Abstract
The purpose of this chapter is to examine how business sustainability is considered and legitimated in stakeholder value creation studies. Based on a review of stakeholder value creation literature, a stakeholder value creation typology is presented. The typology consists of four categories, which are (1) focal firm orientation with economic value perspective, (2) stakeholder orientation with economic value perspective, (3) focal firm orientation with multiple value perspective, and (4) stakeholder orientation with multiple value perspective. Each category tells a somewhat different story of what the purpose of business is, who are the important stakeholders, what role does sustainability play in business, and how business sustainability is legitimated. A closer analysis reveals that the category of stakeholder orientation with a multiple value perspective shows the most potential to build the legitimacy of business sustainability on the profound meaning of sustainability with economic, social, and environmental dimensions. In this category, business sustainability is legitimized in terms of cooperative stakeholder relationships, continual negotiations, and collective efforts, where versatile value is created for various stakeholders, including values related to sustainability. The recommendations for future research draw attention to versatile and broad understanding of value, stakeholders, and value creation and dynamic, systemic, and multilevel stakeholder relationships and collaboration as subjects to understand the legitimation of business sustainability.
This is a preview of subscription content, log in via an institution.
References
Banerjee SB (2000) Whose land is it anyway? National interest, indigenous stakeholders, and colonial discourses. The case of the Jabiluka uranium mine. Organ Environ 13(1):3–38
Bansal P (2005) Evolving sustainably: a longitudinal study of corporate sustainable development. Strateg Manag J 26(3):197–218
Berman SL, Wicks AC, Kotha S, Jones TM (1999) Does stakeholder orientation matter? The relationship between stakeholder management models and firm financial performance. Acad Manag J 42(5):488–506
Bosse DA, Phillips RA, Harrison JS (2009) Stakeholders, reciprocity, and firm performance. Strateg Manag J 30(4):447–456
Bundy J, Shropshire C, Buchholtz AK (2013) Strategic cognition and issue salience: toward an explanation of firm responsiveness to stakeholder concerns. Acad Manag Rev 38(3):352–376
Choi J, Wang H (2009) Stakeholder relations and the persistence of corporate financial performance. Strateg Manag J 30(8):895–907
Clifton D, Amran A (2011) The stakeholder approach: a sustainability perspective. J Bus Ethics 98(1):121–136
Coff RW (2010) The coevolution of rent appropriation and capability development. Strateg Manag J 31(7):711–733
Crilly D (2013) Recasting enterprise strategy: towards stakeholder research that matters to general managers. J Manag Stud 50(8):1427–1447
Crilly D, Sloan P (2012) Enterprise logic: explaining corporate attention to stakeholders from the “inside-out”. Strateg Manag J 33(10):1174–1193
Derry R (2012) Reclaiming marginalized stakeholders. J Bus Ethics 111:253–264
Driscoll C, Starik M (2004) The primordial stakeholder: advancing the conceptual consideration of stakeholder status for the natural environment. J Bus Ethics 49(1):55–73
Freeman RE (1984) Strategic management: a stakeholder approach. Pitman, Marshfield
Freeman RE (2000) Business ethics at the millennium. Bus Ethics Q 10(01):169–180
Freeman RE (2010) Managing for stakeholders: trade-offs or value creation. J Bus Ethics 96:7–9
Freeman RE, Martin K, Parmar B (2007) Stakeholder capitalism. J Bus Ethics 74(4):303–314
Gallo PJ, Christensen LJ (2011) Firm size matters: an empirical investigation of organizational size and ownership on sustainability-related behaviors. Bus Soc 50(2):315–349
Garcia-Castro R, Aguilera RV (2015) Incremental value creation and appropriation in a world with multiple stakeholders. Strateg Manag J 36(1):137–147
Garcia-Castro R, Francoeur C (2016) When more is not better: complementarities, costs and contingencies in stakeholder management. Strateg Manag J 37(2):406–424
Garriga E (2014) Beyond stakeholder utility function: stakeholder capability in the value creation process. J Bus Ethics 120(4):489–507
Gladwin TN, Kennelly JJ, Krause TS (1995) Shifting paradigms for sustainable development: implications for management theory and research. Acad Manag Rev 20(4):874–907
Hahn T, Kolk A, Winn M (2010) A new future for business? Rethinking management theory and business strategy. Bus Soc 49(3):385–401
Hahn T, Preuss L, Pinkse J, Figge F (2014) Cognitive frames in corporate sustainability: managerial sensemaking with paradoxical and business case frames. Acad Manag Rev 39(4):463–487
Haksever C, Chaganti R, Cook RG (2004) A model of value creation: strategic view. J Bus Ethics 49(3):295–307
Harrison JS, Wicks AC (2013) Stakeholder theory, value, and firm performance. Bus Ethics Q 23(1):97–124
Harrison JS, Bosse DA, Phillips RA (2010) Managing for stakeholders, stakeholder utility function, and competitive advantage. Strateg Manag J 31(1):58–74
Henisz WJ, Dorobantu S, Nartey LJ (2014) Spinning gold: the financial returns to stakeholder engagement. Strateg Manag J 35(12):1727–1748
Hillman AJ, Keim GD (2001) Shareholder value, stakeholder management, and social issues: what’s the bottom line? Strateg Manag J 22(2):125–139
Hörisch J, Freeman RE, Schaltegger S (2014) Applying stakeholder theory in sustainability management: links, similarities, dissimilarities, and a conceptual framework. Organ Environ 27(4):328–346
Jawahar M, McLaughlin GL (2001) Toward a descriptive stakeholder theory: an organizational life cycle approach. Acad Manag Rev 26(3):397–414
Jensen MC (2002) Value maximization, stakeholder theory, and the corporate objective function. Bus Ethics Q 12(02):235–256
Jones TM (1995) Instrumental stakeholder theory: a synthesis of ethics and economics. Acad Manag Rev 20(2):404–437
Jones TM, Felps W (2013) Stakeholder happiness enhancement: a neo-utilitarian objective for the modern corporation. Bus Ethics Q 23(03):349–379
Jones TM, Wicks AC (1999) Convergent stakeholder theory. Acad Manag Rev 24(2):206–221
Korschun D (2015) Boundary-spanning employees and relationships with external stakeholders: a social identity approach. Acad Manag Rev 40(4):611–629
Marcus J, Kurucz EC, Colbert BA (2010) Conceptions of the business–society–nature interface: implications for management scholarship. Bus Soc 49(3):402–438
Mitchell RK, Agle BR, Wood DJ (1997) Toward a theory of stakeholder identification and salience: defining the principle of who and what really counts. Acad Manag Rev 22(4):853–886
Myllykangas P, Kujala J, Lehtimäki H (2011) Analyzing the essence of stakeholder relationships: what do we need in addition to power, legitimacy, and urgency? J Bus Ethics 96:65–72
O’Riordan L, Fairbrass J (2014) Managing CSR stakeholder engagement: a new conceptual framework. J Bus Ethics 125(1):121–145
Ogden S, Watson R (1999) Corporate performance and stakeholder management: balancing shareholder and customer interests in the UK privatized water industry. Acad Manag J 42(5):526–538
Pinkse J, Kolk A (2012) Addressing the climate change sustainable development nexus: the role of multistakeholder partnerships. Bus Soc 51(1):176–210
Pirson M, Malhotra D (2011) Foundations of organizational trust: what matters to different stakeholders? Organ Sci 22(4):1087–1104
Preston LE, Donaldson T (1999) Dialogue. Acad Manag Rev 24(4):619–620
Rowley TJ (1997) Moving beyond dyadic ties: a network theory of stakeholder influences. Acad Manag Rev 22(4):887–910
Sachs S, Maurer M (2009) Toward dynamic corporate stakeholder responsibility. J Bus Ethics 85(3):535–544
Schaltegger S, Hansen EG, Lüdeke-Freund F (2016) Business models for sustainability origins, present research, and future avenues. Organ Environ 29(1):3–10
Schneider M (2002) A stakeholder model of organizational leadership. Organ Sci 13(2):209–220
Sharma S, Henriques I (2005) Stakeholder influences on sustainability practices in the Canadian forest products industry. Strateg Manag J 26(2):159–180
Shrivastava P (1995) Ecocentric management for a risk society. Acad Manag Rev 20(1):118–137
Starik M, Kanashiro P (2013) Toward theory of sustainability management: uncovering and integrating the nearly obvious. Organ Environ 26(1):7–30
Steurer R, Langer ME, Konrad A, Martinuzzi A (2005) Corporations, stakeholders and sustainable development I: a theoretical exploration of business–society relations. J Bus Ethics 61(3):263–281
Stubbs W, Cocklin C (2008) Conceptualizing a “sustainability business model”. Organ Environ 21(2):103–127
Suchman MC (1995) Managing legitimacy: strategic and institutional approaches. Acad Manag Rev 20(3):571–610
Suddaby R, Bitektine A, Haack P (2017) Legitimacy. Acad Manag Ann 11(1):451–478
Sundaram AK, Inkpen AC (2004) The corporate objective revisited. Organ Sci 15(3):350–363
Tantalo C, Priem RL (2016) Value creation through stakeholder synergy. Strateg Manag J 37(2):314–329
United Nations World Commission on Environment and Development (1987) Our common future. Oxford University Press, Oxford
Wicks AC, Berman SL, Jones TM (1999) The structure of optimal trust: moral and strategic implications. Acad Manag Rev 24(1):99–116
Acknowledgments
This work was supported by the Strategic Research Council at the Academy of Finland as part of the project CICAT 2025, Circular Economy Catalysts: From Innovation to Business Ecosystems (Grant number: 320194/320206).
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Nature Switzerland AG
About this entry
Cite this entry
Tapaninaho, R., Kujala, J. (2019). Stakeholder Value Creation: Legitimating Business Sustainability. In: Rendtorff, J. (eds) Handbook of Business Legitimacy. Springer, Cham. https://doi.org/10.1007/978-3-319-68845-9_31-1
Download citation
DOI: https://doi.org/10.1007/978-3-319-68845-9_31-1
Received:
Accepted:
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-68845-9
Online ISBN: 978-3-319-68845-9
eBook Packages: Springer Reference Religion and PhilosophyReference Module Humanities and Social SciencesReference Module Humanities