Year: 2023
Type: article
Abstract: To shield stakeholders from exploitation, society increasingly expects organizations to engage with stakeholders. While exploitation of stakeholders is of great concern, economic literature points to the costly nature of stakeholder engagement vis-à-vis alternative mechanisms that protect stakeholders, such as competitive markets. When the costs of stakeholder engagement outweigh the benefits, why would organizations engage with stakeholders? Through an analysis of the cooperative enterprise and a comparison with its capitalist counterpart, we theorize two additional reasons why stakeholder engagement is beneficial. First, we explain how stakeholder engagement facilitates long-term organizational resilience and protection of stakeholders in times of crisis, and second, we show how engagement is a decisive ingredient in answering non-economic value requirements of stakeholders. To conclude, we contribute to the broader stakeholder engagement and cooperative literature by stressing that engagement practices, and particularly democratic governance arrangements, are subject to design principles that sometimes favor stakeholders in capitalist firms.
Source: Business & Society
Authors: Adrien Billiet, Johan Bruneel, Frédéric Dufays
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,500
OpenAlex ID: W4383376360