The Value of Managing Stakeholders

Abstract

This article investigates how firms can create value by managing their complex relationships with multiple stakeholders over time. It discusses the fundamental question of who matters to firms and why. Five main stakeholder groups are considered: regulators, activists and geographic communities, customers, employees, and corporate boards. It also describes the issues involved when considering a firm's polymorphous network of stakeholders and their influences. It is shown that the more dependent an organization is on a group, the greater the power of that group and the greater its ability to influence organizational outcomes. There exists an imbalance in resource dependence favoring firms, as poorer communities may be more dependent on firms for resources than the other way around. Furthermore, the significance of addressing temporality, change, and the notion of co-creation of value in environmental stakeholder research is evaluated. © Oxford University Press 2012. All rights reserved.