A study of voluntary disclosure of listed Chinese firms - a stakeholder perspective

Purpose – The aim of this paper is to investigate stakeholder power changes and their impact on firms' disclosure decisions in the Chinese stock market. Using legitimacy theory and stakeholder theory, the paper identifies newly emerged stakeholder groups for listed Chinese firms during three distinguished periods of the development of the Chinese stock market.

Design/methodology/approach – Panel data analysis was undertaken over a period from 1995-2006 with an aim to examine the influence of stakeholder power changes on voluntary disclosures made by 297 listed firms in their 12 years of annual reports. A voluntary disclosure checklist has been used for hand-collecting data from annual reports.

Findings – The finding shows that different stakeholder groups exert different degrees of influence on firms' decision-making in respect of information disclosure during different stages of the development of the Chinese stock market.

Research limitations/implications – The impact of a stakeholder power changes on corporate disclosure has not been well addressed and how listed Chinese firms respond to these changes is still a significant gap in the Chinese corporate disclosure literature. In this study, the paper uses proxies to represent each stakeholder group, discuss power changes of each group and predict the impact of power changes on firms' voluntary disclosure.

Originality/value – The paper identifies the new content of the “social contract” between listed firms and Chinese society and identifies various stakeholder groups of listed Chinese firms in the context of a new “social contract”. The paper predicts that voluntary corporate disclosure is the result of stakeholder pressures and firms use voluntary disclosure as one of their strategies to manage the firm-stakeholder relationship.

Developing economies and the emergence of new stakeholder group: an examination of stakeholders in the Chinese stock market

As a consequence of the development of the Chinese economy, there has been an emergence of “new” stakeholder groups for the Chinese listed firms. New stakeholder groups include creditors, regulatory agencies, private investors, professional associations and environmentalists. With the use of secondary data, a review was undertaken to explore the emergence of these new stakeholder groups and discuss their influence over listed firms in China. The stakeholder typology developed by Mitchell et al (1997) is used to identify stakeholder attributes of each stakeholder group and assess their stakeholder power. The changes of stakeholder power over the years mirror China’s transition from a centrally planned economy to a more market oriented one.

A stakeholder perspective on buyer-supplier conflict

This study seeks to investigate how stakeholder power and an organization's pursuit of legitimacy influence its reaction to conflict with a supplier. We conducted an empirical study among travel agents and tour operators to test the relationship between conflict and stakeholder power and legitimacy derived from three different stakeholders. Our findings imply that power has a dual role. Whereas supplier power reduces buyer–supplier conflict, stakeholder power increases it. Moreover, this study shows that the quest to achieve greater legitimacy from the firm's competitive arena increases conflict. This study is one of the few that test stakeholder theory empirically. We demonstrate that stakeholder theory provides additional explanations above the hitherto taken dyadic approach toward understanding conflict. This study also shows that power can simultaneously reduce and increase conflict depending on which party possesses power. Greater supplier power decreases conflict, while greater stakeholder power and stakeholder-derived legitimacy increases it. Therefore, organizations have to balance their stakeholder and supplier interests.

Understanding stakeholder participation in post-disaster recovery (case study: Nagapattinam, India)

Stakeholder participation is widely acknowledged as a critical component of post-disaster recovery because it helps create a shared understanding of local hazard risk and vulnerability, improves recovery and mitigation decision efficacy, and builds social capital and local resilience to future disasters. But approaches commonly used to facilitate participation and empower local communities depend on lengthy consensus-building processes which is not conducive to time-constrained post-disaster recovery. Moreover, these approaches are often criticized for being overly technocratic and ignoring existing community power and trust structures. Therefore, there is a need for more nuanced, analytical and applied research on stakeholder participation in planning for post-disaster recovery. This research examines participatory behavior of three stakeholder groups (government agencies, non-local non-government organizations, local community-based organizations) in three coastal village communities of Nagapattinam (India) that were recovering from the 2004 Indian Ocean tsunami. The study found eight different forms of participation and non-participation in the case study communities, ranging from 'transformative' participation to 'marginalized' non-participation. These forms of participation and non-participatory behavior emanated from the negotiation of four factors, namely stakeholder power, legitimacy, trust, and urgency for action. The study also found that the time constraints and changing conditions of recovery pose particular challenges for how these factors operated on the ground and over the course of recovery. Finally, the study uses these insights to suggest four strategies for recovery managers to use in the short- and long-term to facilitate more effective stakeholder participation in post-disaster recovery.

Climate change-related corporate governance information : an explanation of the difference between the supply of and demand for such information

This study investigates the gap between the climate change-related corporate governance information being disclosed by companies, and the information sought by stakeholders. To accomplish this objective we utilised previous research on stakeholder demand for information, and we conducted in-depth interviews with six corporate representatives from major Australian emission-intensive companies. Having gained and documented a rich insight into the potential factors responsible for the current gap in disclosure we find that the existence of an expectations gap; the perceived cost of providing commercially sensitive information; the limited accountability being accepted by the corporate managers; and, a lack of stakeholder pressure together contribute to the lack of disclosure. In highlighting the gap in disclosure, this study suggests strategies to reduce the gap in climate change-related corporate governance disclosures.

Disclosure of climate change-related corporate governance practices

Based on a survey of climate change experts in different stakeholder groups and interviews with corporate climate change managers, this study provides insights into the gap between what information stakeholders expect and what Australian corporations disclose. This paper focuses on annual reports and sustainability reports with specific reference to the disclosure of climate change-related corporate governance practices. The findings culminate in the refinement of a best practice index for the disclosure of climate-change-related corporate governance practises. Interview results indicate that the low levels of disclosures made by Australian companies may be due to a number of factors. These include a potential expectations gap, the absence of pressure from powerful stakeholders, a concern for stakeholder information overload, the cost of providing information, limited perceived accountability for climate change, and preferring other media for disclosure.

Essays on corporate reputation: Antecedents and consequences

This dissertation studied the determinants and consequences of corporate reputation. It explored how firm-, industry-, and country-level factors influence the general public’s assessment of a firm’s reputation and how this reputation assessment impacted the firm’s strategic actions and organizational outcomes. The three empirical essays are grounded on separate theoretical paradigms in strategy, organizational theory, and corporate governance. The first essay used signaling theory to investigate firm-, industry-, and country-level determinants of individual-level corporate reputation assessments. Using a hierarchical linear model, it tested the theory based on individual evaluations of the largest companies across countries. Results indicated that variables at multiple analysis levels simultaneously impact individual level reputation assessments. Interactions were also found between industry- and country-level factors. Results confirmed the multi-level nature of signaling influences on reputation assessments. Building on a stakeholder-power approach to corporate governance, the second essay studied how differences in the power and preferences of three stakeholder groups—shareholders, creditors, and workers—across countries influence the general public’s reputation assessments of corporations. Examining the largest companies across countries, the study found that while the influence of stock market return is stronger in societies where shareholders have more power, social performance has a more significant role in shaping reputation evaluations in societies with stronger labor rights. Unexpectedly, when creditors have greater power, the influence of financial stability on reputation assessment becomes weaker. Exploring the consequences of reputation, the third essay investigated the specific effects of intangible assets on strategic actions and organizational outcomes. Particularly, it individually studied the impacts of acquirer acquisition experience, corporate reputation, and approach toward social responsibilities as well as their combined effect on market reactions to acquisition announcements. Using an event study of acquisition announcements, it confirmed the significant impacts of both action-specific (acquisition experience) and general (reputation and social performance) intangible assets on market expectations of acquisition outcomes. Moreover, the analysis demonstrated that reputation magnifies the impact of acquisition experience on market response to acquisition announcements. In conclusion, this dissertation tried to advance and extend the application of management and organizational theories by explaining the mechanisms underlying antecedents and consequences of corporate reputation.

Does stakeholder orientation matter? : empirical evidence about power and influence in local government decision-making

Despite being in the business agenda for almost thirty years, stakeholder management is still an under explored field in the public management context. The investigation presented in this doctoral thesis aims to ensure that stakeholder management is a useful technique able to raise issues about power and interests to public organisation’s strategic management processes. Stakeholder theory is tested in an exploratory study carried out with English Local Authorities whose focus is place on decision-making. The findings derive from two distinct and complementary studies: a cross-sectional survey undertaken with chief executives based on the quantitative approach and a qualitative investigation based on cross-sectional case studies and in-depth interviews of validation. While the first study aimed to produce a reliable and comprehensive list of stakeholders able to raise issues in decision-making, the second study aimed to depict the arena in which decision-making comes about. The findings indicate that local government decision-making is a multistakeholder process in which influences are exerted according to stakeholders’ power and interest. The findings also indicate that local government managers should take into account these tissues to avoid losing resources and legitimacy from its environmental supporters. Another issue raised by the investigation is related to the ethics upon which these types of relationships are based. According to the evidence gathered throughout the investigation, the formal model of accountability does not cover the whole set of stakeholders engaged in the process.

The open kimono: How Intel balances trust and power to maintain platform leadership

A small group of companies including Intel, Microsoft, and Cisco have used "platform leadership" with great effect as a means for driving innovation and accelerating market growth within their respective industries. Prior research in this area emphasizes that trust plays a critical role in the success of this strategy. However, many of the categorizations of trust discussed in the literature tend to ignore or undervalue the fact that trust and power are often functionally equivalent, and that the coercion of weaker partners is sometimes misdiagnosed as collaboration. In this paper, I use case study data focusing on Intel's shift from ceramic/wire-bonded packaging to organic/C4 packaging to characterize the relationships between Intel and its suppliers, and to determine if these links are based on power in addition to trust. The case study shows that Intel's platform leadership strategy is built on a balance of both trust and a relatively benevolent form of power that is exemplified by the company's "open kimono" principle, through which Intel insists that suppliers share detailed financial data and highly proprietary technical information to achieve mutually advantageous objectives. By explaining more completely the nature of these inter-firm linkages, this paper usefully extends our understanding of how platform leadership is maintained by Intel, and contributes to the literature by showing how trust and power can be used simultaneously within an inter-firm relationship in a way that benefits all of the stakeholders.

Securities market regulators’ use of the ‘please explain’ queries sanction and its power of compliance

The aim of this study is to investigate the compliance impact of price queries issued by a securities market operator to its participating firms. Market operators in Australia and New Zealand, such as the Australian Securities Exchange and the New Zealand Securities Exchange, have the regulatory power in their rules to issue queries to its market participants to explain unusual fluctuations in trading price or volume in the market. The operator will issue a price query where it believes that the market has not been fully informed as to price relevant information. Responsive regulation has informed much of the regulatory debate in securities laws in our region. We posit that price queries are one strategy that a market operator can use in communicating its enforcement expectations to its stakeholder. However, whilst responsive regulation informs regulatory choices, an alternate view seeks to explain why participants respond to these regulatory strategies, and we use disclosure behaviour after price queries to test compliance behaviour

The 'Stakeholder Approach' to corporate governance and regulation : an assessment

The framework by which organizations are governed has been changed. A reason for this change is related with the force of stakeholders that compel the political power and the business society to review the ways in which companies are governed. Stakeholder thinking has gradually put this change at the center of research into business and society relations. Based on the stakeholder thinking, the corporate regulation framework has extended a new dimension in the business and society interface. This article assesses these issues.

Kaleidoscope : shaping a better future through a stakeholder approach to widespread organisational change

The main focus of ‘Kaleidoscope: Reframing evaluation through a stakeholder approach to sustainable, cultural change in Higher Education’ is to develop a set of principles to guide user-led engagement in widespread organisational change and maximise its impact. The word kaleidoscope represents the unique lens through which each institution will need to view their cultural specificity and local context through an extensive process of collaboration and engagement, followed by communication and dissemination. Kaleidoscope has particular relevance when new approaches to learning and teaching evaluation are introduced by tertiary institutions. Building on the Reframe Project, which involved three years of user-led consultation and was designed to meet stakeholders’ needs, QUT successfully introduced a new evaluation framework in 2013 across the university. Reframe was evidence based, involved scholarly reflection and was founded on a strong theoretical framework. The evolution of the evaluation framework included analysis of scholarly literature and environmental scans across the higher education sector (Alderman, et al., 2012), researched development of conceptual theory (Alderman, et al., in press 2013), incorporated the stakeholder voice and framed within project management principles (Alderman & Melanie, 2012). Kaleidoscope’s objectives are for QUT to develop its research-based stakeholder approach to distil the successful experience exhibited in the Reframe Project into a transferable set of guidelines for use by other tertiary institutions across the sectors. These guidelines will assist others to design, develop, and deploy, their own culturally specific widespread organisational change informed by stakeholder engagement and organisational buy-in. It is intended that these guidelines will promote, support and enable other tertiary institutions to embark on their own projects and maximise the impact. In correlation with a our conference paper, this round table presents the Draft Guidelines and Framework ready for external peer review by evaluation practitioners, as part of Kaleidoscope’s dissemination (Hinton & Gannaway, 2011) applying illuminative evaluation theory (Parlett & Hamilton, 1976), through conference workshops and linked round table discussions (Shapiro, et al., 1983; Jacobs, 2000).

A decision-analysis-based framework for analysing stakeholder behaviour in scenario planning

Scenario planning is a method widely used by strategic planners to address uncertainty about the future. However, current methods either fail to address the future behaviour and impact of stakeholders or they treat the role of stakeholders informally. We present a practical decision-analysis-based methodology for analysing stakeholder objectives and likely behaviour within contested unfolding futures. We address issues of power, interest, and commitment to achieve desired outcomes across a broad stakeholder constituency. Drawing on frameworks for corporate social responsibility (CSR), we provide an illustrative example of our approach to analyse a complex contested issue that crosses geographic, organisational and cultural boundaries. Whilst strategies can be developed by individual organisations that consider the interests of others – for example in consideration of an organisation's CSR agenda – we show that our augmentation of scenario method provides a further, nuanced, analysis of the power and objectives of all concerned stakeholders across a variety of unfolding futures. The resulting modelling framework is intended to yield insights and hence more informed decision making by individual stakeholders or regulators.

Food waste, power, and corporate social responsibility in the Australian food supply chain

By examining corporate social responsibility (CSR) and power within the context of the food supply chain, this paper illustrates how food retailers claim to address food waste while simultaneously setting standards that result in the large-scale rejection of edible food on cosmetic grounds. Specifically, this paper considers the powerful role of food retailers and how they may be considered to be legitimately engaging in socially responsible behaviors to lower food waste, yet implement practices that ultimately contribute to higher levels of food waste elsewhere in the supply chain. Through interviews with key actors in the Australian fresh fruit and vegetable supply chain, we highlight the existence of a legitimacy gap in corporate social responsibility whereby undesirable behaviors are pushed elsewhere in the supply chain. It is argued that the structural power held by Australia’s retail duopoly means that supermarkets are able to claim virtuous and responsible behaviors, despite counter claims from within the fresh food industry that the food supermarkets’ private quality standards mean that fresh food is wasted. We argue that the supermarkets claim CSR kudos for reducing food waste at the expense of other supply chain actors who bear both the economic cost and the moral burden of waste, and that this is a consequence of supermarkets’ remarkable market power in Australia.

Authenticity and stakeholder planning in the segregated city

This paper is concerned with the production and reproduction of segregation in Northern Ireland and how territoriality has impacted on the Protestant community in Derry/Londonderry. The city was pivotal in the development of the most recent conflict, has a majority Catholic population, sits on a contested border and has attempted to respond to expressions of alienation that have emerged from the Protestant community. The research used multiple methods to understand the nature of alienation and exclusion using secondary data, a quantitative household survey, in-depth interviews and focus
groups. This empirical commitment was important in identifying and unpacking the claims of various stakeholders with an interest in the use and development of the area. It is argued here that a version of Collaborative Planning provides a loosely articulated conceptual and methodological framework for drawing Protestant communities into the wider planning framework for the city. The data, however, suggest that the nature of stakeholders is complex and contradictory, and discursive practice that seeks consensus has limits, especially in validating or legitimating the assertions of self-acclaimed stakeholders. The research shows that the Protestant community had declined and residualised but had little experience of direct conflict with the majority community. Moreover, the Protestant community is now more likely to use the city centre (a predominantly Catholic space) for consumption and work, and its demographic decline has stopped. These findings are important as policy responses and community relations programmes have failed to distinguish between measurable socioeconomic needs and claims concerning ethnic alienation based on emotion and manipulation. Such alienation has tended to bolster single identity communities who have little or no prospect and/or knowledge of the collaborative efforts required to deliver meaningful regeneration. More realistic strategies based on agonism focus attention on power relations and the authenticity of positions adopted by competing interests in land use management and change. The paper concludes by highlighting the need to acknowledge and value contestation but to challenge sectarian discourses represented as legitimate claims about community needs and priorities.