A selected literature review on the changing role of stakeholders as value creators
| Date | 04 April 2016 |
| Published date | 04 April 2016 |
| Pages | 100-119 |
| DOI | https://doi.org/10.1108/WJSTSD-01-2016-0002 |
| Author | Shridhar M Samant,Shirish Sangle |
| Subject Matter | Public policy & environmental management,Environmental technology & innovation |
A selected literature review on
the changing role of stakeholders
as value creators
Shridhar M. Samant and Shirish Sangle
Department of Environment Engineering and Management,
National Institute of Industrial Engineering, Mumbai, India
Abstract
Purpose –The purposeof this paper is toinvestigate the changingrole of stakeholdersin value creation
since the inception of literature on stakeholders and sustainability from 1984 and 1987, respectively until
2015. To understand interrelationships among key terms of stakeholder andsustainability literature.
Design/methodology/approach –The paper explores the changing role of stakeholders as a source
of value creation through extensive literature review by adopting text mining approach. VantagePoint
is the tool used to facilitate text mining literature of sustainability and stakeholder and related
literature from 1984 to 2015.
Findings –This paper reveals that the major trends in firm’s approach towards stakeholders has
changed over the years from demonstration of compliance in 1984-1994, safeguarding of reputation
from 1994 to 2004, to finally co-creating value with stakeholders from the period of 2004-2014.
Research limitations/implications –There have been extensive literature reviews done on
stakeholder and sustainability literature, but only few have studied the integration of stakeholder and
sustainability literature. This paper has used a novel approach, i.e. VantagePoint software to analyse
the sustainability and stakeholder literature.
Originality/value –The changing role of stakeholders as a value creator have provided new research
avenues in value creation process. The emerging challenge that firms now face is to co-create
sustainable value by engaging both internal and external stakeholders.
Keywords Sustainable development, Stakeholders, Stakeholder engagement, Value creation,
Stakeholder theory, Sustainable value
Paper type Literature review
Introduction
Stakeholder literature and sustainability literature have come a long way since their
inception in 1980s when Edward Freeman wrote the first book on stakeholder theory in
1984. Soon after that appeared the Brundtland Commission report on sustainable
development (SD) was published in 1987. With the publication of these volumes and the
steady development of their theories and concepts over the years, it can be observed that
there has been a significant change in the understanding and implementation of stakeholder
theory and sustainability theory, respectively over the years. This changing trend has been
of an encompassing nature where value is created not just for one stakeholder but also
for other stakeholders like community, NGO’s, media and others (Horisch et al., 2014).
Literature states that stakeholder theory and sustainability management are similar
as “they describe what companies actually do, suggest options how to solve problems, and
add to value creation”(Horisch et al., 2014; Starik and Kanashiro, 2013).
The main objective of a firm prior to the evolution of stakeholder and sustainability
theory was just to create economic value for shareholders. Renowned author Milton
World Journal of Science,
Technology and Sustainable
Development
Vol. 13 No. 2, 2016
pp. 100-119
©Emerald Group Publishing Limited
2042-5945
DOI 10.1108/WJSTSD-01-2016-0002
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2042-5945.htm
The authors would like to thank Centre for Technology & Innovation Management (CTIM),
NITIE, Mumbai, for their kind support during this research work.
100
WJSTSD
13,2
Friedman in 1970, had stated in his famous article named “The Social Responsibility of
Business is to Increase its Profits”that a firm’sonlyobjectiveistocreateprofits(value)for
shareholders. But with passing of time and the evolution of the above theories, i.e.
sustainability and stakeholder theories in 1980s, we can see a major shift in management
literature. Where in firms do not just create value for shareholders (economic value) but are
trying to create value in all three dimensions, namely, economic, social and environmental,
thus helping in creation of value for all stakeholders: internal stakeholders –employees,
investors and external stakeholders –NGO’s, society, government, media and others.
The worsening state of natural environment due to global warming and depletion of
natural resources are causing huge risks and constraints on firms today. But these new
challenges are also offering them newer opportunities to create new value by addressing
the needs of the people at the bottom of the pyramid (BOP). So, to adapt to these
unforeseen challenges and opportunities, firms need to accommodate more stakeholders
so as to gain access to newer knowledge. With this new acquired knowledge, they can
develop new products and technology which are environment friendly and which also
addresses the needs of the people at BOP. So firms that engage more number of
stakeholders will be in a better position to create sustainable value (SV) as they will have
access to knowledge and requirements of its stakeholders. SV will help in creating not just
economic value but also environmental and social value for all stakeholders. Also firms
need to engage with a wider range of stakeholders because environment is a public good
and firmshave social obligationstowards satisfyingthe societal and environmentalneeds
of stakeholders. One of the ways to create SV is the co-creation process, it is a process in
which two entities come together to create a new value through interaction and dialogues.
Today, with easy access to new technologies and social networks it is possible to interact
and co-create with a much wider range of stakeholders which was nearly an impossible
task in the earlier period. Many of the firmstoday are mostly co-creat ing economic value
with customers but when firms want to create SV they need to co-create with a variety of
stakeholders, both internal stakeholders and external stakeholders. Considering all the
stakeholders and by integrating their knowledge and views into decision making, will
help firms have a license to operate, innovate and compete (Sachs and Rühli, 2011). Thus,
it can be concluded that stakeholders are becoming an important source of value creation.
In this paper, we have used VantagePoint software and adopted text mining
methodology with applications of naturallanguage processing (NLP). The paper’smajor
research focus is to study the changing role of stakeholders in value creation and how
integration of sustainability and stakeholder literature have accelerated this change in
perception of stakeholders as a source of value creation. Pictorial representation of
literature showcasing the integration of sustainability and stakeholder theory is done
through Aduna cluster and factor map based on principal component analysis (PCA).
Research methodology
Literature search
Different terms have been used in the research papers to study stakeholder theory like
“stakeholders”,“stakeholder engagement”,“role of stakeholders in sustainability”. This
is felicitated with search terms such as “Sustainability”,“Sustainable Development
(SD)”,“Stakeholders”,“Stakeholder Engagement (SE)”,“Co-creation”,“Value creation”,
“Sustainable Value (SV)”during the period 1984 to 2015. A keyword search was done to
get the number of hits, which was considered as a proxy for the number of research
articles published. Since sustainability, stakeholders and value creation are
interdisciplinary topics, relevant articles get published in a wide variety of domains.
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Stakeholders
as value
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