James E. Post (Boston University) and Lee E. Preston (University of Maryland) are two leading scholars in the field of stakeholder theory. Sybille Sachs is the Head of the Center for Strategic Management: Stakeholder View of the HWZ (Zurich). They teamed up with to write a basic book about the “stakeholders' question.” The book is the fifth and last publication to emerge of the Redefining the Corporation Project. In the continuity of the founder Freeman's book (1984), the authors tackle the stakeholder question, particularly in the context of large multinational firms, from a strategic management view point. They stress that their book is not about the political concept of a “stakeholder society.” The book presents a stakeholder view of corporation in both and theoretical and practical terms since the authors' redefinition of the Corporation rests on the maxim that “corporations are what they Do.”
As the authors write it in the introduction, they:
… present the corporation as a collaboration of a multiple and diverse constituencies and interests, referred as stakeholders. Our stakeholder view of the corporation integrates stakeholder relationships within the firm's resource base, industry setting and socio‐political arena into a single framework.
Their core conviction is:
… that organizational wealth can be created (or destroyed) through relationships with stakeholders of all kind … Therefore, effective stakeholder management – that is, managing relationships with stakeholders for mutual benefit – is a critical requirement for corporate success.
The book is made of nine chapters. In the first chapter, the authors discuss about the definition of the corporation in its historical and current context. The second chapter “analyses the sources of organizational wealth, especially intangible assets and stakeholder relationships and the critical role of trust in modern organization.” Relatively to the stakeholder corpus, the authors originally compare the stakeholder approach with the resource‐based approach and industry structure theoretical explanations of the success or failure of a firm. The Chapter 3 presents the methodological framework used to examine the stakeholder policy and practices of three major corporations: Royal Dutch/Shell Group, Motorola and Cummins Engine Company. The Chapter 4 is centered on the strategic role of values at Cummins and Motorola. The Chapter 5 examines how a stakeholder strategy can generate competitiveness. This chapter is completed by the Chapter 6 that focuses on Shell's response to societal challenge. Therefore, stakeholder management appears to serve as well industrial strategies than societal strategies. Chapter 7 presents how the three companies' addressee stakeholder issues in China that is – at the same time – a geostrategic stake and a country that is not supposed to be favourable to stakeholders' practices. The Chapter 8 – following Freeman's tradition – is dedicated to implementing stakeholder management. The implementation is considered as a learning process. The authors distinguish three types of stakeholder implementation (or learning): adaptive (Cummins), evolutionary (Motorola), and transformational (Shell). The ninth and last chapter presents “The stakeholder view” as a comprehensive approach of the organizational wealth. After recapitulating the three case companies the authors develop theoretical and practical implications.
Roughly three main ideas can be at least picked up from this book. Firstly, the canonical affirmation that the very purpose of the business enterprise is to create wealth. Secondly, still canonically, the authors defend that firms exist thanks to a “licence to operate” given by the society. Therefore, the large and global corporation must take in account not only shareholders but also stakeholders (at least those who are crucial). Thirdly, stakeholder management can pay since it can contribute mastering costs, gaining competitiveness, internationalizing and improving organizational learning adaptability.
This book is a rich and complete classical presentation of the state of art about stakeholder management. This book can be recommended for students or professionals who want a basic book about stakeholder theory and management.
