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You Can’t Please Everyone

Apr 07, 2008

A new 24-country study examining how businesses manage their relationships with stakeholders is underway and the Canadian results are soon to be published.

SFU Business professor Carolyn Egri, a member of the international research consortium conducting the study, says there are very interesting correlations between a company’s organizational structure and culture and its stakeholder, or corporate responsibility (CR) practices, abilities and successes.

Aggressively competitive companies, for example, struggle with community and employee corporate responsibility practices because these relationships require a different orientation and different competencies from the firm’s management. Innovative and change-oriented companies, however, respond well to customers, suppliers and employees.

Of most interest, perhaps, are the findings relating to environmental CR. Only hierarchical, bureaucratic companies seem to do this well, says Egri. “They have to be vigilant, controlling and monitoring,” she says. “You can’t do environmental CR in an ad hoc manner. If your organization does everything on the fly – is creative and innovative but doesn’t plan or document – then you’re going to have a real struggle in implementing environmental responsibility and making it a major focus in the organization.”

Overall, the researchers discovered that most organizations will find it easier to respond to certain stakeholders than to others, based on their corporate culture. Egri warns that corporations that don’t seek to achieve a balance in their organizational structure could be blind-sided.

“A successful, aggressive, competitive organization could get slammed with environmental lawsuits,” she says. “If they’re focussed on investors and cutting corners on the environment, they often don’t see the relevance of other stakeholder concerns,” she notes. “They’ll fight back rather than anticipating and integrating other stakeholder issues into their program.

For more information on Dr. Egri’s research, please follow this link.