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Stakeholders and Strategic Management: The Misappropriation of Discourse

Pete ThomasDepartment of Management

University of Central LancashirePreston, PR1 2HEUnited Kingdom

Tel: 01772 894727E-mail: P.Thomas@uclan.ac.uk

Abstract

Stakeholder theory has become increasingly intertwined with the strategicmanagement discourse. Stakeholder approaches to strategic managementhave been presented as capable of delivering enhanced business performanceand social responsibility, though empirical studies of such capability are rareand their results inconclusive, and the debate goes on. Critics of stakeholdertheory dismiss it as little more than a pipe dream arguing that, within thecontext of capitalist modes of production and the strategic management logicof action, stakeholding will not provide a means to radical or even reformistchange. This paper critically examines the relationship between stakeholdertheory and strategic management. It focuses on the ways in which stakeholdertheory is represented in popular strategic management texts and examines theintertextual relations between this material and managerial practice usingCritical Discourse Analysis. The paper reveals how stakeholding can become acrude means of manipulation which provides a surface gloss to managerialdecisionmaking but leaves fundamental inequalities unchanged. Further, it isargued that the concept may heighten these inequalities, especially withinorganizations, by providing managers with more sophisticated and rhetoricallypowerful means of organizational domination.

Critical Management Studies Conference, 14-16 July 1999Strategy Stream.

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Introduction

Stakeholder theory and the notion of stakeholders has become a pervasive element of theacademic management literature and is a key element of the strategic management sub-genre. The idea of stakeholding has also taken root in the more practitioner orientedliterature and in actual management. For example, several issues of Strategy, the monthlymagazine of the Strategic Planning Society, have dealt with the stakeholder managementdebate, following John Argenti’s dismissal of the concept as ‘...utterly discredited’(1996:7). In the ensuing debate the majority of responses (for example, Cleaver 1997;Fifield 1997) strongly defended the concept, and Francis attacked Argenti’s ‘...jaundicedview of human enterprise as a neo-classical fiction’ (1997:7). A similar debate has beenplayed out in more scholarly terms elsewhere (for example in a recent edition of theAcademy of Management Review), but the balance of opinion seems to come down on theside of stakeholder management as a route to more socially responsible corporate activity.This optimistic view of stakeholder management is exemplified in a recent special issue ofLong Range Planning (1998) in which the concept was strongly promoted and models forimplementation were postulated. One might say that the notion of stakeholding is onewhich has come of age, offering a framework for the analysis and management oforganizations particularly at a strategic level. However, just what stakeholding means andhow stakeholder theory should be used and to what ends are issues that are not clearlyagreed upon. As Donaldson and Preston (1995) suggest there is a somewhat diverseliterature on stakeholder theory, presenting different types of evidence and argument.Some material is descriptive, describing the way in which a corporation operates as thenexus for competing interests; some instrumental, offering stakeholder theory as a routeto enhanced corporate performance; and some normative, suggesting that all stakeholderinterests are legitimate and of intrinsic value and thus merit consideration on their ownterms (Donaldson and Preston 1995). Given this diversity a convergence on a positiveview may be somewhat premature.

In this paper I will demonstrate that this diversity of perspective has serious consequencesfor the way in which the concept is applied and developed, particularly within the strategicmanagement discourse. Specifically, I will show that it leads to discursive practices whichare at best ambiguous and at worst dishonest and manipulative, creating and sustainingdistortions and inequalities in organizational power relations. Far from leading to moreequitable outcomes for a wider range of stakeholders, I will argue that stakeholdermanagement damages the interests of those stakeholders whilst giving the impression thatthey are being attended to. Put simply, the economic/instrumental approaches tostakeholder management become masked by the values of the more moral/normativeperspective which are put to ideological use by those involved in the discourse. Ratherthan challenging structures of control in corporations, stakeholder theory lends weight toexisting structures.

The paper begins with a brief introduction to stakeholder theory with particular emphasison those developments which have centred on the strategic management discourse. Threebroad views of stakeholder management are evident in the literature: one which sees

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stakeholder management as a dangerous and illegitimate challenge to shareholder interests(the shareholder value perspective); one which sees stakeholding as a route towards morefundamental change which promotes equitable and more socially responsible organization(the stakeholder value perspective); and one which takes a more pragmatic, ‘managerial’middle course and sees stakeholding as a route towards more effective and efficientorganization and increased pluralism (de witt and Meyer 1999). The section then focuseson this ‘managerial’ conception of stakeholder theory and explores more carefully theassumptions and implications of the discourse and the contradictions and tensions theyengender. Following this review of the discourse, the paper then outlines the contributionthat critical discourse analysis (CDA) can make to our understanding of stakeholdermanagement. The CDA standpoint and approach is outlined making clear the politicaland methodological issues which make the framework of particular value in the context ofstakeholding. The paper then goes onto present two critical analyses of stakeholdermanagement discourse from within the broader strategic management discourse. One isdrawn from the academic literature on stakeholder theory and the other from an instanceof managerial practice within which the use of the stakeholder notion is evident. Thesubsequent discussion of these examples demonstrates the tendency for the normative and‘moral’ aspects of the discourse to be used to bolster strategic management decisionsthereby obscuring the inherent instrumentality of stakeholder management ideas. Thepaper concludes that the discourse which is partly aimed at changing existing structuresand outcomes from corporate enterprise, tends, when subsumed into the strategicmanagement discourse, to be misappropriated. Stakeholder management fails to providethe degree of critique necessary to mount a real challenge to inequitable corporatepractices and managerialist discourse, and instead it tends to become part of thatdiscourse.

Stakeholder Theory

Stakeholder theory has a long history which is connected to the debate on the role ofbusiness in society and to the issue of corporate governance. In simple terms stakeholdertheory addresses the questions of what and who corporations are for, or to whomcorporate managers owe a duty? Such questions are by no means new and they have beenaddressed by numerous writers (for example: Cyert and March 1964; Rhenman 1968;Freeman 1984; Freeman and Reed 1993) who have advanced a variety of views. Perhapswhat is relatively new is the interest that the notion of stakeholder has provoked in theorydevelopment and in managerial practice in recent years. Indeed, the term ‘stakeholder’has become a commonplace in the management discourse, but as Donaldson and Preston(1995) make clear what is meant by the term is disputed. They identify three forms ofstakeholder theory: descriptive, instrumental and normative.

Firstly, stakeholder theory is used to describe how corporations operate. For example,Wang and Dewhirst (1992) draw on stakeholder theory to describe and explain managerialbehaviour and thinking when managers are faced with competing demands and interests.Other empirical studies have identified stakeholder approaches to management practice(Clarkson 1991; Halal 1990) whilst the relationships referred to in the stakeholder

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literature, between managers, directors, shareholders, employees and customers, forexample, are increasingly the concern of specialists in corporate governance (Scott 1997).Secondly, stakeholder theory is used in an instrumental fashion, the basic idea being that astakeholder approach to corporate management will lead to better financial performance.The evidence that this is the case is far from compelling (Donaldson and Preston 1995)and a recent UK study suggests that any association is contingent on a number of factors,including levels of competitiveness in an industry (Greenley and Foxall 1997). Despite thelack of empirical proof of the value of stakeholder theory, the idea seems to have anintuitive appeal and it has been promoted by many contributors to the managementdiscourse. This has been particularly evident in the strategic management literature, wherethe importance and utility of identifying and analyzing stakeholders is often stressed(Freeman 1984; Harisson and St. John 1994; Johnson and Scholes 1999) and models,techniques and frameworks are developed for use by managers.

The third approach to stakeholder theory is normative and is rooted not so much in ideasof efficient and effective management but in moral and philosophical concepts. Thisnormative approach concerns ‘what should be’ rather than ‘what is’, on a moral ratherthan economic basis. Donaldson and Preston (1995) identify two central propositions atthe heart of most normative conceptions of stakeholder theory; one, that stakeholders areidentified by their interest in the corporation, and two, that the interests of all stakeholdershave intrinsic value. The role of corporations in society is seen as being to satisfy thedemands of a plurality of stakeholders not simply those of the stockholder group.Obviously, the contra normative view has also been advanced, perhaps most notably byFriedman (1970) but, in the main, the normative approach is associated with arguments ofdistributive justice and social responsibility that are reformist. On occasion this view isbolstered by the more instrumental perspective, with some commentators arguing thatsocial responsibility delivers business performance benefits in the long term.

Obviously, Donaldson and Preston’s (1995) analysis simplifies the field to a great extent.The division into three neat parts does not quite reveal the overlaps and complexities ofthe discourse. The authors also point to some conceptual difficulties with the theory, suchas how one might identify stakeholders; how one might conceptualize their relationshipwith the corporation; and how managers might respond to the stakeholders they identify.As a step towards dealing with such issues they propose a ‘managerial’ theory orphilosophy of stakeholding which goes beyond description, and views stakeholder theoryas instrumentally but, more importantly, normatively justifiable. This integration ofnormative and instrumental methodological strands has been re-stated more recently byJones and Wicks (1999), though the managerial ‘tag’ is replaced with the phrase‘convergent stakeholder theory’. Donaldson supports their position by emphasizing thecongruence such a view has with managerial thinking and logic: ‘It should be no surprisethat managers in the real world who endorse normative stakeholder theory also oftenendorse instrumental stakeholder theory, and vice versa’ (1999:241, added emphasis).However, to some critics such a managerial framework might be seen as an attempt to‘square circles’ or as deft footwork which tries to sidestep more fundamental problemswith the notion of stakeholding (Trevino and Weaver 1999; Freeman 1999). For example,

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Weiss (1998) points to problems with stakeholding when managers act as agents toowners of the enterprise. Firstly, such a situation legitimates the control of thecorporation by management and establishes independence from a range of stakeholders,including the owners, which creates a moral problem rather than solves one. It could beargued that if managers are appointed to act as the agents of owners, they have a duty toserve their needs rather than anyone else’s (Friedman 1970). As mentioned earlier, thisargument is often challenged by the view that in the long term owners interests willcoincide with those of other stakeholders, but in some ways this seems to duck theproblem rather than solve it. The second problem is that managers may not serve theneeds of owners, but may also fail to run the enterprise in even the general interest.Managers may be no more altruistic than the owners they represent and given their degreeof control over corporate affairs they may well act in ways which are self-serving(Williamson 1964; Nichols 1969; Orts 1992). The idea of stakeholding entrusts a highdegree of power with managers and places them in a position where they, rather thanowners, regulators or society in general, decide whose interests are legitimate and to whatdegree they should be satisfied.

The idea that managers operate as organizational legislators is enshrined in the term‘stakeholder management’ which we might regard as an enactment of stakeholder theory.Stakeholder management approaches have grown in popularity in recent years and havebeen championed by authors such as Freeman (1984) and Clarkson (1995). Theframeworks and models associated with this approach have also begun to appear inmainstream strategic management texts (for example: Johnson and Scholes 1999; Harrisonand St.John 1994; Lynch 1997) and are fast becoming an established feature of thediscourse on strategic management. Models and frameworks are proposed which helpmanagers identify stakeholders, understand their motives and the influence they may exert,and plan responses to stakeholder demands. Two assumptions seem to underpin thesemodels. First, is the assumption that managers are rightly, ideally and objectivelypositioned to make such an analysis, which, as I have already suggested, we cannot takefor granted. Second, is the assumption that, left to make this analysis, managers willarrive at some kind of balance between the needs of stakeholder groups (Miller and Lewis1991). For some commentators this is a simplistic argument which underplays the powerof different stakeholder groups to exert pressure on managers (Campbell and Yeung1991). Others have argued for the primacy of certain stakeholders, for example:shareholders (Friedman 1970; Argenti 1996) and consumers (Piercy and Cravens 1995).Empirical evidence on how managers optimize or prioritize the needs of stakeholders israther thin (Greenley and Foxall 1997) though it has been suggested that consumers mightbe the most important stakeholders (Posner and Schmidt 1984) but not necessarily forethical reasons (Aupperle et al 1985). The actual practice of stakeholder managementremains something of a grey area. In short, it would seem that the stakeholdermanagement literature tends to ignore fundamental questions on the rectitude of managersbeing the arbiters of stakeholder decisions and on their abilities to make such decisions,and leaves the balances to be struck between interests to the discretion of local managers.

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The ultimate justification offered by Donaldson and Preston for stakeholder theory is that‘...the most prominent alternative to stakeholder theory (i.e., the “management servingthe shareowners” theory) is morally untenable’ (1995:88). However, a key problem withthe stakeholder management literature is that it does not automatically provide a moremorally tenable alternative, for there is no guarantee that managers will act morally. It isunclear why managers using stakeholder approaches would not favour shareholders overall other groups or why their own interests would not influence the decisions to be made.Indeed, anecdotally we might think of managers acting both in their own interest and inthe interests of shareholders if we consider the holding of share options by managers. Atthis stage it might be tempting to think of stakeholder theorists as offering morallysuperior approaches to managers who, in the course of their work, corrupt the purity ofthe ideas. However, this is not a wholly convincing scenario, especially when we examinesome of the literature on stakeholder management. Whilst stakeholder approaches may becorrupted by practitioners it is also the case that much of the stakeholder managementliterature lends itself to such corruption, indeed some of it is inherently suspect. Theremainder of this paper explores these problems in more detail by examining both theacademic discourse concerning stakeholder management and management practice. To dothis I will use Critical Discourse Analysis for reasons I will now describe.

Critical Discourse Analysis

Critical discourse analysis (CDA) or critical language theory is concerned with identifyingthe social problematic of language and power (Woodilla 1998), examining, through textualanalysis, how language and discourse can create and sustain conditions of inequality anddomination. As such, it is unapologetically political; it is not dispassionate or coollyobjective, but is engaged and committed (Wodak 1997). CDA seeks to expose problemsand intervene in the interests of oppressed groups, though to what extent it is successful insuch interventions is difficult to say, and analysts are open to the accusation ofintellectualism and elitism when speaking on behalf of others. Nevertheless CDA offers anovertly critical approach to the study of organizations and in recent years it has been usedincreasingly (Grant et al 1998; Mumby and Clair 1997).

Within the CDA framework, discourse (the use of language in speech and writing) is seenas a social practice which shapes events and structures and is also shaped by them, that is,discourse is socially constitutive and socially conditioned (Fairclough and Wodak 1997).Discourse contributes to the constitutive process in three ways: by shaping social identities(for example, who is and isn’t a legitimate stakeholder); by shaping social relationships(for example, how managers respond to certain stakeholders); and by shaping systems ofbelief and knowledge (for example, by establishing stakeholder theory as a valid and usefulbusiness ethos). Discourse is socially influential and as such it is linked closely to power,producing and reproducing power relations as well as being influenced by them. In thisrespect discourse may have ideological effects, producing and reproducing unequal powerrelations and passing such imbalances off as ‘natural’ (Fairclough and Wodak 1997). The

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CDA approach aims to examine these political aspects of discourse in order to expose andchallenge the social and discursive practices which create domination and oppression.

Fairclough (1992) argues that in order to understand how discourse is used in such a wayrequires a three-dimensional analytical framework that examines: examples of discourse(usually referred to as texts1), the processes through which they are produced andinterpreted; and the structural and social conditions within which these discursive practicestake place. I have elaborated on the framework elsewhere (Thomas 1998; Thomasforthcoming) so will only briefly outline the form of Fairclough’s analysis here. In short,Fairclough (1992) recommends the coupling of close textual analysis with an examinationof the relationship between discursive practices and social structures. Texts, discursivepractices and social practices are obviously linked, with discursive practices generatingtexts within certain social contexts. The framework can be used to structure an analysis ofthese complex and overlapping phenomena. At the level of the text, Fairclough (1992)suggests that vocabulary, grammar, cohesion (the linking of clauses and sentences) andtext structure are important features for analysis. In terms of discursive practices, that isthe production, distribution and interpretation of texts, we should attend to force (whatthe text is designed to do), coherence (how it makes sense to ‘readers’) and intertextuality(how the text draws on other texts for support). Finally, at the level of social practice,features of context should be explored to see how they influence the discursive processesand how in turn they are influenced by those practices and the texts they produce. Theexact focus and form of analysis varies from discourse to discourse. In some textsvocabulary may be key and text structure less important; in some analyses of discursivepractice force may be of more importance than intertextuality, and so on. The analysisshould be adapted to the circumstances we encounter. The key aspect of the analysis,however, is making links between the three levels and exploring the interplay betweenthem, for this is perhaps the essence of CDA. To understand a text we should attend to itsform, but also the processes that produced it and the social context within which theprocesses took place.

CDA represents an appropriate framework for studying organizational discourse generallyand strategic management discourse in particular (Thomas 1998), but it also lends itselfdirectly to the critique of stakeholder management for the following reasons. Firstly,management is largely a discursive practice and stakeholder management is becoming partof that discourse. The key activity of managers is talk (Oswick et al 1997) but we shouldguard against undervaluing this as ‘mere talk’ (Marshak 1998), for talk is constitutive; ittakes place in order to make sense of situations, both for the managers and, perhaps moreimportantly in this context, for others (our stakeholders). Stakeholder discourse has thepotential to contribute to the constitution of organizational life and as such it is legitimateto investigate how it might do so.

Secondly, as stakeholder discourse is constitutive it is also political. Stakeholder theorycuts to key political issues, such as the distribution and use of resources, so it is aninherently political, as well as moral, discourse. Stakeholder management discourse isequally political, and might be regarded as the operationalization of stakeholder theory,

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both in terms of turning philosophical and abstract ideas into more applied concepts andframeworks, and then applying the results in managerial practice. Whilst stakeholdertheory can be presented as politically enlightened and morally superior thinking, by thetime ideas have been processed through stakeholder management discourse those featuresmay be lost. The danger is that rather bad behaviour may be hidden behind a rhetoricalshield of ‘goodness’, thereby misappropriating the moral discourse. CDA is anappropriate framework for examining such political issues.

This leads to a third reason why discourse analysis may be appropriate for the critique ofstakeholder management, that is, that it provides a means of dissolving the differencebetween ‘theory’ and ‘practice’ which can create problems in the management domain.Whilst I have referred to stakeholder theory and stakeholder management practice, there isno real distinction between the two, or at least the boundaries between them are blurred.As I have already written, management is a discursive practice, and so to is thedevelopment of management theory and ideas; there are clear commonalities betweenacademic processes and managerial practice. It is also clear that one not only influencesthe other but is designed to do so, though we should also be aware that the relationshipbetween academic ideas and managerial practice is a two-way one. Academics (andconsultants and ‘gurus’) promote ideas to managers; in a sense they help managersdevelop ways of making sense of situations, though discourse. One might go so far as tosay that academics script managerial discourse, as part of a ‘technologization’ processwhereby organizational discourses become more standardized, more ‘expert’ and morecarefully ‘policed’ (Fairclough 1996). Much of the academic discourse on managementand organization contributes unreflexively to such a trend, and in recent yearsprescriptions for discursive strategies have begun to feature in the literature (for example:Eccles and Nohria 1992). To understand management practice then, we need to alsoexplore the prescriptions which are made for managers and uncover the links between theacademic and practitioner discourse.

These points would support the view that CDA is an appropriate approach to the study ofstakeholder management, but it should also be noted that CDA has limitations. Firstly, theframework’s holism is difficult to work with; it appears to attempt an analysis of‘everything’. However, as Woodilla (1998) describes, most CDA is concerned withmoments of crisis where there is some breakdown in communication, or some ambiguity isevident. As a result, analysts tend to be selective but this leads to a second possibleproblem, that is, that selectivity will introduce bias. However, as mentioned earlier bias isnot a particular worry of critical discourse analysts who might feel themselves justified inbeing selective in order to confront the hidden biases that they believe to be more widelyevident in ideological discourses. Nevertheless we should perhaps be sensitive to the ideathat the texts selected for analysis may lead to the drawing of conclusions which are notrepresentative of the more general discourse. We need, therefore, to be very careful aboutwhat we select for scrutiny. Thirdly, and relatedly, the framework requires the delineationof links between the three levels which may be regarded as somewhat tenuous, butperhaps it is better to attempt such an analysis in the hope that it will work and that we can

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make the connections, than not to try at all. With these potential problems in mind let menow move on to use the framework to analyze the stakeholder management discourse.

A Critical Discourse Analysis of Stakeholder Management

Choosing Texts

The discourse on stakeholder management is large and growing and to conduct a CDA ofall texts would be impossible and it is necessary, therefore, to make some choices. Firstly,I have chosen to focus on two spheres of activity within which stakeholder discourse isproduced: academic work and management practice2. Secondly, I have ignored thestakeholder discourse which is oriented towards ideas of a more ‘macro’ political-economic type, for the sake of manageability but also because this discourse seems to havereceded somewhat in recent years3. The third choice concerns the selection of ‘texts’ foranalysis, and I have drawn one each from the academic and managerial discourses.Clearly, the choice of only two texts from the thousands available is problematic and mightseem somewhat arbitrary, but let me provide some justification for my selection. From theacademic discourse on stakeholder management I have chosen to examine StrategicManagement of Organizations and Stakeholders by Harrison and St. John (1994) for thefollowing reasons. Firstly, the text is frequently cited in the stakeholder managementliterature. It is unusual for a textbook to receive regular citations but this probably reflectsits stakeholder focus which differentiates it from many strategy textbooks. The text is wellknown, at least in the States and UK, and I think there is merit in analyzing a text whichreaders may be familiar with. Secondly, the emphasis on stakeholder management makesit of obvious relevance to my analysis. This is not to suggest that other texts do notexamine stakeholder management, many do, but perhaps not to the same extent. Thirdly,the text, whilst having an unusual focus for a strategy textbook, is fairly standard in otherrespects. Apart from the ‘up-front’ stakeholder emphasis the text covers the usual rangeof strategic management issues and is of a format which is not untypical of texts of thissort.

Making a choice of ‘text’ from the sphere of managerial practice is rather moreproblematic partly because of the huge number of ‘texts’ one could draw from, partlybecause of the oral nature of much management discourse and partly because gainingaccess to this often ‘fleeting’ management discourse can be problematic. One approach toavoiding such problems would be to use the empirical fieldwork of other researchers,however, there is relatively little detailed empirical material on stakeholder management(Greenley and Foxall 1997) and, of course, that which is available rarely presentsmanagerial discourse in a way which is unprocessed. Discourse analysis requires arelatively ‘raw’ data set to be available. A second approach would involve a programmeof original field research, but even this presents difficulties. Even the most qualitativeapproaches still tend to generate secondhand accounts of situations, often mediated andprocessed through interviews. Also, finding an appropriate setting for a moreethnographic study can be difficult, particularly if the focus is on a narrow theme which is

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usually the concern of senior management (Pettigrew 1992). A third approach is to accessorganizational documents within which discourse is recorded. This approach has theadvantage of looking at discourse which is specifically manufactured to achieve a specificaim or set of aims, and in being relatively stable, at least compared to the fluidity ofworkplace conversation. This is the approach I have taken to examine workplacediscourse and I have chosen a text which was produced by (or least on behalf of) RobertHorton when he became Chairman of British Petroleum.

Harrison and St. John - Stakeholder Management Ideas

Harrison and St. John’s text Strategic Management of Organizations and Stakeholders:Theory and Cases (1994) is a substantial strategic management textbook of 1024 pages,divided into ten chapters and forty-one case studies. The text shares similar characteristicswith many of its competitor texts in the strategy textbook market. For example, the text isbroken up into small sections, makes extensive use of headings, tables, diagrams and short,boxed sections which describe a strategic management example or application. Theauthors stress their desire to create ‘...a better teaching/learning tool’ (Harrison and St.John 1994:xiii, all quotes in this section are taken from this text so only page numbers willbe specified hereafter) so the text is not merely a book, but a tool or a piece of learningtechnology. The text is also designed to integrate a range of functional businessdisciplines and ‘...conceptually pull together the tasks of an organization’ (p.xii) forstudents on ‘...a typical business program...’ (p.xii). In a competitive market fortextbooks authors must take pains to differentiate their texts from each other and somenow come with CD-ROM’s or Web-Sites as well as supplementary teaching manuals andso on. Clearly, the production process and the publication process influences the formatof the texts and their ‘peripherals’ but in the case of this text there is also an apparentattempt to differentiate the content of the text as well.

Harrison and St. John argue that their text is ‘a response to the outcry for moreresponsible management’ (p.xii) principally through the use of stakeholder analysis andmanagement. There is clearly an intertextual element at play here as the authors refer toan ‘outcry’ which is of course part of the discourse itself. However, the authors do notmake explicit reference to texts which demonstrate this outcry; they assume we will eitherbe familiar with such texts or take their word for it. Further on Harrison and St. Johnmake clear that their route to more socially responsible management is throughstakeholder theory. Stakeholder analysis involves ‘identifying and prioritizing keystakeholders, assessing their needs and ideas, and integrating the knowledge gainedthrough these processes into the plans and activities of the organization’ (p.xii), whilststakeholder management includes ‘...communicating with stakeholders, negotiating andcontracting with stakeholders, managing relationships with stakeholders, and motivatingstakeholders to act in ways which are beneficial to the organization and its otherstakeholders’ (p.xii). This gives a flavour of the stakeholder management approach takenin the text and these quotes warrant further scrutiny particularly in relation to their earlierclaim to be promoting a more responsible approach to management. Firstly, the

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stakeholder analysis approach presents as unproblematic the idea that strategic managersshould be responsible for ‘prioritizing’ stakeholders. Apparently, it goes without sayingthat managers should take this responsibility in society; it is a ‘natural’ state of affairs andas such is part of the ideology of strategic management (Shrivastava 1986). A secondpoint to note is that once the analysis is done managers will take this knowledge andcreate the plans and activities of the organization. This suggests that managerial plans areactually organizational plans, and this brings to mind what Shrivastava (1986) describes asthe normative idealization of organizational goals. In such a situation managers speak forthe organization rather than just for themselves, but this is difficult to square with astakeholder approach which is careful to differentiate between groups, even within theorganization. The usual aggregate goals and plans of strategic management would surelyhave little value in such a differentiated organization.

When we examine Harrison and St. John’s view of stakeholder management a furtherpoint emerges. Whilst it seems obvious that managers would communicate, negotiate andcontract with stakeholders, it seems incongruous that they should motivate them. Indeed,‘...motivating stakeholders to act in ways which are beneficial to the organization...’(p.xii) seems to actually reverse the usual manager-stakeholder relationship. Two thingsstrike me as strange here. Firstly, when Harrison and St. John write of benefits to theorganization it is unclear what they mean by organization. If an organization is amechanism through which stakeholders derive benefits it seems erroneous to write of theorganization accruing benefits, for the organization is an abstraction not an entity whichcan enjoy benefits. My suspicion is that behind the use of the term ‘organization’ lurkunnamed stakeholders with interests that managers are keen to play down, possiblyshareholders, or possibly even themselves. Secondly, the idea that managers shouldmotivate all types of stakeholders seems rather odd. Motivation is a problematic notion(Thompson and McHugh 1995) and it is unclear what role managers take in motivatingeven their employees, never mind the much wider range of stakeholders Harrison and St.John refer to. A number of questions are left begging, for example: to what extent shouldmanagers motivate customers or suppliers or creditors; how do the managers of apolluting organization motivate the members of the environmental group that lobbies orprotests against it? This problematic use of the word motivation can be explored further ifwe examine the effects of substituting a different word for ‘motivating’ in the text; let ustry ‘manipulating’: ‘...[manipulating] stakeholders to act in ways which are beneficial tothe organization...’. Perhaps this comes closer to what stakeholder management is reallyabout.

This idea that stakeholder management is more about bending stakeholders toorganizational interests than running organizations to meet the interests of stakeholders isevident elsewhere in the text. For example, Harrison and St. John describe a matrix foranalyzing stakeholder groups (Savage et al 1991) within which stakeholders are assessedon their ‘potential for cooperation with organization’ and their ‘potential for threat toorganization’ (p.22). This generates four types of stakeholder, the cited examples of eachare given in brackets: ‘mixed blessing’ (customers, employees in short supply),‘supportive’ (directors, managers), ‘nonsupportive’ (competitors, unions) and ‘marginal’

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(activist groups, stockholders). Quite apart from the almost contemptuous language used,the clear message is that the best stakeholders are those who can be easily co-opted ormanipulated, and that directors and managers are the only people who can really be reliedupon. Again the term ‘organization’ is used as if it is an entity which can derive benefitsfrom stakeholders, and again one is left wondering just who the organization is serving, ifanyone. Further into the text Harrison and St. John (1994:62) describe how managersshould respond to stakeholders and once again rather defensive and hostile language isevident. Customers are to be complied with, within ‘...rational limits...’; competitorsconfronted; government lobbied; activists conformed with and offset with public relations;unions contracted with or eliminated. Such matrices and prescriptions for stakeholderassessment and management are to be found in other texts (for example, Johnson andScholes 1999), so Harrison and St. John are not alone in presenting this rathermanipulative view of stakeholder management, but is this what advocates of stakeholdertheory really have in mind?

How the text will be interpreted by readers is difficult to say, though Harrison and St.John themselves suggest that it will help them ‘...master strategic management’ (p.xii), berelevant to their career development and provide them with analytical techniques. Theemphasis is on the utility of the text, both in terms of facilitating knowledge acquisitionand providing practical methods for use in organizations; the text is not simply conveyingknowledge but prescribing techniques and approaches. This is the ‘force’ of the text andas most readers will be students, eager either to pass exams or to find material whichmakes their management work easier (or both) they are likely to be susceptible to it. Inaddition, in academic texts, the authority of the authors is also likely to support the forceof the material, as will the authority of the intertextual references highlighted in the text.

A final point worth making relates to the cultural context that the text is ‘released’ into.The text has much in common with other American texts, in that context is largelyignored; the lessons of the text are presented as being universally valid, not culturallybound. Others would suggest that this in itself reflects a cultural bias (Wilks 1990) whichis only now being challenged (Locke 1996). American models of organization do notalways travel well and this may influence the interpretation made of the text. In someparts of the world certain aspects may seem rather jarring, for example, the implicit anti-union sentiment of parts of the text and the apparent dislike of government regulation.We should remember, however, that texts constitute as well as reflect the world and theeffect may be to promulgate certain values and views of management which becomeassimilated into different cultural situations.

British Petroleum (BP) - Stakeholder Management Practice

On the 11th March 1990, on his elevation to the Chairmanship of BP, Robert Hortonwrote to each member of the corporation in order to convey ‘...the values and majorthemes my senior colleagues and I feel should underpin all our activities in the comingyears’. Statements attached to the letter outlined just what these values and themes were

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and how they were to be reflected in responsibilities to stakeholders. These organizationaldocuments will be the focus of my second discourse analysis and they represent a ‘real’organizational text within which the discourse of stakeholder management is to be found.

Five key stakeholders are identified: employees, customers, shareholders, suppliers and thecommunity, and the statement claims that the organization will be managed ‘...for the longterm benefit of all stakeholders’. A style based on ‘...openness, direct communicationand care and respect towards the people involved’ will be employed. The key aspect ofthis text is the vocabulary that is used throughout and to a lesser degree the stylisticfeatures of the text. The text seems carefully stylistically constructed to buildinclusiveness and to secure the confidence of all stakeholders, thus there is the prolific useof ‘we’ and ‘our’, the use of collective and collaborative terms such as ‘relationship’,‘partnership’, ‘teamwork’ and even ‘family’. In relation to each stakeholder a positive setof values is espoused. Customers can expect ‘integrity and fairness’, ‘good value’,‘satisfaction’ and ‘long-lasting beneficial partnerships’. The community is promised‘safety’, ‘involvement’ in education and local community activities, and ‘exemplarystandards of ethics’. Suppliers will enjoy ‘mutually beneficial relationships’ andshareholders will earn ‘an attractive return in terms of dividend and long term growth’.Finally, employees will benefit from a ‘trusting, equal opportunity, non-discriminatoryworking environment...challenging and exciting work...career development’ and a chanceto ‘strike a balance between their responsibilities to BP and to their home life’. (A shorttime afterwards 1150 employees were made redundant, presumably to allow them tospend more time with their families).

In terms of the force of the text, that is the effect it is designed to have, it might be arguedthat it is primarily a ‘public relations’ document, which ushers in Horton as Chairman.The text is high on rhetoric and, of interest here, draws on the stakeholder conceptexplicitly in order to appeal to its readership. The document ‘draws in’ the stakeholdergroups who read it, to build a sense of inclusiveness in much the same way a politician willskillfully deploy discursive features and resources to draw in voters (van Dijk 1997).Stakeholders are identified and a ‘wish-list’ of interests are promised by the seniormanagement team. Intertextually, the text draws on the stakeholder discourse, especiallyin terms of vocabulary, but also deploys a broader managerial discourse which claims toreplace control, bureaucracy and hierarchy with notions such as ‘partnership’ and‘teamwork’ (Heydebrand 1989). This post-Fordist discourse appears to foster autonomyand self-determination, but some have suggested that it may simply reaffirm managerialcontrol in a different way (Whittaker 1992). Certainly in this case it became evidentwithin a short period of time that managerial control remained very secure as a number ofstakeholder interests, particularly those of employees, were lost or eroded as Hortonunrolled a programme of corporate change, designed to ‘...simplify, refocus, make itclearer that we don’t need any longer to have hierarchies’4 (Horton, quoted in theFinancial Times March 20 1990). Thousands of jobs were lost, in Horton’s own words‘After 10 years, organizations build up an accretion of barnacles on their hull and need ajolly could scrape’ (Financial Times March 20 1990). Such sentiments are far removedfrom the ‘trusting’, ‘developing’ organization promised in the value statement and

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demonstrates very clearly that employees were not necessarily a prioritized stakeholdergroup. It seems that within BP there were two discourses in operation, one the publicpositive discourse exhibited in Horton’s letter, and the second, a more ruthless andaggressive discourse, which also became public through the media.

With only days between these apparently inconsistent statements being made one is leftwondering what the purpose of the value statement was. One answer might be that thestakeholder framework provided a suitably positive and ‘cozy-sounding’ image to bedeveloped, which in the short term might counter Horton’s reputation as a ruthless‘hatchet gentleman’, a title earned during his years with Standard Oil in the USA. Ratherthan being a real attempt to instill a stakeholder management approach at BP it seems tobe the case that stakeholder rhetoric was used to deflect criticism. In this sense thestakeholder discourse appears to be a screen for a more traditional and authoritarianmanagement discourse in which employees are reduced to the status of mere crustaceans,or inconveniences that must be removed.

Discussion and Conclusions

The cases described above give an idea of stakeholder management discourse in twodistinct but related spheres, on the one hand, the academic discourse on management andorganizations, and on the other, the practitioner discourse of people actually using the ideawithin organizations. The critical analysis of the discourse makes us sensitive to keycomponents and features of the texts and forces us to think about why the texts arefashioned in such a way and what impact they may have in the context in which they areused. Harrison and St. John’s text has many of the typical features of a text which isdesigned to produce answers to both examination and practical questions. The format andgenre of the text, coupled with its vocabulary and grammar create a text which is to beused both academically and practically. In this sense it is typically prescriptive andinstrumental, however it also has normative appeal, being almost evangelical in itspromotion of stakeholder approaches to strategic management. In delivering this messagemuch of the debate and critique of stakeholder theory is ignored, for such material wouldbe out of place in a standard text, and would also undermine the normative message of thetext. The BP case exploring discourse within a real organization reveals a similar lack ofreflectiveness or self-doubt on the part of managers. The stakeholder idea is used topromote a view of BP which is positive from every angle and standpoint. The vocabularyof the text is particularly telling in this respect, but if we also consider the context,especially Robert Horton’s reputation at the time he took over at BP, we mightunderstand the need to paint such a rosy picture.

In both texts I have highlighted problems with the way in which stakeholder managementis presented or used. These problems suggest that stakeholder management is largely arhetorical exercise, designed to obscure inequalities, problems and injustices within anorganization rather than challenge them. Harrison and St. John, in producing a textbookthat they hope will be widely read, will naturally use rhetorical devices and techniques to

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create a readable text that potential readers are attracted to. They are also careful toextract maximum value from the stakeholder idea in differentiating their text fromcompetitors. In Horton’s case the idea of rhetoric may seem less tenable, thoughincreasingly discourse analysts are suggesting that the approaches used to create writtentexts are also used in ‘authoring’ meaning more generally (Shotter 1993; Barry and Elmes1997). Intertextuality might also suggest that they will draw on academic texts asresources for this authoring process. Specifically, the idea that managers use rhetoric tobring about changes, reduce resistance to unpopular decisions or shape perceptions ofsituations has been clearly demonstrated by a range of studies (Watson 1994; Gowler andLegge 1996). Gowler and Legge (1996) describe managers using rhetoric to create anumber of meanings about social order, moral order and achievement, all of which aredesigned to cement the role of management amongst organizational members and createthe view that management is natural and necessary. This suggests a rather manipulativeuse of rhetoric, which on the above evidence seems to be the case with stakeholdermanagement. Indeed, in terms of stakeholder management, the rhetoric seems doublyproblematic, for it perhaps masks an approach to management which is fundamentally atodds with what is espoused, that is, stakeholder discourse masks and thereby sustainsexactly that which it is designed to challenge. However, the rhetoric only works to a pointfor, as Watson (1994) suggests, the gap between what is espoused by managers and whatis experienced by organizational members (including managers themselves) usuallybecomes apparent eventually. When this happens and the gap becomes impossible toobscure or ignore, a crisis point may be reached in the organization, such as that which ledto the eventual demise of Horton at BP.

The implications of this analysis of stakeholder concepts within the strategic managementdiscourse seem somewhat pessimistic. Whilst stakeholding may be seen as a more moraland equitable approach to running corporations, when subsumed into the strategydiscourse such potential seems lost. Instead of challenging existing structures andprocesses stakeholder management becomes part of those structures, and ismisappropriated from idealists by realists to be used in ways which corrupt the ideals.Weiss (1998) has delineated the conceptual cracks in stakeholder theory; in this paper Ihave demonstrated the practical and discursive effects of those cracks through examples ofhow the stakeholder discourse is used. Stakeholder ideas have dropped out of thepolitical-economic discourse recently, perhaps as politicians realized the difficulty ofdealing with the tensions and contradictions evident in the idea, or at least demonstrated amarked reluctance to address them. It seems that it may be time to do the same in themanagement and organization discourse and accept that this is not a feasible route towardsmore socially responsible and equitable corporate management. The notion has merelybecome part of the established managerial repertoire and its effect is the opposite of thatwhich was hoped for. This echoes the sentiments of Jackson and Carter (1995) on therelated issue of corporate governance which, they argue, is an apparent attempt by thecorporate sector to put its house in order, but in reality is merely another ‘...reactive andmanipulative defence of capitalism’ (1995:875).

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At this stage any conclusions drawn about stakeholder management should be tentative,and further research into the discourse is required to reveal how it is operating. Researchneeds to move beyond the conceptual and theoretical debates which have been a regularfeature of some of the more erudite management journals in recent years. Argumentsabout whether stakeholder theory is normative, instrumental or descriptive, and whetherperspectives can be integrated seems less important than discovering how stakeholderdiscourse is evolving in practice. By practice I mean not only managerial practice, but alsoacademic and consultant practice, particularly at points where those discursive practicesintersect. In this respect a focus on more abstract and scholarly discourses, which seem tobe written primarily for a fairly closed academic audience, is inappropriate. The focus forCDA of the stakeholder management discourse is perhaps more properly focused on theinterstices between more ‘practical’ academic and consultant discourses and thepractitioner discourse, for this will reveal more fully how stakeholder ideas are unfoldingthrough discursive practices. This requires further empirical research, but it should benoted that within a CDA framework, academic ideas and texts represent empirical data foranalysis every bit as much as organizational practice ‘texts’. Research which examines this‘theoretical’ discourse and the ‘practice’ discourse, and which explores the intertextualconnections between the two would seem to be the way forward. A broader analysis oftexts than is accomplished here could usefully be conducted. There are also some specificissues which could be explored by further empirical discourse research. Firstly, it wouldseem that the term ‘stakeholder’ has entered the general management lexicon and it wouldinstructive to examine the routine way in which the discourse is employed, if indeed its useis as routine as I suspect. Secondly, the way in which managers prioritize betweenstakeholders remains largely unexplored and CDA would seem to be an appropriate meansof examining such processes, providing the problems of access to ‘texts’ can be overcome.Thirdly, the bulk of analysis on stakeholder management has focused on businesscorporations, which is unsurprising, however, from my own experience of working withstudents from ‘public sector’ and not-for-profit organizations it seems that the terminologyis increasing being applied in such organizations. CDA would allow researchers toexplore why managers in these contexts are drawn towards the discourse and how itworks. Finally, in line with the political underpinning of CDA, further research on themisappropriation of the discourse is necessary so that lessons can be drawn for futurediscourses which may also be assimilated into the manipulative managerial discourse.

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Woodilla J. (1998) ‘Workplace conversations: the text of organizing’ In Grant D., KeenoyT. & Oswick C. (eds) Discourse and Organization. London: Sage. pp.31-50. 1 ‘Text’ in this context is used to refer to both written and verbal examples of discourse.2 In this paper I have ignored the influence of the consultant or ‘guru’ discourse so as to keep the scope ofthe paper within manageable bounds, though I acknowledge that to do so is increasingly difficult wherewe have what is in effect a management knowledge industry with a diverse set of players.

3 The New Labour leadership embraced the idea of the stakeholder economy briefly, drawing on Hutton’sanalysis which challenged the effectiveness and equity of the Thatcherite project. However, more recently

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the idea seems to have fallen out of favour, and Hutton suggest it is an idea which ‘...left the scene almostas soon as it had entered it’ (1998), replaced by the ‘Third Way’ (Giddens 1998).4 The loss of hierarchy is, of course a double-edge sword for employees. It may appear to foster autonomy,but might simply shift burdensome responsibilities further down the organization, and if you are part ofthe hierarchy that is removed, then the benefits are highly questionable!