Introduction. 1 See works of FREEMAN, R. E Strategic Management - A Stakeholder Approach, Boston,

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1 Introduction As a starting point for stakeholder theory, R. Edward Freeman published his book strategic management: a stakeholder approach in Since this time, in the development of stakeholder theory, it has received multiple iterative contributions, drawing on social network analysis (Rowley, 1997), resource dependence theory (Frooman, 1999), agency theory (Hill and Jones, 1992, Shankman, 1999), transaction cost economics (Ruf, Muralidhar, Brown, Janney and Paul, 2001), prospect theory (Jawahar and McLaughlin, 2001), game theory (Ponsatí, 2004), economic theory (Dansky and Gamm, 2004), dynamics (Windsor, 2010) and ambidexterity (Minoja, 2012). Although, at times, it has received criticism as not constituting a theory, there are now multiple stakeholder theories being instrumental, descriptive or normative with each providing a variation of who and what really counts (Mitchell, Agle and Wood, 1997). Despite which theory one may prescribe to, the consensus is that stakeholders remain an important consideration of the organisation and its managers. Freeman offered his book as a managerial approach toward strategic management, to improve the efficacy of strategy through methodical consideration of stakeholders. In this approach it was stated that stakeholders, by definition, can affect or are affected by the achievement of the organisation s objectives (Freeman, 1984, p. 46). Freeman offered a theory of the stakeholder environment, including its actors, observers and beneficiaries that has received vibrant and continued discourse for nearly thirty years. Today, the literature uses the term stakeholder theory interchangeably with stakeholder management 1 This paper details empirical case study research into managerial stakeholder management practices. The findings detail these practices in comparison and contrast to the various components of what may be termed strategic stakeholder management. These components include more encompassing means for stakeholder identification, saliency, value generation and measurement; and extend to managerial strategising for stakeholder positioning (centrality / density), influencing strategies (cooperative potential / competitive threat), ambidexterity (opportunities for exploitation / exploration) and dynamics (relational changes in time). Managerial approaches are analysed using qualitative semi-structured research methods in a single services organisation, with eighteen executive and senior managers as the participants. Following Minoja s (2012) recommendation for future research, these interviews investigated 1 See works of FREEMAN, R. E Strategic Management - A Stakeholder Approach, Boston, Pitman, JONES, T. M Instrumental Stakeholder Theory: A Synthesis of Ethics and Economics. The Academy of Management Review, 20, , DONALDSON, T. & PRESTON, L. E The Stakeholder Theory of the Corporation: Concepts, Evidence and Implications. Academy of Management Review, 20, 65-91, MITCHELL, R. K., AGLE, B. R. & WOOD, D. J Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts. Academy of Management Review, 22, , OGDEN, S. & WATSON, R Corporate Performance and Stakeholder Management: Balancing Stakeholder and Customer Interests in the U.K Privatised Water Industry. The Academy of Management Journal, 42, , HEUGENS, P. P. & VAN OOSTERHOUT, H The Confines of Stakeholder Management: Evidence from the Dutch Manufacturing Sector. Journal of Business Ethics, 40, , FREEMAN, R. E., HARRISON, J. S., WICKS, A. C., PARMAR, B. L. & DE COLLE, S Stakeholder Theory: The State of the Art, Cambridge.as examples for the inter-changeability of stakeholder theory with stakeholder management. 1

2 the factors and conditions that can lead a firm s managers to deviate from a strategic approach toward stakeholder management. Research objectives The objectives of this research project are: 1. To investigate the factors and conditions that can lead a firm s managers to deviate from a strategic approach toward stakeholder management; 2. To further understanding of the reasons why a manager may choose one approach toward stakeholder management over another; 3. To develop insights into managerial stakeholder management practices, processes and tools that may assist in the future direction and development of stakeholder theory. Research scope The scope of this research project is limited to: 1. A single research site, headquartered in Sydney, Australia, which manages operations throughout the state of New South Wales; 2. Semi-structured interviews with eighteen executive and senior management working within the research site; 3. Each interview requiring up to one hour in duration. Whilst follow-up interviews were available, they were not required. Research methodology A field-based case study (McKinnon, 1988; Ferreira and Merchant, 1992) qualitative research methodology informed this project using a semi-structured interview method (Rubin and Rubin, 1995). This method was selected as the research aims to interpret managerial approaches toward stakeholder management and semi-structured interviews are an interpretive approach (Burton and Steane, 2004) toward understanding phenomena. The focus of this research was to gain an understanding of the factors and conditions that could lead a firm s managers to deviate from a strategic approach toward stakeholder management. Field-based case study An individual Australian services organisation was selected as the research site. Given the data (i.e. interviews) and access (researcher s direct access to the site) this project was informed by a case study methodology. This field-based case study was developed (Ferreira and Merchant, 1992) by: a) The researcher having direct access to the research site; b) basing the research on actual organisational systems, practices and processes; and c) adopting semi-structured interviews. 2

3 Interview method Eighteen semi-structured interviews were conducted with senior management including Chief Executive Officer, Chief Financial Officer, General Managers, business unit Head Of and other senior managers. Each interview was recorded with a digital audio recorded (with the permission of the participants) and transcripts were produced (with the aid of a professional transcription service). These transcripts were then analysed using open, axial and selective coding via the constant comparison method (Goulding, 2005) through QSR Nvivo software. Research participants had an opportunity to express their views (Flick, 2002) by responding to a series of main, probing and follow-up questions (Rubin and Rubin, 1995), which aided further interpretation of responses. Interviewees were selected based on the perceived contribution of the particular manager to the development and implementation of the organisational (and business unit) strategy (Flick, 2002; Creswell, 2002; Goulding, 2005). That is, managers who held the title of Chief Executive Officer, Chief Financial Officer, Executive General Manager, Head of and Senior Manager were invited to participate. 3

4 Research findings This research project sought to identify the factors and conditions that can lead a firm s managers to deviate from a strategic approach toward stakeholder management. The strategic (instrumental) approach toward stakeholder theory, or stakeholder management, seeks to exploit and explore opportunities with competition, (stakeholder) influence strategies, networks, and value generation. Through qualitative research method analysis, three themes emerged as the reasons for managerial deviation. First, managers identified and determined their approach toward managing stakeholders according to their respective functional backgrounds, roles and responsibilities. For example, a government relations manager manages the government as a stakeholder. The manager manages his / her stakeholder, the government, by the structure established in his / her functional area, such as communications management. Therefore, stakeholder management is communications management. Following this logic, stakeholder management is synonymous with communications management, the manager has been managing communications for many years and thus, the new term does not add anything new. This finding suggests that a priori deductive reasoning can lead a firm s managers to restrict their approaches to working with stakeholders to more traditional managerial disciplines. Second, managers develop their plans and strategies for managing dyadic stakeholder relationships according to tactical or operational objectives. For example, a product development manager may identify suppliers, project sponsors and internal colleagues as his / her stakeholders. On this basis, stakeholder management and communication plans are developed to articulate the flow of resources between the focal firm and each of these parties for the purposes of bringing the proposed product or service to fruition. Absent from these plans are strategies relating to the broad network of stakeholders, their influencing strategies, competition and the distribution of value. This finding suggests that managers adopt a parochial view of their stakeholder environment for managing dyadic stakeholder relationships and communications. Third, through the interpretive approach of semi-structured interviews, interviewees did not adopt language commonly found through the strategic stakeholder management literature. This language extends beyond an entity being labelled as a stakeholder and includes saliency, influencing strategies, stakeholder environment centrality / density, dynamics and ambidexterity. The absence of this language was supported by an equal absence of a structured strategic framework. Managers remained silent in regard to how the focal firm managed its self proclaimed broad stakeholder environment, consistently, across all functional areas. This finding suggests that managers remain ignorant to the developments of the strategic (instrumental) stakeholder management approach. 4

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