Boundary Object Aggregating Network of Stakeholders and Systemic Shock: A Case Study of Downsizing

Abstract

Stakeholders forming a network do not constantly interact with each other, and the nature of their interactions may change over time. This relationship led us to develop two research questions. First, why do actors interact to form a stakeholder network? And second, why and how do interactions evolve over time that may call for a corporate political strategy? To address these questions and contribute to stakeholder theory, we mobilize two concepts: boundary objects and systemic shock. The combination suggests that boundary objects aggregate networks of stakeholders that “hold” a “stake” in it. Such networks are usually in an equilibrium of routine interactions between stakeholders that compromise depending on their interests’ satisfaction, power resources and legitimacy. A managerial decision may impact the boundary object and cause a systemic shock that affects stakeholders belonging to the network and disrupts the compromise. The shock induces intense and strong interactions aiming to reach a new compromise (or a new equilibrium) in which actors satisfy their interests depending on their redefined power resources and legitimacy. The path between two equilibria is characterized by a moving alliance of stakeholders with the firm and a coalition against it. Employment is a boundary object that is a “stake” for several “holders”. Industrial downsizing with massive dismissals is a managerial decision that is a systemic shock on a boundary object (i.e., employment) and affects the interest and satisfaction of numerous stakeholders, triggering interactions between them to reach a new equilibrium and redefine the boundary object. To illustrate this conceptual framework, this article is based on empirical evidence from an in-depth case study of industrial downsizing with massive dismissals that took place in Switzerland. The case explores the political processes that characterize relationships when a network of stakeholders is disturbed by a systemic shock.