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When Will Stakeholder Groups Act?
By: Susan Graff and Sally Mason, ERS Global
There are many questions that come to mind when
designing a stakeholder engagement process. A central
uncertainty is predicting when a stakeholder group will
act to influence a company’s business practices. Just
because the group exists does not mean they will
mobilize on a particular issue.
In recent conversation with clients, we’re hearing
increased awareness of the changing nature of risk to
business operations. Today’s risks include issues such
as terrorism, sabotage, human capital, and water
scarcity. High performing companies are updating their
risk profile with accurate intelligence on the magnitude
of these new risks and the likelihood that they will
impact their operations.
The most objective way to assess risk is with input from
stakeholder groups. “Yikes”, some of you might say,
“isn’t that like sleeping with the enemy?” It is true
that stakeholder activism remains a significant topic
behind the closed doors of corporate boardrooms.
However, it is becoming increasingly clear that the
risks from closed door, no disclosure policies are
greater than the risks from engaging key stakeholders,
and significant business opportunities can arise during
the process. As one business manager put it, it is
important to avoid “navel-gazing”.
A central uncertainty in designing a stakeholder
engagement process is predicting when a stakeholder
group will act to influence a company’s business
practices. You would expect that if a group of people
have a common interest that they'll naturally get
together and fight for the common goal. According to
Mancur Olson, the 20th century guru of collective action
theory, this is generally not the case. Just because the
group exists it does not mean they will mobilize on a
particular issue.
Researchers at the University of Toronto recently
explored the question of when groups act, and came up
with a framework for predicting stakeholder group
mobilization based on interests and/or identities. The
researchers examined the “relationships” influence
across stakeholder groups and found the motivation to
act and actually mobilize often stems from groups that
share the same identity. This is an interesting insight,
as a group’s identity is what produces a social reward
for it’s members - for example, getting recognized as
part of a privileged group who is capable of making
change.
For more information:
- When Will Stakeholder Groups Act? An Interest- and
Identity–based Model of Stakeholder Group Mobilization
in the Academy of Management Review, Vol. 28, No. 2,
204-219.
- We also recommend checking out the collective action
theory work of Olson
The Logic of Collective
Action: Public Goods and the Theory of Groups.
Cambridge, MA: Harvard University Press, 1971.
Book Summary
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ERS Global, Inc.
info@ers-global.com |
404.231.5522 | Fax 404.231.5521 | 2320 Virginia Place Suite D | Atlanta,
GA 30305 |
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