For the last 30 years a growing number of scholars and practitioners have been experimenting with concepts and models that facilitate our understanding of the complexities of today’s business challenges. Among these, “stakeholder theory” or “stakeholder thinking” has emerged as a new narrative to understand and remedy three interconnected business problems—the problem of understanding how value is created and traded, the problem of connecting ethics and capitalism, and the problem of helping managers think about management such that the first two problems are addressed. In this article, we review the major uses and adaptations of stakeholder theory across a broad array of disciplines such as business ethics, corporate strategy, finance, accounting, management, and marketing. We also evaluate and suggest future directions in which research on stakeholder theory can continue to provide useful insights into the practice of sustainable and ethical value creation.

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Stakeholder Theory: The State of the Art

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

Previous empirical evidence provided mixed results on the relationship between corporate environmental performance and environmental disclosures. We revisit this relation by testing economics based theories of voluntary disclosure using a more rigorous research design. In particular, we improve on the prior literature by focusing on purely voluntary environmental disclosures and by developing two reliable environmental performance measures using actual toxic emissions and waste management data. We also develop a content analysis index based on the Global Reporting Initiative sustainability reporting guidelines to assess the extent of discretionary disclosures in environmental and social responsibility reports. This index better captures firm disclosures related to its commitment to protect the environment than the indices employed by prior studies. Using a sample of 191 firms from the five most polluting industries in the U.S., we find a positive association between environmental performance and the extent of discretionary environmental disclosures. The result is consistent with the predictions of the economics based voluntary disclosure theory.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID899974_code.pdf?abstractid=899974&rulid=5134755&mirid=2

Revisiting the Relation Between Environmental Performance and Environmental Disclosure: An Empirical Analysis

Previous empirical evidence provides mixed results on the relationship between corporate environmental performance and the level of environmental disclosures. We revisit this relation by testing competing predictions from economics based and socio-political theories of voluntary disclosure using a more rigorous research design. In particular, we improve on the prior literature by focusing on purely discretionary environmental disclosures and by developing a content analysis index based on the Global Reporting Initiative sustainability reporting guidelines to assess the extent of discretionary disclosures in environmental and social responsibility reports. This index better captures firm disclosures related to its commitment to protect the environment than the indices employed by prior studies. Using a sample of 191 firms from the five most polluting industries in the US, we find a positive association between environmental performance and the level of discretionary environmental disclosures. The result is consistent with the predictions of the economics disclosure theory but inconsistent with the negative association predicted by socio-political theories. Nevertheless, we show that socio-political theories explain patterns in the data (“legitimization”) that cannot be explained by economics disclosure theories. 2007 Elsevier Ltd. All rights reserved.

/pdf/revisiting-the-relation-between-environmental-performance-1b1y6f6b4x.pdf

Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis

Through the juxtaposition of theory and a meso-level empirical illustration of the environmental disclosures included in the annual reports of Canadian public companies operating in the mineral extraction, forestry, oil and gas, and chemical industries over the 1982 to 1991 period, the current study attempts to increase our understanding of the role and functioning of environmental disclosures. Our analyses focus on three concerns: the influence of external pressure on environmental disclosures in annual reports, including the amount and types of strategies used in disclosure; the characteristics of environmental disclosure vis-a-vis other “social” disclosures; and the association between environmental disclosures and actual performance. We question whether such disclosures highlight positive environmental actions, obfuscate negative environmental effects or both.

Managing Public Impressions: Environmental Disclosures in Annual Reports

Measuring corporate environmental performance

The literature regarding social and environ- mental sustainability of business focuses primarily on rationales for adopting sustainability strategies and opera- tional practices in support of that goal. In contrast, we examine sustainability from a perspective that has received far less research attention—attitudes that inform manage- rial decision-making. We develop a conceptual model that identifies six elemental categories of attitudes that can be held independently or aggregated to yield a meta-attitude representing the legitimacy of sustainability. Our model distinguishes among three types of internally held attitudes and externally perceived subjective norms: pragmatic, moral, and cognitive. We propose a refinement of Ajzen's (In: Kuhl J, Beckmann J (eds) Action control: from cog- nition to behavior, 1985; Organ Behav Hum Decis Process 50:179-211, 1991) Theory of planned behavior (TPB) that incorporates these sub-categories of personal attitudes and subjective norms. Practical implications are discussed including how organizations considering adopting sus- tainability programs might use the model as a conceptual tool to help achieve and assess program success.

Legitimacy and Organizational Sustainability

Environmental sustainability has begun to penetrate the business school curriculum. Whether it ultimately becomes a key component of managerial decision-making models will depend upon whether it is perceived as legitimate within the context of profit-making enterprises. This paper draws upon the cognitive psychology and organizational legitimacy literatures to develop a conceptual framework for operationalizing perceived legitimacy. This framework can be used to develop survey instruments and simulations that evaluate the effectiveness of various pedagogical approaches to integrating sustainability into business school curricula. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.

Are business students buying it? A theoretical framework for measuring attitudes toward the legitimacy of environmental sustainability

Scholars and managers have raised the question of how to encourage employees to perform discretionary pro-environmental behaviors at work, termed organizational citizenship behaviors toward the env...

Tom Thomas

Papers

Measuring corporate environmental performance

Legitimacy and Organizational Sustainability

Are business students buying it? A theoretical framework for measuring attitudes toward the legitimacy of environmental sustainability

Organization OR Environment? Disentangling Employees’ Rationales Behind Organizational Citizenship Behavior for the Environment:

Graduate Business Education and the Moral Development of MBA Students: Theory and Preliminary Results