Does stakeholder engagement promote sustainable innovation orientation?
| DOI | https://doi.org/10.1108/02635571111182764 |
| Pages | 1399-1417 |
| Published date | 27 September 2011 |
| Date | 27 September 2011 |
| Author | Silvia Ayuso,Miguel Ángel Rodríguez,Roberto García‐Castro,Miguel Ángel Ariño |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Does stakeholder engagement
promote sustainable innovation
orientation?
Silvia Ayuso
School of International Trade (ESCI), Pompeu Fabra University,
Barcelona, Spain
Miguel A
´ngel Rodrı
´guez
Responsabilidad y Sostenibilidad, Barcelona, Spain
Roberto Garcı
´a-Castro
Managerial Decision Sciences, IESE Business School, Madrid, Spain, and
Miguel A
´ngel Arin
˜o
IESE Business School, University of Navarra, Barcelona, Spain
Abstract
Purpose – The purpose of this paper is to focus on the contribution of stakeholder engagement to
firms’ innovation orientation within the context of sustainable development. It investigates whether
engagement with different stakeholders promotes sustainable innovation.
Design/methodology/approach – The empirical analysis is based on an international sample of
656 large companies, drawn from the annual assessment for the Dow Jones Sustainability Indexes.
A logistic regression analysis was performed in order to test the hypothesized relationships between
stakeholder interaction, knowledge management and sustainable innovation orientation.
Findings – Empirical results showed that knowledge sourced from engagement with internal and
external stakeholders contributes to a firm’s sustainable innovation orientation, but that this
knowledge has to be managed by the firm internally in order to be converted into new ideas for
innovation.
Research limitations/implications – Since the present study represents one of the first attempts
to characterize stakeholder-driven innovation in a quantitative way, there are some limitations related
to the used database that should be addressed in future research.
Practical implications – The results show the importance for companies of connecting the
business functions of stakeholder engagement and innovation, and find flexible mechanisms to
combine access and transformation of relevant stakeholder information.
Originality/value – The main contribution of the present research is to prove quantitatively that
engagement with different stakeholders is a valid mechanism for promoting sustainable innovation
within firms. This is done with a unique dataset, the SAM Group database. In addition, the present
study will advance understanding on firm’s sustainable innovation processes by framing this
phenomenon as an organizational capability.
Keywords Sustainable development, Corporatesocial responsibility, Knowledge management,
Innovation, Stakeholder engagement
Paper type Research paper
Introduction
In the context of increasing social and environmental pressure, innovation is one of the
primary means by which companies can achieve sustainable development.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0263-5577.htm
Stakeholder
engagement
1399
Received 1 February 2011
Revised 10 July 2011
Accepted 11 July 2011
Industrial Management & Data
Systems
Vol. 111 No. 9, 2011
pp. 1399-1417
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635571111182764
However, the pursuit of more sustainable products, processes and business models will
require some fundamental changes in traditional innovation approaches (Senge and
Carstedt, 2001). For instance, Hart and Milstein (1999) argue that managers must
fundamentally rethink their views about strategy, technology and markets in order to
capture sustainable business opportunities. Hall and Vredenburg (2003) affirm that
sustainable development innovation is more complex than conventional, market-driven
innovation, because it has to consider a wider range of stakeholders and their often
contradictory demands.
In essence, today’s companies need to innovate by reinventing the way they relate to
their multiple stakeholders: employees, customers, suppliers, NGOs/activists,
communities, governments, competitors, etc. But at the same time, the actively
managed relationships with stakeholders can become an important source of idea s for
innovations that address stakeholder expectations and ultimately contribute to the
welfare of the social and natural environment. Through stakeholder engagement
companies can anticipate, understand, and respond faster and more easily to changes
in the rapidly changing business environment. Dialogue with stakeholders also brings
opportunities for generating new creative solutions, beneficial for both the company
and the stakeholders.
Despite the potential of stakeholder engagement as a source for innovation, there
has been very little research on this topic. In addition, studies conducted so far in the
intersection of innovation and sustainable development/corporate social responsibility
have mostly been qualitative case studies (Hockerts et al., 2009; Holmes and Smart,
2009; MacGregor and Fontrodona, 2008). The main contribution of the present research
is to prove quantitatively that engagement with different stakeholders is a valid
mechanism for promoting sustainable innovation within firms. This is done with a
unique dataset – the SAM Group database – probably the best externally based
assessment currently available of large corporations worldwide in sustainability
issues. In addition, the present study will advance understanding on firm’s sustainable
innovation processes by framing this phenomenon as an organizational capability.
This paper is structured as follows: in the next sections we lay out the theoretical
framework on stakeholders and innovation and develop the hypotheses that we are
going to test. Following this, we present the research methodology and the data. The
results of the empirical analysis and their implications are discussed next, and a
concluding section summarizes the research findings.
Theoretical framework
First, we will examine two theoretical approaches that have made interesting
contributions to the analysis of the relationship between stakeholder engagement and
sustainable innovation: stakeholder theory and resource-based view (RBV) of the firm.
Engagement with stakeholders has been studied most prominently from the stakeholder
theory approach. Stakeholder theory can be traced back to the seminal work of Freeman
(1984), who articulated a new conceptual model of the firm that must address the
interests of its stakeholders – groups and individuals who can affect or are affected by
the organization’s purpose. This “stakeholder model” pretends to extend managers’
attention beyond the traditional interest group of shareholders, towards employees,
customers and suppliers and widely disparate groups such as local community
organizations, environmentalists, consumers advocates, governments, etc.
IMDS
111,9
1400
To continue reading
Request your trial