Stakeholder concept

The concept of stakeholders is one of the most widespread in the scientific and practical arsenal related to CSR issues; it forms the basis of the “stakeholder theory of the firm” as an independent direction of general and strategic management, while remaining the ideological basis of CSR. The history of the concept began with the pioneering monograph of E. Freeman, professor at the Darden School of Business at the University of Virginia (USA), “Strategic Management: The Role of Stakeholders” (1984), as well as the research of M. Clarkson, founder of the Center for Corporate Social Performance and Ethics at the University of Toronto, dedicated to the study of the main objects of social responsibility of the corporation, which include “any individuals, groups or organizations that have a significant influence on the decisions made by the company and (or) are influenced by these decisions”*.

According to E. Freeman, the main stakeholders and potential beneficiaries from the activities of the corporation are:

• - owners of the company;
• - buyers of its products;
• - suppliers of various types of resources;
• - company employees;
• - local community;
• - various broad public groups;
• - state, etc.

Accordingly, the management of a company seeking to prove its social responsibility and win (or confirm) its legitimacy must conduct business in such a way that the interests of stakeholders are not only not violated, but are realized in the activities of the corporation. E. Freeman himself considered his concept not so much significant for theory, but important for practical work, for more effective management of the organization.

The stakeholder concept acquired particular significance at the beginning of the 21st century. after the publication of the collective work “The Development of Stakeholder Theory” (2002), which pointed out the need to move to a new era of management thinking and management theories based on the idea of ​​stakeholders, i.e. all subjects.

Based on the rational logic of setting management priorities from the position of their importance for the corporation, all interested parties are divided into two groups - primary and secondary.

Moreover, each group has a set of expectations, which in one way or another should be perceived by the company and influence decision-making.

The group of primary stakeholders includes those without whose constant participation the corporation cannot exist. These are shareholders and investors, employees, consumers, suppliers, as well as a group of public stakeholders - governments and local communities that create infrastructure and markets, issue laws and regulations that are binding, and the media.

Secondary stakeholders are various “interest groups” that are not involved in contractual relations and other transactions with the corporation and are not mandatory or primary for its existence.

A special name has been introduced for the group of primary stakeholders - stakeholders 9 . Stakeholders are all groups of people (or various organizations) whose contribution (work, capital, resources, purchasing power, dissemination of information about the company, etc.) is the basis for the success of the corporation (Fig. 3.4).

Rice. 3.4.

There are other approaches to the classification of stakeholders, which are based not on the corporation’s interest in the stakeholder, but, on the contrary, on the stakeholder’s interest or desire to influence the corporation’s activities. In this case, a stakeholder is considered as a group (individual) that can influence the organization’s achievement of its goals or the work of the organization as a whole.

For example, according to Mendelow's (1991) model, stakeholders are grouped based on their interests and power. Wherein:

• 1) power a stakeholder is determined by his ability to influence the organization (corporation);
• 2) interest a stakeholder is identified in his desire to influence the organization;
• 3) influence stakeholder can be determined by the formula “power multiplied by interest”.

Newbould and Luffman (1989) proposed a mixed grouping, dividing stakeholders into four main categories:

• 1) pressure groups financing the enterprise (for example, shareholders);
• 2) managers who manage it;
• 3) employees working at the enterprise;
• 4) economic partners. This category includes both buyers and suppliers, as well as other economic entities.

Each of these groups has different interests and power capabilities, which influences the level of tasks they set.

Following the logic of the corporate social activity model, D. Wood formulated three critical roles of stakeholders(stakeholders) 10 . Stakeholders:

• 1) are source of expectations determining the desirability or undesirability of the company’s activities;
• 2) feel the results corporate behavior of the company, i.e. are the recipients of corporate actions and their results;
• 3) evaluate how well firms meet their expectations and/or how firms' behavior affects groups and organizations in a given environment.

A unique approach to grouping stakeholders is found in I. Fassin, who distinguishes the following three groups.

• 1. The actual interested parties ( stakeholders), having “real positive and loyal interests in the company’s activities, are owners, consumers, employees, local communities. Their relationship with the company in terms of “power” and “influence” is generally of a mutually balanced nature.
• 2. “Advocates of Interest” ( stakewatchers), who, not having their own interest in the company’s activities, act in defense of real stakeholders - these can be trade unions, consumer societies, environmental organizations, etc. They have a certain power of influence on the company, while it cannot have a serious influence on them.
• 3. "Guardians of Interest" ( stakekeepers), who, being independent regulatory agents, do not have their own interest in the company's activities, but are capable of seriously influencing its activities. This is the state as a “total guardian,” judicial bodies, certification bodies, the media, etc. The balance of power and influence is shifted in their favor.

As a result, according to I. Fassin, a corporation should bear social responsibility only to real stakeholders. Thus, there is a certain narrowing of the circle of stakeholders, but this does not make the task easier for companies, since there are no unambiguous priority criteria both among real stakeholders and between representatives of other groups.

The main goals, interests and expectations of stakeholders are illustrated in Table. 3.1.

For different categories, it is important to choose the most effective methods of interaction. It should be taken into account that the expectations, interests and influence of stakeholders in each group can be (and most often are) opposing.

In terms of “location”, stakeholders are divided into two categories: external And internal.

Internal stakeholders include:

• - owners;
• - management (including the board of directors or corporate board);
• - company personnel;
• - trade union.

What internal stakeholders have in common is a sense of corporate involvement, which does not exclude the divergence of their interests. For example, management's desire for more autonomy is opposed to shareholders' need for more control; The desire of the staff for large salaries runs counter to management’s plans to reduce costs, etc. Contradictions can be resolved by bringing together the interests of different groups, for example, by building a motivation system focused on the results of the company’s activities as a whole. This demonstrates the art and professionalism of management.

External stakeholders are:

• - government departments;
• - local government bodies;
• - potential investors and shareholders;
• - customers, clients;
• - consumers of products;
• - suppliers;
• - competitors;
• - partners;
• - associations, unions, self-regulatory organizations;
• - scientific centers, educational institutions;
• - local community (including workers’ families), public organizations, etc.

Corporations use two main methods to build relationships with external stakeholders.

The first method is to establish partnerships. An important goal of this method is to build such relationships so that it is more profitable for the stakeholder to act in the interests of the company, since in this case he also achieves his own interests. At the same time, short-term interactions are important for the company in relations with certain stakeholder groups, and long-term interactions with others.

The second method is an attempt to protect the organization from uncertainty through the use of techniques designed to stabilize and predict impacts. These include: marketing research, the creation of special departments that control the areas of interest of important stakeholders (for example, compliance with laws, control over environmental safety), efforts to ensure conciliation procedures, advertising and public relations of the company, etc.

Table 3.1

Goals, interests and results of participants in the CSR model

Workers | Business | Power | Society as a whole
Basic goals
Striving for a decent life	Strengthening economic provisions		Sustainable development of territory and people
Main interests
Improving working conditions. Decent wages. Protection of life, health, property. Social package (medical, pension insurance, kindergartens, nurseries, rest homes). Improving the moral climate in the team. Respect for individual rights. Support for education. Support for creative endeavors	Improving the image of the enterprise. Expanding demand for products. Gaining access to international markets. Increasing attractiveness on the labor market. Improving working conditions, increasing employee motivation. Managing risks arising in the social sphere. Obtaining a “social license”	Obtaining means of control over the social situation in the region. Facilitating verification of compliance by employers and the region with labor legislation requirements. Encouraging employers to solve social problems, etc. Increasing the attractiveness of the region in the labor market; consolidation	Creation of new jobs. Creation of social facilities (kindergartens, schools, hospitals, sports facilities). Support for education. Support and holding of cultural and sports events. Relieving social tension. Improvement of populated areas. Reducing harmful effects

Ending

Over the past 20 years, managers have become increasingly interested in stakeholder relations. In this regard, various methods are being developed to study the influence of interested groups on the company, ways to manage relationships with stakeholders, taking into account their reputation and capabilities. In this regard, the division of CSR into “internal” and “external” has become widespread. Figure 3.5 reflects the main content of these concepts.

Rice. 3.5.

A. Carroll proposed using a matrix to personify the role of stakeholders, built taking into account the types (levels) of social responsibility (as in the CSR pyramid), which clearly illustrates the multi-level responsibility of each stakeholder, correlating it with the corresponding expectations, and also allows you to rank the composition by importance stakeholders and identify contradictions in their interests (Table 3.2).

Table 3.2

Stakeholder Matrix

Interested Type of social responsibility

The stakeholder concept, which has become widespread, like classical CSR theories, has developed in parallel in normative and positive directions. Within normative measurement the initial principles of the concept, its philosophical justifications correlate with the essence of CSR, make it possible to classify stakeholders in accordance with their role functions and analyze the issues of personifying the mutual responsibility of each stakeholder (clearly visible in the matrix).

In the light positive science and the development of practical approaches to the implementation of normative principles, the stakeholder concept develops instrumental approaches aimed at clarifying what needs to be done to get the desired result. This in turn brings researchers and practitioners to the institutional level of development. In particular, T. Johnson's article “Instrumental Stakeholder Theory: A Synthesis of Ethics and Economics” (1995) substantiates the position that certain types of ethical behavior lead to a firm's competitive advantage. The positive approach introduces into the system of CSR tools such organizational and legal actions as concluding contracts, problems of agency relations, transaction costs, managerial opportunism that complicates relations with specific stakeholders, etc. In the same row are generalized models of “strategic management of stakeholders” , which is a means of achieving the financial and other goals of the corporation, and “internal obligations to stakeholders”, which lie in the sphere of moral and ethical principles.

As an alternative to the considered instrumental concepts of stakeholders, the “CSR supply and demand model” (A. McWilliams, D. Siegel) should be called, based on the interpretation of CSR as a “form of investment” with corresponding expected “results”. According to the authors, there are two main sources of demand for CSR - the requirements of consumers of the company's products and the requirements of other stakeholders (investors, employees, local communities). By acquiring certain benefits and satisfying their expectations from the guaranteed high quality of the results of the activities of socially responsible companies (produced goods, services), stakeholders motivate corporations to engage in CSR.

The increasing role of state regulation of the economy, characteristic of modern reality, increases the interest of the state, acting as the primary stakeholder, in increasing the reliability and legitimacy of business. For corporations, increasing legitimacy is also important because it facilitates access to various resources and the ability to function effectively without becoming the object of strict regulation. The legally regulated status of the company, its state registration and socially significant activities confirmed by reporting, compliance with civil, labor, tax and other legislation are the conditions for its legitimation and recognition in various structures of its social responsibility.

There is a close connection between the legitimacy of a company and its social responsibility: to be legitimate, a company must constantly demonstrate various forms of its receptivity and responsiveness to the demands of the external environment, concern for its employees, environmental friendliness of production, high quality of products, etc.” The recognized legitimacy of the company is important for all stakeholders, as it acts as a certain guarantee of its reliability.

The natural desire of stakeholders to build relationships with reliable, legitimate companies is the basis for developing approaches that allow, to a certain extent, the use of elements of unification of requirements for them when concluding partnership agreements. At a certain stage in the development of the theory and best practice of organizing stakeholder interaction, the need and feasibility of using standardization tools 12 arose in matters related to the identification of companies for adherence to the principles of CSR. In other words, international and national standards regulating the corporate activities of companies began to be developed.

One of the first standards to be developed in 1997 was SA 8000 “Social Responsibility”, which defines a stakeholder as an individual or group of individuals related to or affected by the company's social activities: employees, consumers and investors.

Of fundamental importance is the creation of the international standard ISO 26000 “Social Responsibility” series, which at the end of 2010 was transformed into the ISO 26000:2010 “Guidelines for Social Responsibility” standard. It reflects a wide range of issues regarding the content and definition of the boundaries of social responsibility of any organizations (including business), the principles that this concept presupposes, the range of topics that determine the main directions of activity in this area (Table 3.3).

Table 3.3

Development of the stakeholder concept

	Source	Contribution to the development of terminology
	E. Freeman	One of the first definitions of the concept of “interested party” (stakeholder)
	SA 8000 “Social responsibility”	Definition of the term “stakeholder”, emphasis on groups of workers, consumers and investors, presentation of requirements for social responsibility to stakeholders
	GOST R 51897-2002 “Risk management. Terms and Definitions"	Emphasis on the terms “involved party” and “stakeholder” (the latter term is identical to the term MS ISO 9000:2005)
	YES 100 SES “Stakeholder Engagement Standard”	Definition of the term “stakeholder”, presentation of requirements and identification of stages of interaction with interested groups, determination of levels of interaction with stakeholders
	MS ISO 26000:2010 “Guide to social responsibility”	Defining the role of stakeholders in social responsibility, highlighting the stakeholder principle in social responsibility, recognizing the need to involve stakeholders, focusing on the relationship between the organization, society and stakeholders

In accordance with this standard, “social responsibility” is interpreted as the responsibility of an organization for the impact of its decisions and activities on society and the environment through transparent and ethical behavior that promotes sustainable development, including the health and well-being of society, takes into account the expectations of stakeholders, complies with applicable legislation and is consistent with international standards of behavior, moreover, it is integrated into the activities of the entire organization and is applied in its relationships 1 *.

Section b “Guide to the main aspects of social responsibility” of the standard discusses the main topics of social responsibility, each of which includes a number of problems. This allows any organization to determine its main priorities for its impact on society and possible actions to take measures to eliminate problems and implement its chosen social responsibility.

Concepts related to the actions of stakeholders were included in the Russian state standard GOST R 51897-2002 “Risk Management. Terms and Definitions”, according to which it is recommended to use the term “stakeholder” in the context under consideration, defining it as any individual, group or organization that can influence the risks of the organization and is themselves exposed to risks. According to this GOST, the involved party includes an interested party, but in its content it has a broader meaning.

The AA 100 SES standard developed by the Institute for Social and Ethical Accountability (AccountAbility) identifies three stages of stakeholder engagement:

• 1) interaction to reduce the severity of the problem, which occurs as a result of pressure and has a local effect;
• 2) systematic interaction to manage risk and better understand stakeholders;
• 3) comprehensive strategic interaction to ensure sustainable competitiveness.

Moreover, each stage reflects specific goals of interaction with interested groups.

The concept of international standards is based on the fact that the basis of CSR is the identification of stakeholders and close interaction with them. In order to make adequate decisions, the organization must initially identify the main stakeholders and develop individual algorithms for interaction with them. At the same time, interested parties can and should help the organization correctly determine the forms of joint solution to the most significant problems. When choosing the priorities of its social policy, an organization also has the right to focus on areas of activity not indicated by the stakeholders with whom it consulted.

The principles and best practices of CSR developed by the world community, elements of which are contained in international standards, can serve as the basis for the social programs of specific companies. But the activities of socially responsible business do not replace the responsibilities of the state but the fulfillment of the duties established by the Constitution to implement state social policy aimed at improving the quality of life of the population.

The publication of Robert Edward Freeman's work “Strategic Management: The Stakeholder Concept” (1984) marked the transformation of the stakeholder concept into a new independent theoretical direction in management - stakeholder theory, which forms and explains the company's development strategy from the point of view of taking into account the interests of stakeholders. E. Freeman's idea is to represent the essence of the company, its external and internal environment as a set of parties interested in its activities, whose interests and requirements the company's managers must take into account and satisfy.

In accordance with the requirements of stakeholder theory, modern companies perceive them not as an element of the external environment, but almost as their colleagues. Joint meetings are held with buyers, suppliers are included in joint planning groups, and temporary alliances are created with competitors. Particularly close interaction of companies with various groups of stakeholders is associated with the preparation of non-financial reporting (social report) of the company.

Currently, the tools for analyzing and identifying the external environment of a company have been described in sufficient detail and have proven themselves in practice, including such elements as stakeholder map, stakeholder interests table and support matrix X power of influence", an integral measure of assessing the business environment. In the course of their activities, consultations and dialogues with stakeholders are regularly carried out by large Russian and foreign companies operating in Russia, such as RAO UES of Russia, OJSC MMC Norilsk Nickel, OJSC Russian Railways, etc.

Stakeholder theory, according to E. Freemai, “encompasses a universal approach to doing business as a whole, considering it as part of a world united by morality... National and cultural characteristics of countries certainly matter, but I have not yet met a company with which would have no customers, suppliers and employees and which would not have relationships with the local community. I think that from a value creation standpoint, companies around the world are very similar.” 16

Thus, the stakeholder approach at the beginning of the 21st century. received its systematic design in theoretical developments, methodological materials and standards and began to be considered as an integral part of strategic management and a field of practical activity aimed at creating and maintaining sustainable competitive advantages of the organization, which is achieved through active interaction with numerous interested groups. This provides companies with long-term competitiveness and high standards.