Brazil Research Proposes Strategy for Stakeholder Capitalism Implementation
A lot of research over the past decades has focused on the theory, economics, and framework for stakeholder capitalism. This study addresses the implementation process of stakeholder management at the practical level based on research conducted in Brazil.Click here for links to information about EEA preferred engagement solution providers.
Understanding how firms manage multiple stakeholders and the processes used to implement a stakeholder value creation system in Brazil is the purpose of the recent paper, “Stakeholder Value Creation System: Understanding the Process,” by Silvia Ferraz Nogueira De Tommaso, Department of Administration, and Felipe Mendes Borini, School of Economics, Administration and Accounting, at the University of São Paulo, São Paulo.
The paper was recently published in Sustainability, Accounting, Managing and Policy.
The authors say they based their investigation on a conceptual framework extracted from a literature review. From there, they report that they “conducted qualitative empirical research designed as a multiple-case study through in-depth interviews with 47 people from 11 different firms” in Brazil.
The recommendations in their research, they say, “guide managers to align multiple stakeholders in the same direction to achieve superior performance and perennity.”
This paper proposes a framework demonstrating how a “firm can implement a stakeholder value creation system pointing to three processes: value creation, distribution, and capture. Value distribution mechanisms are drivers for both value creation and capture processes. The system is a set of multiple flow relationships between the firm and its stakeholders.”
Their proposed stakeholder value creation system is composed of seven elements: “1) walk-the-talk organizational behavior, 2) stakeholder business model, 3) societal non-attended needs, 4) stakeholder preference matrix, 5) stakeholder bargaining power, 6) retention of rents, and 7) governance mechanism. Managers may design their firm’s unique processes using these elements as drivers.”
From an economic strategy approach, they explain, “the firm’s economic value creation is the positive difference between the willingness of its customers to pay for its products or services and the total cost of producing those products or services through transactions. The firm’s value appropriation is the economic profit acquired from part of the effort and the economic value created in the transactions.”
According to the authors, “the existing literature is not clear about how a firm develops a stakeholder value creation system, which seems to be a central element in management. Besides, we cannot separate daily business activities into fixed and closed boxes. Business activities are intertwined and transversal within the whole company’s daily activities and operate as an open system rather than a cause-effect linear sequence production line. Thus, our research question is: how does a firm implement a joint value creation and appropriation system for multiple stakeholders?”
In this sense, they explain, “this paper aims to describe a firm’s processes to develop a stakeholder value creation system...The kickoff step is top managers’ mindset change, which pushes an organizational behavior reformulation and a business model redefinition. Both aspects incorporate societal issues, which are material themes in the stakeholder preference matrix. To ensure that the firm and multiple stakeholders take part in the stakeholder value creation system in a fair and trustworthy manner, top managers must learn how to manage stakeholders’ bargaining power and establish retention of rent mechanisms disclosed in transparent and reliable governance mechanisms.”
ESM Is Published by The EEA: Your Source for Effective Stakeholder Management, Engagement, and Reporting
Through education, media, business development, advisory services, and outreach, the Enterprise Engagement Alliance supports professionals, educators, organizations, asset managers, investors, and engagement solution providers seeking a competitive advantage by profiting from a strategic and systematic approach to stakeholder engagement across the enterprise. Click here for details on all EEA and ESM media services.
1. Professional Education on Stakeholder Management and Total Rewards
- Become part of the EEA as an individual, corporation, or solution provider to gain access to valuable learning, thought leadership, and marketing resources to master stakeholder management and reporting.
- The only education and certification program focusing on Stakeholder Engagement and Human Capital metrics and reporting, featuring nine members-only training videos that provide preparation for certification in Enterprise Engagement.
- EEA books: Paid EEA participants receive Enterprise Engagement for CEOs: The Little Blue Book for People-Centric Capitalists, a quick implementation guide for CEOs; Enterprise Engagement: The Roadmap 5th Edition implementation guide; a comprehensive textbook for practitioners, academics, and students, plus four books on theory and implementation from leaders in Stakeholder Management, Finance, Human Capital Management, and Culture.
2. Media
- ESM at EnterpriseEngagement.org, EEXAdvisors.com marketplace, ESM e–newsletters, and library.
- RRN at RewardsRecognitionNetwork.com; BrandMediaCoalition.com marketplace, RRN e-newsletters, and library.
- EEA YouTube Channel with over three dozen how-to and insight videos and growing with nearly 100 expert guests.
3. Fully Integrated Business Development for Engagement and Total Rewards
Strategic Business Development for Stakeholder Management and Total Rewards solution providers, including Integrated blog, social media, and e-newsletter campaigns managed by content marketing experts.
4. Advisory Services for Organizations
Stakeholder Management Business Plans; Human Capital Management, Metrics, and Corporate Sustainability Reporting for organizations, including ISO human capital certifications, and services for solution providers.
5. Outreach in the US and Around the World on Stakeholder Management and Total Rewards
The EEA promotes a strategic approach to people management and total rewards through its e-newsletters, web sites, and social media reaching 20,000 professionals a month and through other activities, such as:
- Association of National Advertisers Brand Engagement 360 Knowledge Center to educate brands and agencies.
