Normative Stakeholder Research Articles

Unveiling the antecedents and the outcome of materiality disclosure: insights from sustainability reporting of Malaysian public listed companies

PurposeThe materiality principle is one of the top trends in sustainability reporting globally. Stakeholders have focused on the principle of materiality because of its vital importance in the context of sustainability. Materiality serves as a content-selection principle for determining the most significant sustainability matters to be included in sustainability reports. This has made reports more relevant for various stakeholders. Using the resource-based view and stakeholder theory, this paper aims to examine and uncover the antecedents and outcome of materiality disclosure in sustainability reporting.Design/methodology/approachTo measure the extent of materiality disclosure, a content analysis was performed on the corporate reports of the largest listed companies in Malaysia. The relationships among the variables under investigation were examined using the partial least squares structural equation modelling technique.FindingsWhile the results show that board activity, board independence and board size play significant roles as antecedents of materiality disclosure, this is not so with nationality diversity and gender diversity. In addition, the results have shown that the outcome of materiality disclosure is not significantly linked to corporate financial performance. The results show that normative stakeholder considerations are the primary motivating factor behind corporate sustainability reporting in Malaysia.Practical implicationsThese results are of great interest to regulators, stakeholders, investors and companies alike. Enhancing materiality disclosure in sustainability reports can help in the transition to sustainable development and the successful achievement of the United Nations sustainable development goals.Originality/valueTo the best of the authors’ knowledge, this is the first empirical study to examine the interplay between board diversity and materiality disclosure, along with their connections to corporate financial performance.

Cultivating sustainable development in corporate internal matters: Nexus among high‐performance work systems, creativity, and impersonal trust from normative stakeholder theory

AbstractSustainable development is crucial for organizational internal matters since it supports fostering long‐term resilience and efficiency of the organizations. Sustainable development practices enhance resource management, reduce costs, and attract environmentally conscious stakeholders. This study attempts to understand the importance of sustainable development (SD) concerning high‐performance work systems (HPWS), creativity (CRV), and impersonal trust (IT) drawing on the normative perspective of stakeholder theory. First, the study investigates the connection between high work performance and sustainable development within three major levels such as social, economic, and environmental development. Second, this study examines the mediation of creativity among the nexus of HPWS and sustainable development. Finally, the study explores a moderating influence of impersonal trust between HPWS and sustainable development, respectively. Using structural equation modeling (SEM) statistical method employing SmartPls, this study assured the directions among the nexus of HPWS, creativity, impersonal trust, and SD. The study confirmed a positive association between HPWS and sustainable development. Similarly, a mediating sway of creativity and moderation of impersonal trust was observed between the connection of HPWS and sustainable development. This study furnishes insights into creativity that drives innovation, interpersonal skills foster collaboration, and HPWS optimizes efficiency and employee engagement that together optimize the sustainable development of the corporation. Besides, the study discusses certain drawbacks that generate new work prospects for scholars.

Identifying and managing defence and security stakeholders: a systematic literature review, bibliometric analysis and maturity assessment

ABSTRACT This paper’s purpose is to systematically analyse and understand the complexity of strategic-level stakeholder management within defence. Empirical data was collected via a rigorous systematic literature review of 10,369 manuscripts contained within the Web of Science, with 206 A1 studies constituting the final paper set. This was followed by bibliometric and maturity analysis leading to extraction, synthesis and integration of insights. In doing so, knowledge on defence stakeholders is consolidated beyond the traditional field of political science. The results illuminate aspects of stakeholder network complexity, including stakeholders that need to be better understood and holistic frameworks important for contextualising initiatives. Further, the need to move beyond bilaterally-focussed relationships towards the consideration of the larger ecosystem is emphasized. Finally, managers are encouraged to internalise engagement capabilities, able to continuously balance diverse stakeholder cultures and interests. Thereby, contributions are made towards the development of descriptive, instrumental and normative stakeholder theory within defence.

Does second‐generation involvement promote family firm environmental investment? The China experience

AbstractFamily firms not only play an important role in economic growth but should also be held partly responsible for environmental degradation. Employing normative stakeholder theory and analyzing unique Chinese survey data via stepwise regression models, our findings indicate that second‐generation successors did not significantly impact family firms' environmental investment. However, among second‐generation successors, we find that successors with international experience positively impacted environmental investment. The propensity score matching (PSM) and two‐stage least squares estimation (2SLS) approaches confirm our results. As an interdisciplinary study, our research is of great value to the environmental responsibility and family business literature.

Sustainability management accounting – enabling macro-level sustainability transformation towards the United Nations Sustainable Development Goals

Purpose Business has a critical part to play in transforming the global economy and society to achieve sustainable development. Many granular sustainability accounting and management tools have been offered. To systematize these piecemeal developments, this paper aims to develop a framework for analysis of the potential role of sustainability management accounting (SMA). The key challenge addressed is how SMA could be extended to support future-oriented, long-term, pro-active management of multiple issues to contribute towards strong sustainable development at the macro-economy level. Design/methodology/approach This conceptual paper examines SMA within a multi-level, context-action-transformation framework which can move organizations and society towards sustainability. Based on normative stakeholder theory, including concern for mainstreaming marginalized stakeholders, the paper discusses the role of SMA and how it can contribute necessary information to sustainable development of the company and beyond its boundaries. Findings Guided by a SMA framework linking context, action and transformation and normative stakeholder theory, which considers all stakeholders, the paper shows how the present lack of progress towards macro-level sustainable development can be addressed. This requires a focus on measuring and assessing positive impacts and forward-looking, long-term and proactive management of multiple sustainability issues as typified by the Sustainable Development Goals (SDGs). Practical implications The paper distinguishes between two aspects of SMA – a focus on reducing unsustainability and a focus on transformations towards sustainability. It is observed that there is insufficient emphasis on the latter at present if SMA is to provide comprehensive support to achieving the SDGs. A set of supportive tools is presented as a guide to practice and future developments. Originality/value The paper considers how SMA can enable and support transformations towards sustainability at the macro- and meso-level. Different transformational challenges and opportunities are discussed. In particular, the need to balance consideration of time, proactivity and multiplicity, as highlighted in the SDGs, is identified as the central way forward for SMA.

Society 5.0 versus Industry 5.0: An examination of industrialization models in driving sustainable development from a normative stakeholder theory perspective

AbstractThe research on Society 5.0 (s5.0) and Industry 5.0 (i5.0) is a relatively new and emerging domain where researchers are still striving to explore the influence within distinct contexts, worldwide. The study investigates the impact of two major models of industrialization, that is, s5.0 and i5.0 to understand the insights into how it triggers the firms' sustainable development by showing empirical examinations from the Chinese industrial sector drawing on normative stakeholder theory perspective. The results asserted that the i5.0 model positively affects sustainable performance (SSP). The empirical analysis confirmed a positive association of s5.0 model toward SSP. In addition, it found that s5.0 and i5.0 models have a positive correlation with the economic perspective of SSP. Second, the findings asserted the positive linkage between i5.0 and s5.0 from a social perspective. Finally, the study found a significant correlation between i5.0 and s5.0 on the environmental factors, respectively. This study equipped both frameworks to empirically conduct the contextual examination showing insights into the embodiment of such capabilities that may support achieving SSP. This study shows insights into certain policy implications. For instance, i5.0 and s5.0 both models support shaping innovative ecosystems, encouraging ethical and sustainable practices, encouraging effective infrastructure, empowering citizen participation, and supporting work for the betterment of society. Finally, the study enlists certain managerial and theoretical recommendations for the industries together with possibilities of future research for scholars of the world.

Strengthening climate adaptation in the northern region of Ghana: insights from a stakeholder analysis

ABSTRACT Climate change significantly impacts agriculture. Building an informed and collaborative process among stakeholders remains vital in minimizing climate risks and building climate-adaptive and resilient agricultural systems in sub-Saharan Africa (SSA). However, stakeholders’ involvement and collaboration in agriculture decision-making are framed by institutional, power, and resource dynamics, often ignoring vulnerable stakeholders most susceptible to climate shocks. These collaborative dynamics are less studied in the climate adaptation literature, especially in the context of Ghana and SSA. This study promotes stakeholder engagement and collaboration in climate-adaptive and conservation agriculture (CA) by examining the influence of and relationship dynamics among key stakeholders in the northern region of Ghana (NRG). Drawing from the normative stakeholder theory and literature on climate adaptation intervention, we use multiple qualitative research methods (e.g. brainstorming, semi-structured interviews, and focus group sessions) to profile and explore stakeholders’ roles, interests, and collaboration in CA and adaptation interventions. Our findings suggest that collaborations in CA in these smallholder farming communities are often fragmented, providing few collaboration advantages to smallholder farmers. Where collaboration occurs, it is often characterized by redundancy or duplication of roles and functions performed by stakeholders, poor coordination among key government actors, or by conflictual relationships among non-governmental organizations (NGOs); relationships amongst stakeholders are often driven by conflicting interests and asymmetric power differentials. These findings suggest that measures to engage stakeholders must carefully consider aligning stakeholders’ interests and addressing power differentials, which are necessary to minimize conflicts in collaborative governance arrangements for adaptation and CA. Key policy insights Conservation agriculture (CA) creates resilient agricultural systems for enhanced food security and poverty alleviation. Stakeholder roles, interests, and collaborations should be identified to understand who should be included to establish a collaborative connection for adaptation planning. Policymakers should actively engage stakeholders, including smallholder farmers, in the design and implementation of climate adaptation planning and interventions. As the principal resource for adaptation planning and decision-making is the people themselves, engaging them will leverage their knowledge, experiences, and expertise for the design of effective adaptation policies and ensure effective implementation. Collaborative action involving stakeholders can promote effective action on climate change by fostering consensus and building local ability and expertise to collectively adopt adaptation measures.

Public value is in the eye of the beholder: stakeholder theory and ingroup bias

IMPACT This research evidence that ‘public value is in the eye of the beholder’, i.e. ingroup bias and the relationship of the individual as a normative stakeholder can both affect the public value perception of an institution. This finding is useful for practitioners and policy-makers seeking to carry out performance management of public, religious, or nonprofit organizations from a public value perspective. Ingroup bias may be a particularly important issue for public management in settings where political polarization is escalating.

A case‐study approach to mapping Corporate Citizenship

AbstractThis explores what responsible business practice within the context of Malaysia, an Eastern collective society, diverging from the Western individualistic society where most Corporate Social Responsibility (CSR) research originates. A bottom‐up approach was adopted, incorporating different stakeholder perspectives of a case‐study firm, widely acknowledged for its CSR programs. Concept mapping method was selected because it is a structural conceptualization method designed to organize and represent ideas from an identified group adding structure to disorganized and subjective ideas. By using concept mapping all the various perspectives and ideas were brought together to create a single conceptualization. The findings from the concept mapping present 101 statements which produced seven clusters; Products & Services, Community Oriented, Stakeholder & Business Value, Employee Oriented, Legal & Ethical Responsibilities, Environmental & Social Oriented, and Philanthropic Oriented. These clusters covered the whole conceptual domain of Corporate Citizenship and demonstrated multiple CSR theories, including corporate sustainability, stakeholder concept, and shared value, were apparent, while also uncovering some unique aspects from the normative stakeholder perspective. The implications of this study suggest that while some aspects of globally institutionalized CSR are generically accepted, there are contextually specific aspects which need to be considered as these may contradict or conflict with the “global” standards.

Harmonizing Moral Obligations to Stakeholders & Fiduciary Duties to Shareholders: A Consent Approach

The paper elaborates a model designed to aid managerial decision making in light of conflicting normative stakeholder imperatives. Within the discussion the model assumes that managers can face true dilemmas where valid competing normative claims exist and that shareholders are owed fiduciary duties that often create such conflicts. To resolve these conflict situations, the model advocates that managers make the maximization of created value the objective function of the firm. It also provides that they commit to a value statement that defines the types of value they will create, how they will go about this process, and how they will allocate this value across stakeholder groups. Shareholder consent to this express value statement enables managers to simultaneously meet their fiduciary duties to shareholders and fulfill their broader obligations to stakeholders through a fair and transparent process of conflict resolution.

Water disclosure in the agriculture industry: Does stakeholder influence matter?

This study presents an analysis of stakeholder influence on water-related disclosure in the most water-sensitive industry, namely, agriculture. The availability of clean water is currently under pressure, and stakeholders are starting to pay attention to a company's water responsibilities. The influence of stakeholders is analyzed using the lens of ethical or normative stakeholder theory. The sample includes 195 agriculture companies registered in the OSIRIS database from 2017-2019. The data were collected from the database, company reports, and other company official media on the internet. Following the Hausman test procedure, the data were analyzed using random effect model. Governments, foreign shareholders, and international operations were found to be significant drivers of water disclosure practices. However, the creditor power hypothesis was rejected, as it had an insignificant influence. This paper contributes to the literature by providing empirical evidence of stakeholder influence on water disclosure in the agriculture industry, which has not been previously investigated.

The Impact of Instrumental Stakeholder Management on Blockchain Technology Adoption Behavior in Agri-Food Supply Chains

Coffee is the second most important commodity in terms of global trade value, with its global market value exceeding $460 billion in 2020. Its supply networks, which encompass multiple stakeholders, are complex and nontransparent. Blockchain is a trust technology, and some coffee firms have embraced this technology to provide trust attributes to consumers while making their supply chain more transparent. For businesses to gain the expected productivity advantages, a technology must be adopted and used. As theoretical and empirical research on blockchain technology adoption is scarce, this article attempts to identify behavioral intentions of stakeholders in the supply network toward its adoption. Based on exploratory interviews, this article develops a blockchain technology adoption model based on factors relevant to individuals’ use behavior. The results provide evidence that a normative stakeholder management approach positively impacts use behavior. Managers can use the model to benchmark and improve their corporate social responsibility strategy to obtain better returns on blockchain investments. This study closes a research gap as, to the best of the authors’ knowledge, no research has been conducted so far on the impact of an instrumental stakeholder management approach on blockchain technology adoption behavior. Understanding how stakeholder management can compensate for the lack of consensus mechanisms in private and consortium blockchains, as well as understanding the factors influencing behavioral intentions toward the use of a technology, can provide for managerial guidance toward the development of an effective stakeholder management strategy, which eventually can result in a competitive advantage.

How executive turnover influences the quality of corporate social responsibility disclosure? Moderating role of political embeddedness: evidence from China

This study investigated the relationship between executive turnover (ET) and quality of corporate social responsibility disclosure (CSRD) at the firm level. The role of political embeddedness (PE) in the association between ET and CSRD quality in Chinese listed A-share firms is also inspected. We employed 20,850 firm’s/year observations between 2010 and 2016. An inverse relationship was found between ET and CSRD quality as well as PE and CSRD quality. In addition, the study findings disclose that corporate PE moderates the relationship between ET and a firm’s CSRD quality whilst the impact of ET on a company's CSRD quality was found more pronounced for firms with a low level of corporate PE. This examination adds to the literature on CSRD quality under the premise of normative stakeholder theory and leads to the conclusion that the political link of departing executives is an active participant in the exacerbation of CSRD quality in PE firms of China. This implies a reinvigoration of the roles of decision-makers for sustainable CSR assurance.

Child Labour Ethics through the Prism of Utilitarianism and Deontology

Purpose: Grounded in the theoretical concepts of utilitarianism and deontology, this paper aims to evaluate the issue of child labour from an ethics perspective. By linking utilitarianism with normative stakeholder theory, relevant stakeholder groups are being identified in order to examine their influence on and role in the occurrence of child labour allowing for a practical reference. The findings may serve companies in particular as a basis for decision-making in the development of their value chains. Design/Methodology/Approach: The author uses a literature review in order to analyze the findings of existing literature on the topic of child labour in an ethics context, thereby drawing on literature, indexed in Web of Science and Google Scholar by employing forward and backward citation analysis. Findings: The investigation of child labour in terms of ethics yields conflicting results. From a deontological perspective, child labour can never be ethical and should always be rejected as it is not wanted to become a general law. In contrast, according to a utilitarian sentiment, child labour is ethically justifiable as long as the beneficiaries of the labour are greater in number than the children working or suffering. Originality/Value: The examination of child labour from the perspective of deontology and utilitarianism in conjunction with normative stakeholder theory constitutes a novelty in the ethics literature. The integration of theoretical findings into a practical business context provides additional value for managers and global supply chain managers.

The Influence of Managerial Orientation in Decision-Making Processes

This research aims to examine managerial preferences in the resource allocation process. This research used an experimental method to test whether resource availability, stakeholder claims, and managers’ affiliations to stockholders can influence the decision-making process of resource allocation. The results show that resource availability, stakeholder claims, and managers’ affiliation could influence the resource allocation process. The results of the research contribute to several things. The first is to show that stakeholder theory can test managerial preferences at the individual level. Secondly, the resources distribution is influenced by behavioral factors associated with normative stakeholder theory.

Integrating instrumental and normative stakeholder theories: a systems theory approach

PurposeThe stakeholder theory encompasses instrumental and normative varieties whose mutual relationship remains unclear and exhibits a classic tension between rational self-interest and moral motivation. The purpose of this paper is to develop a strategy for navigating this tension.Design/methodology/approachNiklas Luhmann’s social systems theory is concerned with the limited ability of social systems to codify, and be receptive to, the complexity of the environment. Drawing on this theory, the paper juxtaposes the codification problems of two types of social systems: the for-profit firm and the economic function system.FindingsThis juxtaposition allows to identify four firm behavior patterns, two of which can be aligned with instrumental and normative stakeholder theories. If the codification capacity of the economic function system is assumed to be sufficient, the codification problems of the for-profit firm are shown to specify the range of applicability of the instrumental stakeholder theory. Dropping the above assumption is shown to specify the range of applicability of the normative stakeholder theory.Originality/valueThe argument offers a fresh way of understanding the institutional economics foundations of the stakeholder theory. Given that the systems-theoretic idea of codification reflects the functioning of the real-world institutions, the argument shows that both instrumental and normative stakeholder theories reflect the institutional texture of the modern society in distinct but equally legitimate ways.

Earning a social license to operate in mining: A case study from Peru

There are three different types of stakeholder theory, namely, descriptive, instrumental and normative.However, there is little research on how these three stakeholder theories are related. The purpose of this paper is to understand how the above three theories are interrelated and how companies can use them to earn the social license to operate (SLO) in mining projects. Additionally, this paper presents a comparative case study analysis of three mining operations in Peru. This analysis is qualitative in nature and is complemented with insights from key informant interviews (n = 22), the emerging literature on SLO and stakeholder theories. The findings show that a mining project that starts with the normative stakeholder theory and then moves on to the instrumental stakeholder and descriptive stakeholder theories would operate with SLO. On the other hand, companies that start with the descriptive stakeholder theory would operate without SLO. The challenge for mining companies to obtain the SLO, as found by some previous studies, remains.

How Do the Normativity of Headquarters and the Knowledge Autonomy of Subsidiaries Co-Evolve? Capability-Upgrading Processes of Chinese Subsidiaries in Belgium

To successfully compete with advanced market multinationals (AMNEs), emerging market multinationals (EMNEs) have to access higher innovation capabilities from their autonomously operating advanced economy subsidiaries. There are two competing schools of thought on how EMNE subsidiaries obtain capability-upgrading autonomy from their headquarters. The first school of thought embraces a knowledge-based, boundedly rational perspective on headquarters’ delegation of capability-upgrading autonomy. The second argues that normative stakeholder priorities pervade headquarters’ capability-upgrading logic, with a “headquarters knows best logic” standing in the way of knowledge-based subsidiary autonomy. This paper adopts a process perspective to understand how EMNE headquarters’ logics and subsidiaries’ mandate for capability-upgrading co-evolve over time. Drawing on the case of Chinese multinational subsidiaries (CMNEs) in Belgium we find that subsidiary managers’ ability to challenge normative expectations is a condition to headquarters acting in a knowledge-based manner. We contribute to the literature on EMNE capability-upgrading by developing several propositions on how autonomy negotiation processes between headquarters and subsidiary evolve over time; depending on the historical imprinting of home success values, the socialisation in how to respond to failure and the emergence of constructive conflict.

Safe Home, Inc. - A Case Exercise in Business Ethics

The paper presents an experiential exercise in which students, both individually and in teams, evaluate a cost-saving proposal to close two domestic assembly facilities and open a maquiladora facility in Mexico. Students are presented with strong statements in support of and against the proposal from a number of varied stakeholders and asked to make a decision on the proposal. Subsequent to this decision, students are asked to reconsider their decision in light of some potential personal consequences this decision might have for them and their family. The exercise facilitates a discussion of stakeholder analysis from the perspective of normative stakeholder theory as well as how ethical decisions might be affected by personal considerations.

Substantive or Symbolic Environmental Strategies? Effects of External and Internal Normative Stakeholder Pressures

AbstractDifferent forms of stakeholder pressures drive different environmental strategies in organizations. This article differentiates between internal and external normative stakeholder pressures to test their potentially unique effects on environmental strategies. The findings suggest that internal, normative stakeholder pressures primarily drive substantive commitments to environmental practices, reflecting an internalized, voluntary commitment to the natural environment and dedication to environmental leadership by the firm. External, normative pressures instead primarily drive symbolic commitments to environmental practices, aimed at managing the image of the organization to establish and reinforce an appearance of commitment to the natural environment. This novel perspective accounts for the institutionally plural contexts of organizations and their environments, in which internal pressures directly drive substantive environmental commitments and external pressures drive symbolic responses. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment