest products company in Canada,
MacMillan Bloedel. During the 1990s, this company was involved in a
difficult and protracted dispute with several of its stakeholders, including
environmentalists, local communities, native peoples, labor unions, and
government agencies. At issue was the company’s logging practices in
Clayoquot Sound on the western side of Vancouver Island, located off the
coast of British Columbia. At the time, Clayoquot Sound was home to one
of the largest remaining stands of old-growth, temperate rainforest in the
world. The case situation is presented as it appeared to the parties in
1998. The controversy is left deliberately unresolved, and student teams
must engage in a simulated stakeholder dialogue process in an effort to
find common ground. An epilogue in the instructor’s manual provides
information about how the controversy played out in real life. The time
allotted to the exercise may range from two-and-a-half to eight hours. A
full instructor’s manual is available. The case materials are provided on a
PC-compatible CD-ROM, but may also be delivered to students over an
institutional Intranet. For more information or to order a complimentary
examination copy of the CD-ROM, please go to:
www.cim.sfu.ca/clayoquot.
A. The Stakeholder Concept
B. Different Kinds of Stakeholders
, III. STAKEHOLDER ANALYSIS
A. Stakeholder Interests
B. Stakeholder Power
C. Stakeholder Coalitions
D. Stakeholder Salience and Mapping
IV. THE CORPORATION’S BOUNDARY-SPANNING DEPARTMENTS
V. THE DYNAMIC ENVIRONMENT OF BUSINESS
THE CORPORATION AND ITS STAKEHOLDERS
INTRODUCTION
Business corporations have complex relationships with many individuals and
organizations in society. The term stakeholder refers to all those that affect, or are affected
by, the actions of the firm. An important part of management’s role is to identify a firm’s
relevant stakeholders and understand the nature of their interests, power, and alliances
with one another. Building positive and mutually beneficial relationships across
organizational boundaries can help enhance a company’s reputation and address critical
social and ethical challenges. In a world of fast-paced globalization, shifting public
expectations and government policies, growing ecological concerns, and new technologies,
managers face the difficult challenge of achieving economic results while simultaneously
creating value for all of their diverse stakeholders.
PREVIEW CASE
Walmart Stores, Inc.
Teaching Tip: Preview Case Video
The Walmart example that opens the chapter illustrates the challenges of
managing successfully in a complex global network of stakeholders. It
may also be used to illustrate how different stakeholders may perceive a
corporation differently, depending on their vantage point. Instructors
that wish to explore this theme more fully may wish to use material from
the several films about the company. “Wal-Mart Nation”
(www.walmartnation.com) takes a highly critical stance. “Why Wal-Mart
Works and Why That Makes Some People Crazy” (available on
www.amazon.com) was made by the company to respond to its critics.
, “Is Wal-Mart Good For America,” a Frontline documentary
(www.pbs.org), tries to take a balanced view.
CHAPTER OUTLINE
I. BUSINESS AND SOCIETY
A. A Systems Perspective
II. THE STAKEHOLDER THEORY OF THE FIRM
, Teaching Tip: Stakeholder Engagement and Dialogue
“The Clayoquot Controversy: A Stakeholder Dialogue Simulation” by Anne
T. Lawrence and Ann Svendsen, is designed to teach the skills of
stakeholder engagement and dialogue. Through an experiential exercise,
students are taught to find common ground when facing complex
conflicts involving business firms and their stakeholders. The particular
situation involves a leading forest products company in Canada,
MacMillan Bloedel. During the 1990s, this company was involved in a
difficult and protracted dispute with several of its stakeholders, including
environmentalists, local communities, native peoples, labor unions, and
government agencies. At issue was the company’s logging practices in
Clayoquot Sound on the western side of Vancouver Island, located off the
coast of British Columbia. At the time, Clayoquot Sound was home to one
of the largest remaining stands of old-growth, temperate rainforest in the
world. The case situation is presented as it appeared to the parties in
1998. The controversy is left deliberately unresolved, and student teams
must engage in a simulated stakeholder dialogue process in an effort to
find common ground. An epilogue in the instructor’s manual provides
information about how the controversy played out in real life. The time
allotted to the exercise may range from two-and-a-half to eight hours. A
full instructor’s manual is available. The case materials are provided on a
PC-compatible CD-ROM, but may also be delivered to students over an
institutional Intranet. For more information or to order a complimentary
examination copy of the CD-ROM, please go to:
www.cim.sfu.ca/clayoquot.
A. The Stakeholder Concept
B. Different Kinds of Stakeholders
, III. STAKEHOLDER ANALYSIS
A. Stakeholder Interests
B. Stakeholder Power
C. Stakeholder Coalitions
D. Stakeholder Salience and Mapping
IV. THE CORPORATION’S BOUNDARY-SPANNING DEPARTMENTS
V. THE DYNAMIC ENVIRONMENT OF BUSINESS
