Abstract
This article examines the importance of adopting credible stakeholder engagement (SE) as a core management function, with particular reference to Nigerian business organizations. It used content analysis method to specifically examine the role of SE in business organizations; determine the utility of credible SE as a core management function rather than as an add-on; and trace measurable links between SE and business value (profit) with reference to selected multinational companies operating in Nigeria’s Niger Delta region. The article situated its arguments within the Stakeholder Model of Business Value Creation, which it used as a conceptual analytical framework to justify why business organizations in the region should dedicate more attention and resources to quality SE for sustainable profitability. As the findings show, business organizations in the Niger Delta tend to treat SE as an add-on rather than as a core management function. Therefore, given the business value that effective SE adds to an organization, a paradigm shift is required. Business organizations in Nigeria should elevate SE to core management level with the requisite budget to make it fully functional.
Highlights
In today’s competitive global business environment, cooperative relationships with stakeholders enable firms to adapt, share risks and embrace innovation(Leadbeater, 2000)
It objectives are to [1] examine the role of stakeholder engagement (SE) in business organizations; [2] determine the utility of credible SE as a core management function rather than as an add-on; and [3] trace measurable links between SE and business value with reference to selected multinational companies operating in Niger Delta region Nigeria
Focusing on the Niger Delta, we have argued that business organizations in Nigeria, tend to treat SE as an add-on rather than as a core management function
Summary
In today’s competitive global business environment, cooperative relationships with stakeholders enable firms to adapt, share risks and embrace innovation(Leadbeater, 2000). Secondary stakeholders are those who “have indirect influences on an organization or are less directly affected by its activities,” examples of which include “media and pressure groups, and others that inhabit the business and social networks of the organization” (Svendsen et al, 2001) Engaging these groups in a credible manner is increasingly becoming a business asset, rather than an add-on based on legal requirements or even moral obligation. “ stakeholder engagement has moral elements, it is primarily a morally neutral activity”(Greenwood, 2007: 325).This has implications for the relevance of SE to business productivity because unless business organizations see SE as more than moral compulsion, they will be unable to adopt it as a core business strategy to reap the accompanying benefits This requires that they embrace the various interactions that constitute the broader spectrum of stakeholder relations, a lack of which could render an organization unable to respond to the uncertainty that defines the business world (See Figure I). They should “recognize and internalize societal expectations” but “develop the competence to navigate uncertainty, maximize opportunity and engage effectively with external stakeholders on issues and concerns” (Svendsen et al, 2001: 4)
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