How Much Attention to Stakeholder Interests? A Practitioner's View of the Need to Take Account of Stakeholder Interests
| DOI | http://doi.org/10.1111/1758-5899.12254 |
| Author | Jon White |
| Published date | 01 November 2015 |
| Date | 01 November 2015 |
How Much Attention to Stakeholder Interests?
A Practitioner’s View of the Need to Take
Account of Stakeholder Interests
Jon White
Henley Business School
Some years ago, the late Sir John Harvey-Jones, a former
chairman of the board of Imperial Chemical Industries
(ICI) and a leading UK industrialist, suggested that the
board of any organisation had two main tasks: the devel-
opment of strategy and public relations. The emphasis
on public relations might seem misplaced to those who
hold traditional and outdated views of what public rela-
tions involves, but as a task of management it attends
to, and works to maintain and achieve results in relation-
ships on which the organisation depends to survive and
make progress.
A central concern of the practice is with stakeholders,
their behaviour, perceptions, attitudes, interests and
motivations. The perspective developed in public rela-
tions practice is of the organisation in its social environ-
ment, and of the network of relationships in which the
organisation is embedded. In practice, the term ‘stake-
holder’is superfluous, as the underlying definition relat-
ing to groups affected by, or affecting the organisation
as it pursues its objectives is sufficient. In practice, we
talk about groups or ‘publics.’
But how much time and attention should be given to
trying to accommodate to stakeholder interests? This
was a question raised by another board chairman, Sir
John Sunderland, of Cadbury’s in a keynote Henley Part-
nership lecture to Henley Business School in 2006. In his
lecture ‘The Stakeholder Paradox‘, he talked about the
demands made by an increasing number of stakeholders
on the modern business organisation. Attending to these,
he argued, would leave little time for the other priorities
business leaders have to meet.
In the time since his lecture, pressures on business –
and other –leaders have grown. Leaders are increasingly
aware of the complexity of the operational environment,
the speed of technological change, the attention that
can be brought quickly to bear on organisations through
social media, and the developing demands of many
stakeholder groups.
It was recognised some time ago in organisational
studies, that in a way the environment ‘crowds in’on
organisational decision making, adding to the complexity
faced by decision makers. The practical questions –raised
in Sir John Sunderland’s lecture –are how much time and
attention should be given to the environment, and particu-
larly the expectations and interests of stakeholders. These,
in practice, come out in considerations of how to improve
decision making to take the environment and the interest
of involved groups into account. Here, we are talking about
decision making at the highest levels of organisations, at
board, senior management –strategic –levels.
There is strong current interest in these questions. Two
initiatives can be singled out for mention. The first, from
the Association of Chartered Certified Accountants (ACCA,
http://www.accaglobal.com/uk/en/discover/news/2014/03/
governance-consultation.html), recently carried out a
consultation dealing with the need for improvements to
corporate governance, which focussed on how improved
decision making at board level might lessen risks of fail-
ures in corporate governance. The second, from the UK
business think tank Tomorrow’s Company, examined how
attention to important relationships improves decision
making and the creation of value for organisations
(www.tomorrowsrelationships.com). Both initiatives deal
with corporate governance and quote from recent work
around the world to improve governance and the report-
ing of performance to meet obligations to a range of
stakeholders. Stakeholders are internal and external to the
organisation. Internally, they include employees, and an
inclusive approach will also draw suppliers into a closer
relationship with the organisation. Externally, obvious
groups such as investors are involved, but also the wider
community and interest groups have specific concerns
about the operations of the organisation.
Obstacles to the improvement of decision making to
account for stakeholder interests include:
•Lack of time.
•Leadership, management myopia.
•Quality of decision making.
•Sources of advice.
•Failures to seek out and use relevant information.
Global Policy (2015) 6:4 doi: 10.1111/1758-5899.12254 ©2015 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 6 . Issue 4 . November 2015 501
Practitioners’ Special Section
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