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 CASES
Wal-Mart
Teaching Tip: Preview Case Video *
The Wal-Mart 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” (www.hannoverhouse.com) was made
by the company to respond to its critics. “The Age of Wal-Mart:
Inside America’s Most Powerful Company”
(http://www.cnbc.burrelles.com), made for CNBC, tried to take a
balanced view.
* The video segments are from the Public Broadcasting Services’s “News
Hour with Jim Lehrer” and are available on the Instructor’s Resource
Manual DVD that accompanies the textbook, available upon request from
the publisher.
CHAPTER OUTLINE
I. BUSINESS AND SOCIETY
A. A Systems Perspective
,II. THE STAKEHOLDER THEORY OF THE FIRM
A. The Stakeholder Concept
B. Market and Nonmarket Stakeholders
III. STAKEHOLDER ANALYSIS
A. Stakeholder Interests
B. Stakeholder Power
C. Stakeholder Coalitions
D. Stakeholder Salience and Mapping
III. THE CORPORATION’S BOUNDARY-SPANNING DEPARTMENTS
Teaching Tip: Forces Shaping Business-Society Relations
“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:
http://www.cim.sfu.ca/clayoquot.
IV. 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 CASES
Wal-Mart
Teaching Tip: Preview Case Video *
The Wal-Mart 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” (www.hannoverhouse.com) was made
by the company to respond to its critics. “The Age of Wal-Mart:
Inside America’s Most Powerful Company”
(http://www.cnbc.burrelles.com), made for CNBC, tried to take a
balanced view.
* The video segments are from the Public Broadcasting Services’s “News
Hour with Jim Lehrer” and are available on the Instructor’s Resource
Manual DVD that accompanies the textbook, available upon request from
the publisher.
CHAPTER OUTLINE
I. BUSINESS AND SOCIETY
A. A Systems Perspective
,II. THE STAKEHOLDER THEORY OF THE FIRM
A. The Stakeholder Concept
B. Market and Nonmarket Stakeholders
III. STAKEHOLDER ANALYSIS
A. Stakeholder Interests
B. Stakeholder Power
C. Stakeholder Coalitions
D. Stakeholder Salience and Mapping
III. THE CORPORATION’S BOUNDARY-SPANNING DEPARTMENTS
Teaching Tip: Forces Shaping Business-Society Relations
“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:
http://www.cim.sfu.ca/clayoquot.
IV. THE DYNAMIC ENVIRONMENT OF BUSINESS
