The salient stakeholders of industrial downsizing: the contribution of boundary object and systemic shock

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Purpose The identification of salient stakeholders remains an issue in stakeholder theory (ST). The articulation of ST with the concepts of boundary object and systemic shock contributes to tackle this point. A boundary object is the “stake” that aggregates a stable network of interdependent actors “holding” interest in it. They compromise to satisfy their interests and collectively reach an equilibrium. Design/methodology/approach In a deductive approach, to illustrate the conceptual framework, empirical evidence is provided by an in-depth case study based on semi-directive interviews and the secondary data (Eisenhardt, 1989; Yin, 2017) of an industrial downsizing that included massive dismissals and involves a multi-stakeholder network. I use a temporal bracketing methodology (Langley et al., 2013) to analyze the dynamic process of interactions between stakeholders. The evolution of interactions is analyzed before the public announcement, during the implementation of the downsizing, and after the closure. The case is Gamma-Alpha (GA), a large German pharmaceutical company, that decided to cut 1250 positions in its Geneva entity and to close the office. Findings This research contributes to the understanding of employment relationships through the lenses of ST. A managerial decision affecting a boundary object involving workers could lead to a systemic shock inducing network change that would require attention from managers in order to successfully implement their decision. It also highlights how and when stakeholders (employees, trade-unions, government, etc.) have more opportunities to influence firm behavior. Originality/value Our main contribution comes from enriching the literature on stakeholder theory with the concepts of boundary object and systemic shock, which results in a crucial conceptual advance: stakeholder saliency is not an intrinsic characteristic but depends on the boundary object that connects the stakeholder’s interests with those of the firm. Moreover, defining a systemic shock affecting the boundary object characterizes the event that triggers interactions between stakeholders and the dynamic evolution of the network.