Freeman (1984) in his seminal book Strategic Management: A Stakeholder Approach, defined stakeholder(s) as any group or individual in an organisation who can affect, or is affected by the achievement of the organisation‘s objectives. Organizations are then situated in a web of relations – a social network (Granovetter, 1973) – to various entities which have legitimate stake: ―Be it the neighbors, employees, investors, insurance companies, government, the press, or others; stakeholders can exert pressure, provide important resources, and impose costs through protest‖ (Hoffman & Georg, 2013 p.18). Stakeholder theory endeavours to systematically articulate fundamental questions as: ―which groups are stakeholders deserving or requiring management attention, and which are not?‖ (Mitchell, et al, p.855).
In the context of climate change adaptation, the United Nations Framework Convention on Climate Change (UNFCCC) contributed significant conceptual and practical position on stakeholder approaches to represent a method in analysing context of organisations and institutions relative to the adaptation strategies.
“The Stakeholder approaches in general emphasize the importance of ensuring that the decisions to be analyzed, how they are analyzed, and the actions taken as a result of this analysis are driven by those who are affected by climate change and those who would be involved in the implementation of adaptations” (UNFCCC, n.d.).
19 The UNFCCC considered six stakeholder approaches which are relatively new (in terms of climate change adaptation) and consequently methods still demand improvement. Stakeholder approaches include: a) stakeholder networks and institutions (focuses on understanding those who make the decisions and how they relate to one another); b) scoping (allows users to identify tools and approaches that might be applicable to their particular focus); c) vulnerability indices (aims to provide metric for vulnerability and adaptive capacity); d) agent based social simulation (modelling approach to stakeholder networks and institutions); e) multistakeholder processes (are tools emphasizing dialogue on consensus building); and f) global sustainability scenarios (provide insight into future vulnerability and adaptive capacity and their associated quantitative indices might typically serve as an input for other approaches) (UNFCCC, n.d.).
Stakeholder management entails deliberate actions to address stakeholder concerns while simultaneously pursuing company objectives (Freeman, 1984). Accordingly, stakeholders are those entities and or issues which could make or break organisational sustainability (Garvare & Johansson, 2010). Thus, satisfying or exceeding the demands of stakeholders is both a crucial and daunting task for any organisation to succeed. ―Stakeholder satisfaction,‖ Garvare and Johansson (2010) continued, ―could be viewed here as a quotient between delivery and demands, where organisational sustainability is strengthened when: (i) organizational delivery, that is the quality of output to stakeholders, increases; or (ii) stakeholder demands on the organisation decrease, thereby reducing the constraints‖ (p. 742). When managing for sustainability, stakeholder engagement
…is argued to be a mechanism that in a normative sense may be able to assist business in rethinking its interests in favor of sustainability, but if oversold or implemented instrumentally merely to legitimate „business as usual‟, it is shown to
20 represent an ill-fated panacea (Collins, Kearins, & Roper,
2005 p.1).
With internal and external stakeholders influencing organisations‘ actions, institutions and companies operate in a pluralistic environment. Understanding organisations in a pluralistic context is tantamount to having better cognition of various stakeholders (Rowley, 1997; Friedman & Miles, 2002) – their interests and influences on the organization – towards improving management practices and effecting change.
Pluralist theory originates from the idea that organisations comprise of several competing interest groups, thus management must strive to gain the consent and co-operation of these different groups in order to function effectively (Pluralist theory, 1992). Jarzabkowski and Fenton (2006) described pluralistic settings as having multiple interests emerging from various organisational groups typically associated with fragmentations of organisational identity and multiple subcultures. With heterogeneity coming into play, the pluralist theory (1992) recognises conflict as central to pluralist approaches and considers it as unavoidable, although its roots are seldom considered; while in ―most accounts of pluralism, conflict is acknowledged as oiling the wheels of change‖ (p. 9).
Scholars use words and phrases such as ‗pluralist‘, ‗pluralistic contexts‘, ‗pluralistic organisations‘, ‗plurality‘ and ‗pluralism‘ to describe a characteristic which typifies ‗diversity‘, ‗heterogeneity,‘ ‗variety‘, ‗multiplicity‘ among others when they tackle organisational management (Glynn, Barr, & Dacin, 2000, Jarzabkowski & Fenton, 2006, Jean-Louis, Langley, & Rouleau, 2007). Pluralistic contexts as defined by Jean-Louis et al. (2007), refers to organisational contexts characterized by the three main features as ―multiple objectives, diffuse power and
21 knowledge-based work processes” (pp. 179-180). They argue that almost all organisations are pluralistic in nature, but hospitals, art organizations, universities, professional partnerships and cooperatives are cited as examples which strongly associate to their description (Jean-Louis et al., 2007).
Lowendahl and Revang (in Jean-Louis et al., 2007) contend that: [A]s organizations in many industries enter into various forms of collaborative arrangements, as matrices and networks penetrate organizational structures, and as knowledge workers play an increasingly important role in the economy, pluralistic forms of organization are becoming more and more prevalent (p. 180).
While pluralism provides benefits, it challenges at the same time conventional conceptions of strategic decision making (Jean-Louis et al., 2007). Cohen, March & Olsen (1972) described pluralistic organizations as strategically operating in an ‗organised anarchy‘ context wherein decisions follow a garbage- can process, i.e. problems, solutions and choices are uncoupled from one another. An organisation‘s ability to generate coherent patterns without any clear centralised intention (Mintzberg & McHugh, 1985), either through the cumulative activities of autonomous professionals, or through spontaneous convergence are strategic management practices formed around the pluralistic context (Jean-Louis et al., 2007). These latent organisational activities are consequently challenging the usual notions of strategy making.
Overall the literature suggests that the pluralistic context presents complex challenges for strategists. According to the pluralist theory (1992), organisations are not viewed as unified and harmonious wholes, but instead are viewed as loose coalitions which use power as the medium to settle conflicts. Furthermore, pluralism generates three types of problems for those interested in promoting
22 concerted organisational action: 1. Individual autonomy is often associated with collective paralysis; 2. Participative strategizing produces inflationary consensus; and 3. Diffused power and divergent objectives produce dilution in strategic change (Jean-Louis et al., 2007).
Some of the current theorizing and rational models of strategic management are of limited assistance in understanding or confronting organisational challenges precisely because they tend to assume away pluralism (Jean-Louis et al., 2007; Glynn et al., 2000). Organisational theorists have tended to emphasize the unifying principles that lend cohesion, focus, legitimacy, and identity; the result has been to problematise (or often overlook) the variety embedded in plurality (Glynn, Barr, Dacin, 2000 p 76).
Another noteworthy facet of stakeholder thinking is on the asset embedded in building relationships and partnerships formed from stakeholder engagement (Burt, 1997). These assets are an invaluable resource in managing risks and issues regarding the sustainability of organisations (Gabbay & Leenders, 2001). Social capital is the― ‗glue of connectivity‘ which holds relationships together, hence in an era of networked stakeholder relationships Andriof and Waddock (2002) argue that understanding social capital is vital to building and maintaining corporation- stakeholder connections.
Overall, the discourse on sustainability, sustainable development and stakeholder theory emphasizes the interdependence of each concept with one another. With these concepts and principles, humans have been at the core of embodying the strongest link to achieving a sustainable future. While it is true that ―[h]uman beings are at the centre of concerns for sustainable development‖ and that ―they are entitled to a healthy and productive life in harmony with nature‘ (Quental et al., 2011), the greatest responsibility of heralding a sustainable planet for this generation and to the next lies in the very hand of each human being. In
23 the end, it is the greater human activities that will make or break the goal for a