Redefining the Corporation

by Post, James E.; Preston, Lee E.; Sauter-Sachs, Sybille

• ISBN13: 9780804743044
• ISBN10: 0804743045
• Format: Hardcover
• Copyright: 2002-05-01
• Publisher: Stanford Business Books

Summary

The modern corporation is an institution of enormous economic power and social impact. Corporations have grown in size and numbers all over the world because of their ability to mobilize productive resources and create new wealth. The evolution of the corporation has given rise to new opportunities and challenges that require a redefinition of the corporation and its objectives. The legitimacy of the corporation as an institution, its "license to operate" within society, depends not only on its success in wealth creation but also on its ability to meet the expectations of diverse constituents who contribute to its existence and success. These constituencies and interests are the corporation's stakeholdersresource providers, customers, suppliers, alliance partners, and social and political actors. Consequently, the corporation must be seen as an institution engaged in mobilizing resources to create wealth and benefits for all its stakeholders. This book presents a stakeholder view of the corporation in both theoretical and practical terms. Its central proposition is that organizational wealth is created (or destroyed) through a corporation's interactions with its stakeholders. Effective stakeholder management develops and utilizes relationships between a corporation and its stakeholders for mutual benefit, thereby accomplishing the fundamental purpose of wealth creation. Following the empirical maxim that "Corporations are what they do," the authors examine the stakeholder management practices of three major corporations: Cummins Engine Company, Motorola, and the Royal Dutch/Shell Group. These companies are very different, and their current stakeholder management policies and practices have evolved in very different ways. However, they share a common commitment to humanistic values and to continuous learning. Their varied experiences illustrate some of the opportunities and challenges of stakeholder management, and confirm the appropriateness of the stakeholder view of the corporation as a basis for strategy and policy.

Author Biography

James E. Post is Professor of Management at Boston University. Lee E. Preston is Professor Emeritus of the Robert H. Smith School of Business, University of Maryland. Sybille Sachs is Associate Professor at the Institute for Research in Business Administration, University of Zurich.

Table of Contents

List of Exhibits, Figures, and Tables	xi
Acknowledgments	xiii
Introduction	1	(6)
What Is the Corporation?	7	(28)
The Case for Redefinition	10	(12)
The Stakeholder Model	22	(10)
Conclusion	32	(3)
Organizational Wealth and the Stakeholder View	35	(22)
Organizational Wealth	36	(10)
Stakeholder Relations and Organizational Wealth	46	(5)
The Stakeholder View	51	(5)
Conclusion	56	(1)
Research Design and Critical Issues: Three Companies	57	(22)
Research Methods and Questions	58	(2)
Strategy, Structure, and Culture	60	(4)
The Companies under Study	64	(8)
Critical Relationships and Issues	72	(4)
The Challenge of Globalization	76	(2)
Conclusion	78	(1)
The Strategic Role of Values	79	(34)
Values, Ethics, Policies, and Practices	80	(3)
Implementing the Humanistic Commitment	83	(11)
Shared Values at Motorola	94	(10)
Cummins in the Community	104	(7)
Conclusion	111	(2)
Strategic Response to Competitive Challenges	113	(26)
Motorola: Managing by High Principles	114	(16)
Cummins Engine Company: Reinventing the Company	130	(8)
Conclusion	138	(1)
Strategic Response to Societal Challenges	139	(26)
Shell: Historical Background	140	(3)
Transforming Events: Brent Spar and Nigeria	143	(8)
Impact of the Events	151	(3)
The Camisea Project	154	(8)
Conclusion	162	(3)
Globalization: Multinationals in China	165	(32)
The Chinese Setting	166	(3)
Management Control and Motivation	169	(5)
Stakeholders and Guanxi	174	(12)
Operations of the Focal Companies	186	(9)
Conclusion	195	(2)
Implementing Stakeholder Management: Learning and Responding	197	(32)
Modes of Learning and Changing	198	(3)
Adaptive Learning: Cummins Engine Company	201	(6)
Evolutionary Learning and Renewal: Motorola	207	(6)
Transformational Learning: Shell	213	(13)
Conclusion	226	(3)
The Stakeholder View: Conclusions and Implications	229	(54)
Stakeholder Journeys: Three Firms	231	(7)
The Stakeholder View: Theoretical Implications	238	(6)
The Stakeholder View: Implications for Practice	244	(5)
The Stakeholder View and the New Economy	249	(5)
Conclusion	254	(5)
CASE STUDIES
Case Study A: Cummins	259	(6)
Case Study B: Motorola	265	(10)
Case Study C: Shell	275	(8)
References	283	(20)
About the Authors	303	(2)
Index	305