New Stakeholder Theory: Evolving Stakeholder Capitalism for a New Era of Business
Sorenson Impact Center CEO Geoff Davis led a roundtable discussion at the event with a group of leading impact professionals to explore the theory of stakeholder capitalism and how it is evolving for a new era of business. Read highlights from the conversation, or watch the full discussion below.
Speakers
Jay Barney, Ph.D., Presidential Professor of Strategic Management and the Pierre Lassonde Chair of Social Entrepreneurship, University of Utah David Eccles School of Business
Allison Boxer, Ph.D., Managing Director of Academic Programs, Sorensen Impact Center at the University of Utah David Eccles School of Business
SarahKaplan, Ph.D., Professor, University of Toronto Rotman School of Management; Director, Institute for Gender and the Economy
Anita McGahan, Ph.D., Professor, University of Toronto Rotman School of Management; affiliated with the Burnes Center for Social Change at Northeastern University
Pushpika Vishwanathan, Ph.D., Assistant Professor, University of Amsterdam
In the course of a lively discussion, the panelists talked through several key issues impacting the next generation of stakeholder capitalism and how they see it playing out in practice.
On dealing with conflicting stakeholder interests:
The original notion of stakeholder capitalism often touted the idea of “win-win”: That we could do good while making money, no sacrifices. This new version of stakeholder capitalism acknowledges that all issues won’t be “win-win” — in order to prioritize one value, sometimes another value must be de-prioritized. Today’s companies and leaders must figure out how to identify which values to prioritize; be willing to make tough strategic decisions to uphold them; and to articulate these values to unify all stakeholders around those decisions.
Kaplan: Companies often don’t know how to deal with the fact that there are multiple stakeholders who have different interests — and a single stakeholder may have multiple kinds of interests. Even shareholders aren’t totally profit-driven and returns-oriented; they often invest with their values. As an organization, how do you deal with those trade-offs? Most companies have some kind of innovation function for creating new products and services, and they put their best and brightest people on those innovations. And yet, when it comes to things other than the “core business,” such as social responsibility or the environment, suddenly we don’t understand them as innovation challenges. If you can get people oriented toward this as core to their business, you can turn all of these into innovation challenges. Innovation is still extremely hard, but we’ve spent decades as managers learning how to do it. What if we took those skill sets and applied them to these other contexts? That’s been missing because impact issues have been treated as side issues.
Read the full conversation here: New Stakeholder Theory: Evolving Stakeholder Capitalism for a New Era of Business