If you are attending the SMS conference in Paris, please consider joining us for the following session:
Rethinking the Fundamentals: Strategy Theory from a Stakeholder Perspective
Session chair: J.W. Stoelhorst, Universiy of Amsterdam
Panelists: Jay Barney, Russ Coff, Anita McGahan, Maurizio Zollo
Date Sunday, Sep 23; Time 09:30 – 10:45; Room Forum B
What would, could, or should strategy theory look like if it were to explicitly take a stakeholder perspective? Theories of strategy, either implicitly or explicitly, typically treat the firm as a unitary agent, or as a nexus-of-contracts in which managers are seen as the agents of shareholders. At the same time, strategy scholars are increasingly rejecting these views in favor of a stakeholder view that treats the firm as a collective enterprise in which people both cooperate to create value and compete to appropriate that value. This session discusses the extent to which adopting a stakeholder view requires changes to our theories, their assumptions, their dependent variables, their explanatory logic, and their predictions.
Stakeholder theory was originally conceived as a theory of strategy (Freeman, 1984). One of its aims is to offer an alternative for standard economic conceptions of the role of firms and their managers in a capitalist system (Freeman et al., 2007; Freeman et al., 2010). On the one hand, this sets stakeholder theory apart from most other strategy theories, which tend to adopt an economic perspective. On the other hand, even strategy theories that are explicitly grounded in economic thinking tend to deviate from at least some of the standard assumptions of orthodox neoclassical economics (Rumelt et al, 1991). Seen in this light, stakeholder theory can be seen as an integral part of a larger quest that has arguably defined the strategy field since its inception: the quest for theoretical foundations that can increase the realism and relevance of strategy theories as compared to mainstream economics (Teece and Winter, 1984).
Among other things, strategy theories deviate from neoclassical economics in focusing on market imperfections, opening up the black box of the firm, and/or taking a disequilibrium view. What stakeholder theory adds is the rejection of a unitary agent view of the firm, as well as the rejection of the alternative view, developed in agency theory, in which managers are the agents of shareholders. Instead, stakeholder theory suggests a view of the firm as a collective enterprise in which people both cooperate to create value and compete to appropriate that value. Strategy scholars are increasingly adopting this view, but how does that conceptual move mesh with our established theories? Does a different view of the firm also require a rethinking of these theories? If so, what is the rethinking that is in order?