Sinziana Dorobantu
NYU Stern School of Business
Stakeholder governance, corporate purpose and societal challenges
To fulfill their purpose, corporate organizations require the participation of various stakeholders that control the access to critical economic, political and social resources. Importantly, these stakeholders are embedded in complex structures of institutions and relationships, which shape how stakeholders interact with corporations and with each other. In the proposed presentation, I will discuss how the broader institutional environment influences both the interactions between firms and their stakeholders (and, thus, the emergence of different models of stakeholder governance in different institutional environments) and the degree to which these interactions contribute to (or undermine) efforts to address societal challenges.
In the first part of this presentation, I will discuss models of stakeholder governance that emerge in different institutional environments. While the importance of stakeholder cooperation has long been emphasized by stakeholder theory (Freeman, 1984; Jones et al., 2018), scholars have only recently shifted their attention to the governance of stakeholder relations (Bacq & Aguilera, 2021; Bridoux & Stoelhorst, 2020; Dorobantu & Odziemkowska, 2017; Klein et al., 2019). The development of a new theory on stakeholder governance is viewed as one of the most pressing challenges for management research (Amis et al., 2020; Klein et al., 2019). I will discuss a proposed theoretical framework on stakeholder governance that explicates the emergence and effectiveness of different stakeholder governance models in different institutional environments. An important component of this framework is a new typology of institutional environments that describes how stakeholder enfranchisement and the networks that facilitate coordination among them vary in different parts of the world. Building on this typology, I emphasize, first, that a firm’s stakeholders (who is in, who is out) vary in different countries and, second, that the interactions between a firm and its stakeholders require different governance structures depending on the broader institutional environment in which these interactions are embedded.
In the second part of the presentation, I will build on the proposed framework to elaborate on how different models of stakeholder governance enhance or undermine efforts to address societal challenges. I contrast two perspectives. In one view, collaborations between firms and stakeholders enhance corporate accountability and create incentives for addressing tough societal challenges by limiting the negative social, environmental and political externalities generated by corporate activities. In a contrasting view, collaborations between firms and stakeholders are a means of capturing the broader institutional environment, thus exacerbating externalities and the associated impacts on society.
References
Amis, J., Barney, J., Mahoney, J. T., & Wang, H. (2020). From the Editors—Why We Need a Theory of Stakeholder Governance—And Why This is a Hard Problem. Academy of Management Review, 45(3), 499–503. https://doi.org/10.5465/amr.2020.0181
Bacq, S., & Aguilera, R. V. (2021). Stakeholder Governance for Responsible Innovation: A Theory of Value Creation, Appropriation, and Distribution (SSRN Scholarly Paper No. ID 3806124). Social Science Research Network. https://doi.org/10.2139/ssrn.3806124
Bridoux, F., & Stoelhorst, J. w. (2020). Stakeholder governance: Solving the collective action problems in joint value creation. Academy of Management Review. https://doi.org/10.5465/amr.2019.0441
Dorobantu, S., & Odziemkowska, K. (2017). Valuing Stakeholder Governance: Property Rights, Community Mobilization, and Firm Value. Strategic Management Journal, 38(13), 2682–2703. https://doi.org/10.1002/smj.2675
Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Cambridge University Press.
Jones, T. M., Harrison, J. S., & Felps, W. (2018). How Applying Instrumental Stakeholder Theory Can Provide Sustainable Competitive Advantage. Academy of Management Review, 43(3), 371–391. https://doi.org/10.5465/amr.2016.0111
Klein, P. G., Mahoney, J. T., McGahan, A. M., & Pitelis, C. N. (2019). Organizational Governance Adaptation: Who Is In, Who Is Out, and Who Gets What. Academy of Management Review, 44(1), 6–27. https://doi.org/10.5465/amr.2014.0459
Bio:
Sinziana Dorobantu is Associate Professor of Management and Organizations at the NYU Stern School of Business. Her research interests span the areas of nonmarket strategy, global strategy, sustainability, and political economy. In her work, she evaluates the strategies through which firms build relationships with different nonmarket stakeholders (governments, local communities, nongovernmental organizations) to gain and maintain support for their operations in different institutional environments. Her research builds on different theoretical traditions and seeks to contribute to our broader understanding of what it takes to obtain and maintain a “social license to operate.”