The lack of a multifaceted perspective in corporate social responsibility is partly due to stakeholder theory’s focus on managerial decision-making
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(Jones and Wicks, 1999). The stakeholders are analysed through the lens of the firm, which hinders the balance between all the parties of the stake- holder relationship. For example, Agle et al. (1999) document the presence of a ‘stakeholder class system’ in the minds of large corporations’ CEOs who value shareholders, employees and customers more than the govern- ment and communities. Moreover, in their study on stakeholder-agency theory, Hill and Jones (1992) argue that managers pay more attention to stakeholders who are perceived by them to be more important. This perception is likely to be based on the managers’ previous experience and subjective interpretations of the environment. Thus, the assumption is that managers shape their environments by making choices among the stakeholders that they will deal with. In a similar vein, Mitchell et al. (1997) elaborate a stakeholder identification model by focusing on certain charac- teristics to identify a salient stakeholder. In this model on the manager’s perception of the salience of stakeholders, the shareholder’s power to influence the firm, the legitimacy of a stakeholder’s claim and the urgency of the stakeholder’s issue are identified as the key determinants of salience.
However, it is also observed that each characteristic is a variable rather than a steady state, which is subject to change for each group and relation- ship (Agle et al., 1999). In another study, Jawahar and McLaughlin (2001) propose a descriptive theory of stakeholders that seeks to identify the major stakeholders and to explain why and when these stakeholders are important and how the resource allocation is made among primary stakeholders. In one study that has departed from the norm and enabled multiple stakeholder discourses, Hill and Jones (1992) develop the stakeholder-agency perspective. The firm is viewed as a ‘nexus of contracts between resource holders (stakeholders)’. In a similar vein, Friedman and Miles (2002) suggest four structural configurations on stakeholder/
organization relations to explain why different stakeholders influence organizations in different ways. They claim that the structural nature of organization/stakeholder relations, the contractual forms and the available institutional support influence the extent of stakeholder impact on the organization. Friedman and Miles (2002) investigate the intricacies of the complex web of relations, first by the compatibility of ideas and material interests. Secondly, they identify both the necessary relations that are internal to a social structure and the contingent ones that are external or not integrally connected. However, there is still much to do in terms of understanding the dynamic interaction of the stakeholders (Margolis and Walsh, 2003). Although each group can be seen as having a stake in the continued existence of the firm (Hill and Jones, 1992), the claims of different groups may conflict. Presently, stakeholder theory considers
Sibel Yamak 75 mainly large stakeholder groups such as clients, employees and share- holders, and tends to overlook many differences within stakeholder groups. It also needs to consider ways of determining the outcomes of stakeholder relations that may go beyond the economic and social classifi- cation (Harrison and Freeman, 1999). The assessment of this complex web of relations may hardly be done within the limits of a managerialist perspective.
Mellahi and Wood (2003) point that there is a tendency to focus on
‘management’ in the stakeholder literature. So, there seems to be a predominantly firm-based relationship flowing from the firms to the stakeholders, which is mainly based on a rational economy perspective.
Although in an early study on economics, Friedman (1962) questions the capability of managers of private enterprises in deciding what the social interest is, there is still an underlying assumption that managers are free to set the boundaries of their relationship with stakeholders. In a sense, they are assumed to be the major actors that organize the envir- onment composed of stakeholders. The literature is dominated by manager-based views of stakeholder interaction as if the manager is the sole and major decision-maker on who is a stakeholder and how they will be treated (Mellahi and Wood, 2003). As a consequence of this management-centred view of corporate social responsibility and stakeholder evaluation, the theory appears to be rather restricted. For instance, it is maintained that stakeholder theory cannot comprise duties to non-humans (Orts and Strudler, 2002; Philips and Reichart, 2000) due to this enterprise/manager-centred perspective. Mellahi and Wood (2003) claim that the perception of stakeholder rights as ‘a voluntary gift of management, whereby immediate gains are sacrificed for long term profitability, for the sake of doing the right thing’ will not contribute much to the enforcement of corporate responsibility.
On the other hand, the fact that the manager is only one of the actors and that he/she may not necessarily be the principal one, is stressed in many studies (Alvesson and Willmott, 1996; Bryman, 1999). It can also be stated that the dominating party in stakeholder interactions may depend very much on the context. Thus, institutions rather than the manager appear to be a topic of interest in understanding stakeholder relations. Institutions may both constitute stakeholders and shape socially responsible policies (Mellahi and Wood, 2003). Institutions shape the rules, values, norms and views of the world, which in turn define roles and create the social setting for action. The following section will discuss the potential implications of the adoption of an institutional perspective in studying stakeholder relations.
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