Abstract
This chapter applies the research findings to update the earlier management framework versions presented in the previous chapters. The resulting new Stakeholder Relationship Management Framework (Version 4) is the main conceptual contribution of the book. It proposes four strategy formulation steps portraying the components of a management ‘pathway’ for those who seek responsible choices in their everyday corporate decision-making activities. In identifying, defining, and explaining a holistic, inclusive, integrated corporate approach to stakeholder relationship management, the framework is designed to serve as a comprehensive but practical tool to guide the organisational value creation process. Ultimately, by focusing on the value-producing potential inherent in the stakeholder connections, it depicts the transformation route to an innovative business model.
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Notes
- 1.
Please refer to Chap. 6 for further details regarding the data collection process.
- 2.
- 3.
See, for example, Economics for Humans (Nelson, 2006).
- 4.
The ‘existing business model ’ is assumed to be primarily internally focused on a narrow shareholder value-creation logic based on an exclusive profit maximisation rationale aimed at increasing sales and decreasing costs.
- 5.
The resulting ‘innovative business model ’ is assumed to be holistically focused on broader stakeholder value optimisation via the maximisation of multiple individual stakeholder interests. By definition, this approach includes the maximisation of shareholder, as well as other stakeholder interests.
- 6.
Please refer to the ‘connections of fortune’ scenario below for further details.
- 7.
For clarification, stakeholder management can occur in a variety of formal and informal ways. As previously explained in Chap. 2, it can, for instance, include stakeholder engagement, such as one-to-one interactions, or through formal channels, such as client service assessments, internal and external surveys, via social media , hosting events on topical issues, participating in advisory and advocacy groups, as well as via other forums and methods.
- 8.
This PPPP framework, similar to the TBL or TTL approach, is complicated by factor distinction challenges relating to the practical issue that the SVC impact cannot typically be isolated to specific groups. Nor is it always possible to know in advance the precise expected impact resulting from the activity. The approach is therefore limited in the sense that it is neither mutually exclusive nor collectively exhaustive. Nevertheless, it is presented here because many organisations (e.g. Unilever ) typically employ such distinctions when considering the holistic impact of the value they create (Workshop Nijmegen, 2016). Others, such as Novo Nordisk , similarly leverage their resources by working in partnerships to contribute to specific sustainable development goals such as to reduce child mortality, for example (Novo Nordisk, 2016a).
- 9.
In place of a ‘tragedy of the commons ’ scenario, the ‘connections of fortune’ scenario emphasises the well-being and prosperity which could be achieved when every individual continues to strive to reap the greatest self-benefit from a given resource but, in doing so, is concurrently aware and informed about, as well as concerned for, the collective consequence of their actions on the common good of all users. Acting collectively according to the overall interest of the group determines that through their combined actions, individual users multiply the available resources and outcomes for each party via novel solutions. This addresses the sustainability dilemma by helping to ensure that the demand for resources that are essential to the group does not overwhelm the supply. In this approach, each individual is aware of the opportunity cost of the impact of their chosen actions on other stakeholders and can choose to alter his or her behaviour accordingly.
- 10.
For clarification, in cases where the strategic planning comprises a new venture, clearly no business model exists and the planning commences with a ‘clean slate’.
- 11.
This depiction is intended to serve as one potential example of SVC. In practice, each organisation establishes its own particular context-specific relevant relationships and connectors. See above for further details.
- 12.
As noted above, better tools are required to establish improved evaluation transparency with respect to key issues, including for example factor distinction between social, environmental, and economic or other factors (e.g. people /prosperity /planet /profit); debates regarding whether social value can be monetarised; and the appropriate employment of quantitative/qualitative indicators.
- 13.
For further details, please refer to the ‘misconceptions and misunderstandings’ section in Chap. 2.
- 14.
In the circle and boxes illustration in Fig. 9.2, this aspect is graphically depicted via the box boundary, which defines the chosen organisational scope.
- 15.
This new form of competitive advantage is the result of the transformed corporate approach focused on stakeholder relationship management in place of exclusive (shareholder) profit maximisation as was the case in the conventional business model approach. This transformed approach establishes the fundamental mechanism for business model innovation . In pursuit of responsible profits , the resulting competitive advantage strategy can potentially adopt a range of styles, including collaborative, cooperative, or other more or less competitive forms. As a result, some authors label this organisational transformational approach ‘collaborative advantage ’ instead of ‘competitive advantage ’ (e.g. Jonker, O’Riordan, & Marsh, 2015; Jonker & O'Riordan, 2016). The term ‘competitive advantage ’ is employed here to signify the broader range of competitive possibilities.
- 16.
This includes the requirement to develop new perspectives and evaluation tools to appraise, for example, cultural and other macro-level or industry-specific factors, in addition to the organisation- and individual-level focus addressed here.
- 17.
For clarification, given the fact that the profit motive is not their purpose because they focus on SVC as their organisational purpose , non-profit organisations and other socially driven organisations (with an altruistic purpose for example) would by definition be situated in the lower right corner in Fig. 9.3.
- 18.
- 19.
For clarification, part of the novelty of these value outcomes derives from the scope of the value proposition, which could be interpreted via a number of premises, such as TBL (Elkington, 1997) or TTL (McDonough & Braungart, 2002) principles, which are generally understood as the fundamental source for sustainable business practice (see, e.g., Jonker, Stark, and Tewes, 2011, p. 9). However, further interpretations can be developed to suit the context-specific requirements of each organisational setting. For illustration purposes, the scope for adaptation is inherently implied in the people /prosperity /planet /profits illustration depicted in Fig. 9.2 and inherent in the strategic contribution phase in Fig. 9.1.
- 20.
Semantic issues (based on the rationale that there is nothing as ‘old’ as a ‘new’ approach) associated with the word ‘new’ in depicting a concept, which by definition undoubtedly ages over time, determine that the term ‘new business model’ (NBM) has not been employed in this work. Instead, the label ‘innovative business model ’ has been chosen as a more apt term, which nevertheless signifies many of the concepts inherent in the NBM logic.
- 21.
This broadened value can include different classifications of value, such as those suggested by Argadona (2011) including extrinsic tangible or intangible economic value created via collaboration, psychological intrinsic value of work satisfaction, learning at individual and organisational level, and value consisting of positive or negative externalities as a consequence of the relationship.
- 22.
From the many possible alternatives, for brevity purposes, the term ‘CR’ has been adopted in this chapter to signify the concept of responsible management (as defined in Chap. 2) within a corporate sustainable stakeholder relationship setting.
- 23.
As well as other instruments including those mentioned in previous sections of this chapter.
- 24.
The potential of this process to create the noted impact is dependent on improved management tools for evaluating outcomes and new measurement indicators facilitating the generation and availability of reliable, accessible, user-friendly, actionable data. The current lack of such tools for assessing both the qualitative and quantitative, hard and soft, criteria capable of considering the dynamics of volatility, uncertainty, complexity, and ambiguity was noted as a missing link issue, which was presented in the previous chapters of the book.
- 25.
This highlights the salience of the connections and alliance opportunities between the parties in the stakeholder network.
- 26.
When contemplating how to best link the business interests with positive societal change, the 17 sustainable development goals stated in the UN 2030 Agenda for Sustainable Development (UN SDG) can serve as a valuable indicator for business strategists. These indicate areas including issues such as pollution, human rights and poverty reduction, employment conditions and diversity, supplier conditions and ‘fair trade’, consumer use and marketing of products and services, community, infrastructure and education, etc., which could highlight interesting avenues in the pursuit of business opportunities to improve social conditions in both the developed and the developing world (Sustainable Development Goals, 2016).
- 27.
Notwithstanding the measurement issues noted previously with a TBL/TTL or PPPP approach due to the lack of clear isolation of the inherent variables, these principles have been adopted here to pragmatically reflect real-world operating practice as in the example of Unilever ’s corporate approach (Workshop Nijmegen, 2016).
- 28.
Please refer to Chap. 5 for further details.
- 29.
This approach acknowledges the measurement issues noted previously with the TBL/TTL and PPPP impact areas due to the lack of clear isolation of the inherent variables. Nevertheless, these principles have been adopted here in a pragmatic approach, based on the rationale that many companies adopt these categorisations in everyday practice, e.g. Unilever (Workshop Nijmegen, 2016).
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O’Riordan, L. (2017). Conceptualising Stakeholder Relationship Management. In: Managing Sustainable Stakeholder Relationships. CSR, Sustainability, Ethics & Governance. Springer, Cham. https://doi.org/10.1007/978-3-319-50240-3_9
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