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Product Number: 03610
Price: Members $42.50 Non-members $47.50
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Staff contact
J. Paul-Émile Roy, CA
research.studies@cica.ca
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Executive Summary
Project objective
This research was sponsored by the CICA's Canadian Performance Reporting Board. It was a joint initiative between the Centre for Innovation in Management, Simon Fraser University, and the Schulich School of Business, York University. The research report examines three cases from three different industry sectors. In each case the report explores a desired business outcome and how social capital in stakeholder relationships contributed to the achievement of that outcome. It draws a number of conclusions: - The creation of business value from stakeholder relationships is contingent on a self-reinforcing cycle comprising: (i) identifying strategically relevant stakeholders, (ii) improving the quality of those relationships, (iii) recognizing and fostering opportunities to maximize the benefits of social capital, and (iv) continued or deepening relationships.
- Specific relationships will be important for achieving specific goals. Given the networked nature of a corporation's stakeholder relationships, however, relationships are often overlapping and synergistic and cannot be considered in isolation.
- The most crucial behaviours for building high quality relationships include proactive and transparent communication, consistency and follow through.
- The benefits of social capital include: (i) access to information, (ii) influence and (iii) adherence to group norms/solidarity. The extent to which social capital creates value depends on the context, the perspective of the stakeholder and the nature of the corporation's strategic goals.
- While it is not possible to measure the value of a corporation's social capital in the abstract (that is, outside a particular context or hoped-for business outcome), it is possible to assess the quality of a corporation's stakeholder relationships and the potential contribution of social capital to the creation of business value.
- The measures used in the study to assess the quality of stakeholder relationships could be used to broaden "balanced scorecard" type business performance measurement systems.
- While further empirical research is needed to develop more generalizable observations, the researchers believe that qualitative measures pertaining to the presence or absence of social capital (and its antecedent conditions) could, in due course, allow external analysts to assess to what extent corporations are capable of leveraging relationships with their key stakeholders and thereby better predict future corporate performance. This could have profound implications for the way corporations and their prospects are valued.
Measuring the Business Value of Stakeholder Relationships - Part One
CAmagazine, August 2001, p.29, Pathways to competitive advantage by Ann Svendsen, Rob Abbott, Robert Boutilier and David Wheeler
CAmagazine, August 2003, p.33, A model relationship by Ann Svendsen and David Wheeler
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