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Stakeholders and Corporate Social Responsibility (CSR): A New Perspective on the Structure of Relationships Nobuyuki Tokoro Tamagawa University, 6-1-1 Tamagawagakuen, Machida-shi, Tokyo 194-8610, Japan. E-mail: This paper analyses the characteristics of relationships between stakeholders and corporate social responsibility (CSR) and stakeholders. Previous researches on relationships between enterprises and stakeholders have
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  Stakeholders and Corporate Social Responsibility(CSR): A New Perspective on the Structure of Relationships Nobuyuki Tokoro Tamagawa University, 6-1-1 Tamagawagakuen, Machida-shi, Tokyo 194-8610, Japan.E-mail: This paper analyses the characteristics of relationships between stakeholders andcorporate social responsibility (CSR) and stakeholders. Previous researches onrelationships between enterprises and stakeholders have demonstrated twocharacteristics, of ‘restriction’ and ‘transaction’, but they do not appear to shedmuch light on recent developments. This is partly due to the new trend of corporatedialogue with stakeholders, aimed either at addressing social issues or with a viewto acquiring a positive perception through such dialogue; we see this process as oneof ‘value creation’. Stakeholder dialogue is more established in Europe, where CSRhas developed most extensively, than elsewhere. Today, European enterprises aremoving towards a standardized system to formalize and evaluate the value of stakeholder dialogue. Japanese opinion, however, is not always in favor of suchstandardization, as in Nonaka’ Knowledge Creation Theory, which argues that allinnovation is produced through a creative process of solving contradictions andconflicts, rather than through applying objective processes. This paper discusses thecontext of stakeholder dialogue and the Japanese perception of its application. Asian Business & Management  (2007)  6,  143–162. doi:10.1057/palgrave.abm.9200218 Keywords:  stakeholder; restriction; transaction; value creation; dialogue; socialcontext Introduction Two central developments in the business world towards the end of the 20thcentury were globalization and the increasing dominance and impact of information technology (‘informaticization’), and these developments havecontinued to accelerate in the early 21st century. The principal triggers for thisincreasing globalization and informaticization have been the continuing structuralcollapse and/or shift to a market economy of the former Communist countries,and, starting in the USA, the IT revolution, based mainly on the spread of theInternet. Attention is thus now being paid to those changes continuing on from Received 2 April 2006; revised 9 August 2006; accepted 10 October 2006 Asian Business & Management,  2007 ,  6 , (143–162) r 2007 Palgrave Macmillan Ltd 1472-4782/07 $  the 20th century. Among Japanese corporations, Toyota, Honda, and Sony havebecome increasingly internationalized, and the current situation is such that, toquote the Honda CEO, ‘National borders have no meaning for corporations’( Nikkei Business , 6 December 2005–2 January 2006, 37).However, when management studies researchers try to establish a profile of business management for the 21st century, do they need to restrict their focusto the twin perspectives of globalization and informaticization in order toinvestigate the relationship with the performance of financial government, andto assess the issues in increasingly logical terms? The answer is ‘No’ — because,although globalization and informaticization are necessary conditions for 21st-century business management, they are not sufficient conditions.This point can be clarified by an overall assessment of whether the 20thcentury was a century just like any other. Material culture was at a higher levelduring the 20th century than in any previous century, but what made thispossible was a system of social economy based on mass production andconsumption, in turn made possible by rapid advances in science andtechnology. Within this system, corporations competed for sales and marketshare, and have followed a path of quantitative expansion. As a result, at leastin the developed world, an affluent society, with surpluses in both productionand consumption, has come into being. On the other hand, however, theeconomic system based on mass production and consumption has led to greatincreases in the wasteful consumption of resources and pollution, and thus todeterioration in the global environment. Since the 1980s, ever-increasingvolumes of scientific data have shown deterioration in the global environment,leading to increased international concerns about environmental crisis, andthus increasingly strong pressure on corporations to take environmental issuesinto account in their activities.The socioeconomic atmosphere that has come into existence is thus one inwhich it is considered unacceptable for corporations to concentrate solely onavoiding falls in sales and market shares, to the exclusion of concern for theglobal environment. The trend is that corporate globalization and informaticiza-tion have continued to strengthen, yet there has emerged an increasingly strongdemand for corporations to put into practise a stakeholders and corporate socialresponsibility (CSR) management system, in which equal weight is accorded tothe economic, environmental, and social aspects of their activities.As an introduction, the main point emphasized in the current article is that,in an analysis of the structure of 21st-century business management, the pivotalphenomena of management, globalization and informaticization cannot, as inolder corporate models, be satisfactorily evaluated solely through the filters of sales, market share, and/or return on equity, as there is the possibility of missing certain real changes in business management. In order for corporationsto continue in existence and achieve competitive advantage in the 21st century, Nobuyuki TokoroStakeholders and Corporate Social Responsibility 144 Asian Business & Management 2007 6  the most important thing is to be accepted and approved by society, and therequirements that society makes of companies have clearly changed. In otherwords, society is starting to demand that companies move their focuses fromquantitative expansion to qualitative improvement. This trend must not beoverlooked, and represents an important feature of the difference between20th- and 21st-century business management.In the present article, the focus is on analysing the relationships betweencorporations and society in the midst of this ongoing change. In this context,the relationships between corporations and society will be replaced by thosebetween CSR and stakeholders. The reason for this is that, from the point of view of a corporation, various stakeholders have connections with corporateactivities, and society is one of these stakeholders, and, furthermore, thequalitative improvements in management demanded by society are in effect thesame as CSR. For the present article, on the basis of a review of previousresearch about the connections between corporations and stakeholders andbetween CSR and stakeholders, and a theoretical evaluation of that research,corporate case studies were carried out, involving interviews with stakeholders,in order to identify the links to increasing corporate value, and to look towardsproblems that may result from these new connections. Stakeholders and Business Management The initial aim of this article is to review previous research on the relationshipsbetween stakeholders and business management, with procedures adding logicalassessments. In management theory, since Taylor’s development in 1911 of a theoryof scientific management, issues of management within corporate organization havebeen central to the field, and the relationships between a corporation and itssurrounding environment have been seen as outside the scope of concern. 1 The first case of research focusing on the relationships between corporationsand their external environments was Burns and Stalker (1961). They evaluated20 UK companies, and clearly showed that external environments affectedinternal organization. Their findings were that, if a company’s externalenvironment is stable, with few factors that cannot be predicted and/orcontrolled by the company in question, that company’s management systemtends to be highly regulated, with a clear hierarchical system for procedures,authority and responsibility; whereas if the external environment is unstable,with many unpredictable and uncontrollable factors, rules, procedure,authority and responsibility tend to be ill-defined, and authority tends to bediffuse, with a high degree of freedom in decision-making. Burns and Stalkertermed the former a ‘mechanistic management system’, and the latter an‘organic management system’. 2 In addition, Lawrence and Lorsch (1967) Nobuyuki TokoroStakeholders and Corporate Social Responsibility 145 Asian Business & Management 2007 6  surveyed 10 R&D, manufacturing and sales departments, and demonstratedthat differences in the external environments directly surrounding eachdepartment affected organizational structure, leadership, and aspirationswithin those departments. Research approaches of this type, concerned withthe relationships between corporate organization and external environment,are termed ‘contingency theories’, and represent a new wave in the field of organization theory that developed in the 1960s and 1970s. Contingency theorypresents an open-system perspective on corporate organization, with increasedemphasis on the effects on corporate organization of the external environment,in contrast with the older closed-system perspectives in organization theory, inwhich the relationships between inside and outside the corporation were leftout of the field of view.On the other hand, there has also been research on the relationships betweenthe external environment and the internal organization, with analysis from thepoint of view of transaction costs. The work of the systems-economists, such asWilliamson (1975), represents such a transaction-cost approach. Their findingssuggest that the relationships between a company and its environmentdetermine the mechanism for resource transaction. The two types of mechanism by which resources can be supplied are a market mechanism anda corporate in-house mechanism, and the factor determining which mechanismwill operate is the transaction cost. The decision-making personnel areassumed to select the mechanism that minimizes transaction costs.From the point of view of resource-transaction costs between corporateorganizations and external environment, Pfeffer and Salancik (see Kuwata andTao, 1998) developed the resource-dependence perspective, on the basis of theoretical research on the bi-directional connections. In this resource-dependence perspective, the structure of relationships between the organizationin question and other organizations explains the exchange of resources withother organizations, and the times at which such resource transactions occur.Using this model, resources controlled by the organization itself and by otherorganizations are compared, and, in cases of successful resource transfer, inter-organizational relationships are established. However, in these inter-organiza-tional transactions there are differences in the importance, scarcity, etc., of resources controlled by organizations, and for this reason the relationships canoften be classified as being subordinate or non-subordinate in type. In otherwords, organizations that control resources that are of marked importance toother organizations can take up a position of dominance with respect to thoseorganizations, which thus have a high degree of dependence on the resource-controlling organization. In this resource-dependence perspective, relationshipsof the above type are explained in terms of ‘power superiority’, and it isassumed that most organizations strive to reduce their dependence on otherorganizations as far as possible, in order to be autonomous. Nobuyuki TokoroStakeholders and Corporate Social Responsibility 146 Asian Business & Management 2007 6
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