Stakeholder capitalism principles and their understanding in the COVID-19 pandemic
| Principle | Definition by Freeman et al. (2007a, pp. 311–312) | Comprehension of the principle in the pandemic times |
|---|---|---|
| Stakeholder cooperation principle | “Value can be created, traded, and sustained because stakeholders can jointly satisfy their needs and desires by making voluntary agreements with each other that for the most part are kept.” | The principle reflects bilateral cooperation between the company and stakeholders during the pandemic in the forms of partnerships, joint initiatives and programmes directed at mitigating COVID-19 challenges and enabling value creation |
| Stakeholder engagement principle | “To successfully create, trade and sustain value, a business must engage its stakeholders. Almost every business transaction involves customers, suppliers, communities, employees, and financiers. Other stakeholders, such as media, additional civil society representatives, NGOs, etc. are often affected or can affect value creation.” | The principle suggests a company engaging with stakeholders by involving, consulting and informing them in the COVID-19 pandemic. Engagement can take place with the use of digital communications platforms. Realisation of this principle aims to recognise stakeholder needs and manage the relationships with them to maintain the trust and social license to operate |
| Stakeholder responsibility principle | “Value can be created, traded, and sustained because parties to an agreement are willing to accept responsibility for the consequences of their actions. When third parties are harmed, they must be compensated, or a new agreement must be negotiated with all of those parties who are affected.” | The principle shows how a company responds to the COVID-19 pandemic and supports stakeholders over this challenging period. It expresses, for instance, the commitment to act responsibly to ensure employee safety, well-being and proper work-life balance. The principle also reflects the company’s willingness to contribute financially to the solidarity funds during the pandemic |
| Complexity principle | “Value can be created, traded, and sustained because human beings are complex psychological creatures capable of acting from many different values and points of view. Individuals are socially situated and their values are connected to their social context.” | The principle expresses how a company, despite the diversity of situations, conditions or intensity of the COVID-19 pandemic, sought to adapt and tailor their responses to the health crisis considering the economic situation and social context |
| Continuous creation principle | “Business as an institution is a source of the creation of value. Cooperating with stakeholders and motivated by values, business people continuously create new sources of value.” | The principle reflects how a company and stakeholder involvement became a source of value creation due to the COVID-19 pandemic. The realisation of the principle refers to innovative spirit, digitisation progress, new technologies development, and other new sources of value creation that were necessary to take into account within overcoming difficulties caused the health crisis |
| Emergent competition principle | “Competition emerges from a relatively free society so that stakeholders have options. Competition is an emergent property rather than a necessary assumption to capitalism.” | The principle stresses balancing the tension created by simultaneous cooperation and competition of various stakeholders, of which some have power while others have urgency or legitimacy. The realisation of the principle reflects that stakeholders have options and can choose to resign from some benefits to the interests of other individuals, groups or the public good, particularly in the COVID-19 pandemic |
| Principle | Definition by | Comprehension of the principle in the pandemic times |
|---|---|---|
| Stakeholder cooperation principle | “Value can be created, traded, and sustained because stakeholders can jointly satisfy their needs and desires by making voluntary agreements with each other that for the most part are kept.” | The principle reflects bilateral cooperation between the company and stakeholders during the pandemic in the forms of partnerships, joint initiatives and programmes directed at mitigating COVID-19 challenges and enabling value creation |
| Stakeholder engagement principle | “To successfully create, trade and sustain value, a business must engage its stakeholders. Almost every business transaction involves customers, suppliers, communities, employees, and financiers. Other stakeholders, such as media, additional civil society representatives, NGOs, etc. are often affected or can affect value creation.” | The principle suggests a company engaging with stakeholders by involving, consulting and informing them in the COVID-19 pandemic. Engagement can take place with the use of digital communications platforms. Realisation of this principle aims to recognise stakeholder needs and manage the relationships with them to maintain the trust and social license to operate |
| Stakeholder responsibility principle | “Value can be created, traded, and sustained because parties to an agreement are willing to accept responsibility for the consequences of their actions. When third parties are harmed, they must be compensated, or a new agreement | The principle shows how a company responds to the COVID-19 pandemic and supports stakeholders over this challenging period. It expresses, for instance, the commitment to act responsibly to ensure employee safety, well-being and proper work-life balance. The principle also reflects the company’s willingness to contribute financially to the solidarity funds during the pandemic |
| Complexity principle | “Value can be created, traded, and sustained because human beings are complex psychological creatures capable of acting from many different values and points of view. Individuals are socially situated and their values are connected to their social context.” | The principle expresses how a company, despite the diversity of situations, conditions or intensity of the COVID-19 pandemic, sought to adapt and tailor their responses to the health crisis considering the economic situation and social context |
| Continuous creation principle | “Business as an institution is a source of the creation of value. Cooperating with stakeholders and motivated by values, business people continuously create new sources of value.” | The principle reflects how a company and stakeholder involvement became a source of value creation due to the COVID-19 pandemic. The realisation of the principle refers to innovative spirit, digitisation progress, new technologies development, and other new sources of value creation that were necessary to take into account within overcoming difficulties caused the health crisis |
| Emergent competition principle | “Competition emerges from a relatively free society so that stakeholders have options. Competition is an emergent property rather than a necessary assumption to capitalism.” | The principle stresses balancing the tension created by simultaneous cooperation and competition of various stakeholders, of which some have power while others have urgency or legitimacy. The realisation of the principle reflects that stakeholders have options and can choose to resign from some benefits to the interests of other individuals, groups or the public good, particularly in the COVID-19 pandemic |
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