Date of Award

2012

Document Type

Thesis

Publisher

Edith Cowan University

Degree Name

Master of Business

School

School of Management

Faculty

Faculty of Business and Law

First Supervisor

Associate Professor Llandis Barrat-Pugh

Abstract

This thesis confronts existing bilateral models of stakeholder management. It is based upon the premise that existing models place insufficient value upon the mediating power of individuals and small groups imbued with social capital within an organisational stakeholder environment. Initially, this study explores and maps the complex theoretical relations between organisations, stakeholders and social capital to construct an argument for addressing stakeholder management from a more plural and holistic perspective. The thesis suggests that rapid advances in social media and social interconnection now enables the sentiment of individual stakeholders to aggregate and rapidly form issue-specific interest groups that harness social capital to influence or act upon organisations. The thesis then continues to suggest that such social aggregation produces boundary spanners who in turn act as attractors for continued group aggregation, leading action against organisations. This is an important re-conceptualisation because organisations will need to recognise and manage this growing phenomenon. The thesis then explores the James Hardie asbestos compensation issue as a revelatory and purposeful case study of this emerging phenomenon. This case illustrates that dissonance may arise between an organisation and its stakeholders where an expectation gap develops between an organisation's activities and community standards - dissonance that may grow within a community, instigating group action that may have a significant impact upon an organisation. Having conceptualised and illustrated this emerging phenomenon, the thesis then moves on to describe the results of a limited pilot field study that explores the first stages of this conceptual development; the development of individual community sentiment about organisational action. The James Hardie case is used as the basis of this investigation. The investigation is based on a historical quasi-longitudinal stakeholder survey of stakeholder perceptions about, and community disposition towards, the James Hardie case through quantitative and qualitative data. Structurally, the research utilises Carroll's (1979) Corporate Social Performance Model as a framework to explore the development of social capital within the stakeholder environment, examining stakeholder perceptions on four levels of organisational activity: economic, legal, ethical and discretionary. The study examines and provides evidence of the first stage of the development of the stakeholder-organisation expectation gap and the growth of community sentiment, a pre-requisite for the subsequent formation of issue-specific interest groups and boundary-spanner action against an organisation. This thesis makes a contribution to current understanding of stakeholder management by arguing for and proposing an extended plural model of stakeholder management - a model that incorporates the emerging reality of social media enabling the aggregation of individual sentiment into social capital, and subsequent community activity. In addition the thesis shows how the existing theory of Carroll provides a framework to investigate how stakeholder sentiment initially develops. In doing so it paves the way for subsequent research to further explore the proposed extension to theory; how social aggregation around issues of sentiment develops and how boundary spanners aggregate that sentiment and convert it into action. In terms of organisational practice, the study concludes by asserting that organisations should engineer a more strategic approach to managing stakeholder relations in order to harness the embedded social capital of community stakeholder groups. The ongoing saga of the James Hardie case illustrates what may happen if organisations do not take such action.

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