Tapping the innovation potential of corporate engagement with stakeholders

Summary This dissertation explores how stakeholder dialogue influences corporate processes, and speculates about the potential of this phenomenon - particularly with actors, like non-governmental organizations (NGOs) and other representatives of civil society, which have received growing attention against a backdrop of increasing globalisation and which have often been cast in an adversarial light by firms - as a source of teaming and a spark for innovation in the firm. The study is set within the context of the introduction of genetically-modified organisms (GMOs) in Europe. Its significance lies in the fact that scientific developments and new technologies are being generated at an unprecedented rate in an era where civil society is becoming more informed, more reflexive, and more active in facilitating or blocking such new developments, which could have the potential to trigger widespread changes in economies, attitudes, and lifestyles, and address global problems like poverty, hunger, climate change, and environmental degradation. In the 1990s, companies using biotechnology to develop and offer novel products began to experience increasing pressure from civil society to disclose information about the risks associated with the use of biotechnology and GMOs, in particular. Although no harmful effects for humans or the environment have been factually demonstrated even to date (2008), this technology remains highly-contested and its introduction in Europe catalysed major companies to invest significant financial and human resources in stakeholder dialogue. A relatively new phenomenon at the time, with little theoretical backing, dialogue was seen to reflect a move towards greater engagement with stakeholders, commonly defined as those "individuals or groups with which. business interacts who have a 'stake', or vested interest in the firm" (Carroll, 1993:22) with whom firms are seen to be inextricably embedded (Andriof & Waddock, 2002). Regarding the organisation of this dissertation, Chapter 1 (Introduction) describes the context of the study, elaborates its significance for academics and business practitioners as an empirical work embedded in a sector at the heart of the debate on corporate social responsibility (CSR). Chapter 2 (Literature Review) traces the roots and evolution of CSR, drawing on Stakeholder Theory, Institutional Theory, Resource Dependence Theory, and Organisational Learning to establish what has already been developed in the literature regarding the stakeholder concept, motivations for engagement with stakeholders, the corporate response to external constituencies, and outcomes for the firm in terms of organisational learning and change. I used this review of the literature to guide my inquiry and to develop the key constructs through which I viewed the empirical data that was gathered. In this respect, concepts related to how the firm views itself (as a victim, follower, leader), how stakeholders are viewed (as a source of pressure and/or threat; as an asset: current and future), corporate responses (in the form of buffering, bridging, boundary redefinition), and types of organisational teaming (single-loop, double-loop, triple-loop) and change (first order, second order, third order) were particularly important in building the key constructs of the conceptual model that emerged from the analysis of the data. Chapter 3 (Methodology) describes the methodology that was used to conduct the study, affirms the appropriateness of the case study method in addressing the research question, and describes the procedures for collecting and analysing the data. Data collection took place in two phases -extending from August 1999 to October 2000, and from May to December 2001, which functioned as `snapshots' in time of the three companies under study. The data was systematically analysed and coded using ATLAS/ti, a qualitative data analysis tool, which enabled me to sort, organise, and reduce the data into a manageable form. Chapter 4 (Data Analysis) contains the three cases that were developed (anonymised as Pioneer, Helvetica, and Viking). Each case is presented in its entirety (constituting a `within case' analysis), followed by a 'cross-case' analysis, backed up by extensive verbatim evidence. Chapter 5 presents the research findings, outlines the study's limitations, describes managerial implications, and offers suggestions for where more research could elaborate the conceptual model developed through this study, as well as suggestions for additional research in areas where managerial implications were outlined. References and Appendices are included at the end. This dissertation results in the construction and description of a conceptual model, grounded in the empirical data and tied to existing literature, which portrays a set of elements and relationships deemed important for understanding the impact of stakeholder engagement for firms in terms of organisational learning and change. This model suggests that corporate perceptions about the nature of stakeholder influence the perceived value of stakeholder contributions. When stakeholders are primarily viewed as a source of pressure or threat, firms tend to adopt a reactive/defensive posture in an effort to manage stakeholders and protect the firm from sources of outside pressure -behaviour consistent with Resource Dependence Theory, which suggests that firms try to get control over extemal threats by focussing on the relevant stakeholders on whom they depend for critical resources, and try to reverse the control potentially exerted by extemal constituencies by trying to influence and manipulate these valuable stakeholders. In situations where stakeholders are viewed as a current strategic asset, firms tend to adopt a proactive/offensive posture in an effort to tap stakeholder contributions and connect the organisation to its environment - behaviour consistent with Institutional Theory, which suggests that firms try to ensure the continuing license to operate by internalising external expectations. In instances where stakeholders are viewed as a source of future value, firms tend to adopt an interactive/innovative posture in an effort to reduce or widen the embedded system and bring stakeholders into systems of innovation and feedback -behaviour consistent with the literature on Organisational Learning, which suggests that firms can learn how to optimize their performance as they develop systems and structures that are more adaptable and responsive to change The conceptual model moreover suggests that the perceived value of stakeholder contribution drives corporate aims for engagement, which can be usefully categorised as dialogue intentions spanning a continuum running from low-level to high-level to very-high level. This study suggests that activities aimed at disarming critical stakeholders (`manipulation') providing guidance and correcting misinformation (`education'), being transparent about corporate activities and policies (`information'), alleviating stakeholder concerns (`placation'), and accessing stakeholder opinion ('consultation') represent low-level dialogue intentions and are experienced by stakeholders as asymmetrical, persuasive, compliance-gaining activities that are not in line with `true' dialogue. This study also finds evidence that activities aimed at redistributing power ('partnership'), involving stakeholders in internal corporate processes (`participation'), and demonstrating corporate responsibility (`stewardship') reflect high-level dialogue intentions. This study additionally finds evidence that building and sustaining high-quality, trusted relationships which can meaningfully influence organisational policies incline a firm towards the type of interactive, proactive processes that underpin the development of sustainable corporate strategies. Dialogue intentions are related to type of corporate response: low-level intentions can lead to buffering strategies; high-level intentions can underpin bridging strategies; very high-level intentions can incline a firm towards boundary redefinition. The nature of corporate response (which encapsulates a firm's posture towards stakeholders, demonstrated by the level of dialogue intention and the firm's strategy for dealing with stakeholders) favours the type of learning and change experienced by the organisation. This study indicates that buffering strategies, where the firm attempts to protect itself against external influences and cant' out its existing strategy, typically lead to single-loop learning, whereby the firm teams how to perform better within its existing paradigm and at most, improves the performance of the established system - an outcome associated with first-order change. Bridging responses, where the firm adapts organisational activities to meet external expectations, typically leads a firm to acquire new behavioural capacities characteristic of double-loop learning, whereby insights and understanding are uncovered that are fundamentally different from existing knowledge and where stakeholders are brought into problem-solving conversations that enable them to influence corporate decision-making to address shortcomings in the system - an outcome associated with second-order change. Boundary redefinition suggests that the firm engages in triple-loop learning, where the firm changes relations with stakeholders in profound ways, considers problems from a whole-system perspective, examining the deep structures that sustain the system, producing innovation to address chronic problems and develop new opportunities - an outcome associated with third-order change. This study supports earlier theoretical and empirical studies {e.g. Weick's (1979, 1985) work on self-enactment; Maitlis & Lawrence's (2007) and Maitlis' (2005) work and Weick et al's (2005) work on sensegiving and sensemaking in organisations; Brickson's (2005, 2007) and Scott & Lane's (2000) work on organisational identity orientation}, which indicate that corporate self-perception is a key underlying factor driving the dynamics of organisational teaming and change. Such theorizing has important implications for managerial practice; namely, that a company which perceives itself as a 'victim' may be highly inclined to view stakeholders as a source of negative influence, and would therefore be potentially unable to benefit from the positive influence of engagement. Such a selfperception can blind the firm from seeing stakeholders in a more positive, contributing light, which suggests that such firms may not be inclined to embrace external sources of innovation and teaming, as they are focussed on protecting the firm against disturbing environmental influences (through buffering), and remain more likely to perform better within an existing paradigm (single-loop teaming). By contrast, a company that perceives itself as a 'leader' may be highly inclined to view stakeholders as a source of positive influence. On the downside, such a firm might have difficulty distinguishing when stakeholder contributions are less pertinent as it is deliberately more open to elements in operating environment (including stakeholders) as potential sources of learning and change, as the firm is oriented towards creating space for fundamental change (through boundary redefinition), opening issues to entirely new ways of thinking and addressing issues from whole-system perspective. A significant implication of this study is that potentially only those companies who see themselves as a leader are ultimately able to tap the innovation potential of stakeholder dialogue.

The Reflections of Strategic Orientation on profitability - A resource-based study in pulp and paper industry

Tutkielman tavoitteena oli analysoida erilaisia strategisia orientaatioita sellu- ja paperiteollisuudessa. Sellu- ja paperiteollisuus on kohtaamassa strategisia haasteita, jotka ulottuvat syvälle sen rakenteisiin. Yritykset ovat valinneet erilaisia lähestymistapoja organisoidessaan tuotantoa ja kansainvälistä arvoketjuaan tässä muuttuvassa ympäristössä. Tutkimukseen valittiin 30 suurinta sellu- ja paperiteollisuudessa toimivaa yritystä ja mahdollisia syitä kannattavuuseroihin yritysten välillä analysoitiin. Yritysten strategista orientaatiota tarkasteltiin vertailemalla muun muassa seuraavia tekijöitä: vertikaalinen integraatioaste, tuotevalikoiman laajuus, tuotantokapasiteetin levinneisyys ja tuotantokapasiteetin ikä. Kannattavuutta mitattiin erilaisilla talouden tunnusluvuilla (liikevoitto, oman pääoman tuotto-%, koko pääoman tuotto-%). Tulosten mukaan yrityksiä voidaan ryhmitellä strategisen orientaation perusteella ja ryhmien välillä on kannattavuuseroja.

Intraorganizational Benefits of Customer Orientation in International Businesses - Empirical Evidence fromFinnish Service Exporters

This research concentrates to find out whether service employees' customer orientation has positive consequences relating to job attitudes in international context. A literature review is conducted in order to define the essential concepts and to see what kind of results researchers have found between customer orientation and job attitudes. The job attitudes researched in this research arejob satisfaction, role ambiguity, role conflict and commitment. This research differs from the previous customer orientation and job attitudes researchers with its international context. International services are thus discussed. Upon the previous literature and findings, four hypotheses are formed. They are tested with data from Finnish service exporters. Three hypotheses are supported, indicating that customer orientation has positiveeffect on job attitudes also in international context. Upon this research and literature review, future research recommendations are presented as well as managerial implications.

How Social Dominance Orientation affects union participation: The role of union identification and perceived union instrumentality

Bridging social dominance theory and labour studies, this field study investigated the mechanisms underpinning the relationship between rejection of group-based domination and participation in union activities. Respondents (N = 135) were members of a public sector union in California, that is, a hierarchy-attenuating institution. Results revealed that union identification mediated the negative relationship between social dominance orientation and active union participation. Moreover, the mediational effect of union identification was moderated by perceived union instrumentality (i.e. outcome- and process-based benefits afforded by the union), indicating that the relationship between union identification and participation was stronger among those union members who consider that the union affects workplace justice. The findings reveal the importance of both identity-based and instrumental motivations underlying union participation. The novelty of applying social dominance theory to union behaviour is underscored.

Value / personality - attitude - behavior hierarchy and its impact on individual performance in the context of market orientation

The purpose of this dissertation is to better understand how individual employees? values and personality traits influence their attitudes toward market orientation; how such attitudes impact their market-oriented behaviors; and how in turn, these behaviors lead to their superior individual performance. To investigate these relationships, an empirical study was conducted in the French speaking part of Switzerland and data were collected from a sample of service firms? employees from diverse departments and hierarchical levels. To a large extent, the results support the hypothesis of a hierarchical chain moving from value / personality to attitude to behavior to individual performance in relation to market orientation. Le sujet de cette thèse de doctorat est de mieux comprendre comment les valeurs et les traits de personnalité des employés influencent leurs attitudes envers l'orientation vers le marché ; comment ces attitudes ont un effet sur les comportements orientés vers le marché de ces employés et enfin, comment ces comportements conduisent à une meilleure performance individuelle. Afin d'étudier ces relations, une enquête a été conduite en Suisse romande et des données ont été collectées auprès d'un échantillon d'employés d'entreprises de service de différents départements et niveaux hiérarchiques. Les résultats sont concordants avec l'hypothèse d'une chaîne causale allant des valeurs / traits de personnalité aux attitudes, aux comportements et finalement à la performance individuelle dans le contexte de l'orientation vers le marché.