Stakeholder Attributes

The debate over a proper definition of stakeholders has even led to the discussion of what some refer to as attributes of stakeholders (Mitchell et al, 1997) or elements of stakeholders (Jonker and Foster, 2002). These have been

66 referred to as crucial for a proper definition or determination of who or what could be referred to as stakeholders (Mitchell et al, 1997; Agle et al, 1999; Jonker and Foster, 2002; Driscoll and Starik, 2004). These are features possessed by stakeholders that enable them to either claim or neglect their interest or stake in a firm or company (Neville et al, 2004). These are not to be possessed for the sake of it but are only meaningful and effective when used by the stakeholder that possesses them to increase its salience (Agle et al, 1999).

Stakeholder salience could be referred to as the degree to which the competing claims of stakeholders are given priority by managers of firms (Mitchell et al, 1997; Agle et al, 1999; Braun and Starmanns, 2008; Winkler, 2009; Mitchell et al 2011). Wolfe and Putler (2002) agreed that salience of a stakeholder depends on its combination of these attributes but noted that such a claim must be deemed urgent by the managers of the firm, otherwise it cannot contribute to the salience of such a stakeholder. The authors mentioned above have made various contributions to the discussion of stakeholder salience as being a result of the use of the various attributes, features or elements discussed below.

3.3.2.1

Power

This could be seen as the chance of an actor to carry out his or her will in a social relationship notwithstanding the opposition or resistance he faces (Weber, 1947). Pfeffer (1981, using Dahl,1957) defined it as a situation in a social relationship where an actor has what it takes to be able to have other actors in the relationship do what it requires of them even when they would not have ordinarily done. Salancik and Pfeffer (1974) agree with this view by asserting that it is the ability that ensures that its possessor brings about

67 whatever outcomes they desire. Etzioni (1964) had earlier said that there are three types of power such as coercive power, utilitarian power and normative power. How any of these types of power are exerted depends on the means of accessing them which could be via physical force or violence, material or financial incentives, and symbolic resources respectively. Mitchell et al (1997) insist that power is much easier to recognize when it is at work than it is to define, so any stakeholder that knows it has this attribute and uses it properly stands the chance of impacting firm behaviour. They further warned that it is not a static state that a stakeholder could hold onto forever as it could be lost as a result of its transitory and dynamic nature. They insist that in the same way it can be acquired, it can also be lost but they fail to make it clear how this could happen.

Nevertheless, Davis (1973) gives an indication of how this could happen when he asserted that in the long term, use of power in a way disapproved of by society could lead to its loss. Jonker and Foster (2002) pointed out that most of the explanations of organisational responses to stakeholder pressures have resorted to either resource dependency theory or institutional theory. Despite pointing out that these explanations using these theories have not really addressed the concept of power in the context of stakeholder relations, the authors failed to give their definition of what they view the concept to be. On the other hand, Eesley and Lenox (2006) explored stakeholder attributes and how they attract responses from firms by positing that the possession of resources aid the stakeholder to exert their power to get favourable responses from the firm. Their contribution was mainly the reference to resources as being

68 instrumental in the exercise of firm or stakeholder power in their relationship with each other, though this was not as a distinct attribute of its own.

From the views above about this subject, it can be seen that it has a lot to do with the ability which a stakeholder possesses that makes it dictate the pace of a relationship with others. It is also noteworthy to point that while a stakeholder might have coercive power, it might lack utilitarian power putting it in a position of doing what the other stakeholder that possesses the latter type of power wants done. There is also the possibility that a particular stakeholder could be in possession of more than one type of power at a point in time.

3.3.2.2

Legitimacy

This has been variously confused as being the same with the concept of Power which has been discussed above, with Mitchell et al (1997) pointing out that not all legitimate stakeholders are necessarily powerful in their relationship with others, nor all powerful stakeholders necessarily legitimate. To help clear this muddling up associated with these concepts, reference is made to Weber’s (1947) definition of the concept as the legitimate use of power, pointing out that both concepts are separate from each other. In his own broad definition, Suchman (1995, p.574) viewed it as “a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions”. This definition seems comprehensive enough to accommodate every aspect of what could be said to be legitimate. It implies that what a stakeholder does as a part or member of society has to be deemed acceptable to such a society; which will be based on a previously and clearly defined set of rules and norms peculiar to

69 such a society. This set of norms, values or beliefs can actually change from time to time, depending on what society considers being of importance to it at every point in time. In his reaction to Mitchell et al (1997), Phillips (2003) purported that this is the only attribute crucial to determining stakeholder status and further came up with two types. The first being Normative Legitimacy, which he said has to do with the type of Legitimacy possessed by stakeholders that have a direct relationship with a firm and so is officially recognised by managers. The other one is Derivative Legitimacy, which mainly is in the possession of stakeholders who do not have a direct relationship with the firm but can still affect the firm or stakeholders in direct relationship with it. He points out that stakeholders with this type of legitimacy usually resort to violence, so it could also be the same as coercive power.

Jonker and Foster (2002) agreed with power and legitimacy as elements that influence stakeholder salience, insisting that these can actually influence the outcomes of stakeholder relationships and so should be given due attention. However, they assert that these two should not be treated independently because legitimacy is actually supposed to be a part of power and so they removed it as an attribute or element. Phillips (2003) agrees that these should not be treated separately, because power is actually a part of legitimacy or at best an avenue through which the latter is acquired.

3.3.2.3

Urgency

This is the third attribute that could be possessed by stakeholders according to Mitchell et al (1997, p.867) and they defined it as the degree to which claims call for immediate attention. They noted that such claims cannot have urgency if

70 they lack time sensitivity and criticality. Time sensitivity is the degree to which delay by management in attending to the need or claim of a stakeholder is unacceptable, while criticality refers to how much the stakeholder regards its claim to be important to it. These two attributes of urgency put together contribute to the way a stakeholder’s needs or claims are regarded as being urgent by managers. However, it is expedient to indicate that the responsibility seems to lie with the stakeholder to prove to management that its claims or needs are both time sensitive and critical, otherwise it will not be taken seriously. This leads to the stakeholder’s needs remaining unattended to for as long as this attribute of urgency is lacking or dormant.

Jonker and Foster (2002, p.191) referred to criticality as “being used in the sense of being a significant, momentous, serious issue or even a defining moment”. They insisted that although most issues may seem to attract attention all the time in interactions between organisations and their stakeholders, there is always a particular one that calls for a certain level of urgency. This seems to have been an expatiation of the concept of Urgency as proposed by Mitchell et al (1997), even though they criticised the latter for treating the concept in passing and not giving it the required explanation. The issue of a defining moment seems to be key in their presentation of this concept, more so when it is viewed with a realisation that everything that happens in life has the impact of time. They viewed this moment as that point in time when the particular object of attention gets involved with the focal organisation. Such involvement, they propose then makes the organisation willing to expend either time or resources in order to take care of the particular case or issue being raised at that point in

71 time. This is also applicable to stakeholder relationships which are prone to take a different dimension because of the changing nature of humans. Jonker and Foster’s (2002) discussion of criticality as an attribute of its own right has not been accepted by authors (Braun & Starmanns, 2008; Winkler, 2009; Mitchell et. al, 2011), all of whom have addressed it as an aspect of urgency.

3.3.2.4

Rationality

Jonker and Foster (2002) discussed this with reference to Habermas and his thoughts on the theory of communicative action. Habermas (1984 cited in Kim and Kim, 2008) asserts that the theory of communicative action which takes place via the medium of everyday political talks results in mutual understanding of the self and others. This understanding clarifies individual interests, what others want and what is regarded as common good; so without this understanding it becomes impossible to have actors indulge in deliberations that lead to rational decisions. Barber (1984) notes that this kind of communication does not need and as a matter of fact usually does not have debates, arguments, challenges, setting of priorities and other ambiguities associated with formal meetings. It is also free from the constraints of formal procedural rules and predetermined agenda, making it nonpurposive, informal, casual and spontaneous (Kim and Kim, 2008).

Jonker and Foster (2002) spent so much time on the thoughts of Habermas that they failed to give a clear definition of what this concept means to them, especially in the context of stakeholder salience. However, one can conclude that the idea being put forward here is one of trying to point out that there cannot be cooperation between actors if they lack understanding of why they

72 are in the relationship and what they aim to achieve. Also, communicative action indicates that since it is not pre-planned or predetermined, whatever deliberations come out have a high degree of originality since the parties were interacting without suspicion of each other.

3.3.2.5

Proximity

Driscoll and Starik (2004) proposed this attribute based on its acceptance across various fields of academics, but noted it is not just about locations and geographical points in space or the environment. They argued that it could be viewed as a certain level of commonality shared by the parties concerned in issues, ideas, approaches, actions and activities and agreed with the definition of Soukhanov (1984, p.948) which saw it as “the state, quality or fact of being near or next in space, time or order”. Driscoll and Starik (2004) argue that the closeness that exists between the firms in the environment and people living in such places is an important factor, which makes it worthy of attention in the recognition and interaction of stakeholders. Hence, they believe that “the greater the proximity, the greater the likelihood of the development of stakeholder relationships” (p.63). This aspect of proximity is very relevant to this study because it brings to the fore the perspective of interests in the interplay of stakeholder relationships, not forgetting the place of information communication and technology (ICT) and globalisation in modern business relations and transactions. These two have made it possible for people to be in one part of the world and yet know what is happening at the other end, resulting in the popular saying that the world is now a ‘global village’ (Sullivan, 2008, pg. 58). Also, noteworthy is the ubiquitous nature of the environment, since everyone

73 (whether individuals or organizations) depend on the natural world for survival in one way or the other and how that results in what Driscoll and Starik (2004) referred to as ubiquitous stakeholder. Neville et al (2011) agrees with the importance of Proximity’s role in influencing stakeholder salience, but argues that it cannot be given the status of an attribute on its own as it can be treated as part of both power and legitimacy.

From the above discussion of what constitutes stakeholder elements or attributes, it is clear that these attributes cannot be possessed by stakeholders in isolation, as the relevance of an attribute is only exhibited in a stakeholder’s relationship with others. As a result, the determination of such an element or attribute (Power, Legitimacy, Urgency, Criticality, Rationality or Proximity) as being enough to impact a stakeholder’s salience is dependent on the stakeholders with whom it has interactions. Following up from this, in the next section we will look at the types of stakeholders that come out of the possession of the various elements or attributes as reflected by the table below;

Attribute

Definition

Power The degree to which a stakeholder can get its will done by others. Legitimacy The degree to which the actions and inactions of a stakeholder

are accepted by society.

Urgency The degree to which stakeholder claims call for urgent action. Rationality The degree of understanding possessed by the stakeholders. Proximity The degree of closeness between stakeholders: physical,

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Table 3.1: Summary of Attributes