I think your point about “Democratic Innovation” connects with the potential that internal communication has to manage change management programs and (nowadays even more) knowledge management programs. This is clearly about action!

Thanks again to all for participating. I think this reflection makes us think that there are many ways to be sucessfull but over the long run those organisations who can balance the interests of the different stakeholders have a competitive advantage to which PR can decisively contribute. As Paul and Toni rightly put it, stakeholder’s importance (including also shareholders as a type of stakeholders) is a situational concept and varies with the specific context.

“At Nestlé we recognize that our success depends on creating value for people – from the farmers who supply our products, to our employees, to our consumers and the communities where we operate”, said Nestlé Chairman Peter Brabeck-Letmathe.

I would agree with this view and see it as an and-and situation. Shareholders and Stakeholders relations are interrelated and equally important.

Very interesting debate. Thank’s for initiating it Joao!

I’d also point out that the Edelman Trust Barometer indicates a movement to stakeholder (over shareholder) relations, too. In all sectors, not just government and NGOs. I had the privilege of hearing Richard Edelman speak in Toronto in February (specifically on Canada Findings) and he spent a great deal of time on stakeholder relations.

I do admire your passion and commitment to debating the issue, though. And now you have Toni’s love to boot–that’s a significant accomplishment!

Brigit Law
Storyteller
Brussels

I agree with all that Heather said in her comment.

João, it has been a great discussion – thanks!

Toni mentions “using” employees and Paul seems also to see those who do not have a recognised “stake” as needing controlling rather than engaging with.

Organisations do not have a right to exist in (democratic) society and do so only because the public enables them to do so. This general public has the power to take action and affect any organisation’s achievement of its goals. Such people should not be viewed as passive receivers of corporate messages nor should they be seen as open to manipulation by PR or management.

Specifically, although employees have a dependent relationship with employers (particularly in the current economic situation), any attempt to use them as a fake ambassador is unlikely to be either successful or sustainable.

Surely the best form of public relations is that which is credible and which stimulates genuine support from publics, not coerced transmission of corporate speak.

1. “The stakeholder model of the firm” was conceptualised long ago. Freeman in 1984 was one of the first to address it. But Post, Preston and Sachs in 2002 also added to the process of “Redefining the Corporation”. According to these and other authors, saying that ‘CEO’s serve shareholders interest first foremost’ is wrong since managers are agents for the corporation and not for its shareholders. Their first and foremost concern should be to create value for the organization, not for the single or specific shareholder, and how to distribute this value.

2. Independent and unsuspected organizations like the Dow Jones, through its Sustainability Index, continuously research on what business success over the long term looks like. And they don’t argue for a primacy of the shareholder over other stakeholders.

3. But we all agree that profit is a measure of success. However, short-term profit and satisfaction of the shareholder can have little to nothing to do with sustainable success.

4. If stakeholder involvement is seen by the company as a rhetoric strategy, I agree with Paul that involvement is a mere lip service. But, on the other hand, I suspect from the utilitarian idea that if and only if the organization involves the stakeholder with the purpose of achieving a business goal does PR work as it should work.

5. Corporate governance models are also diverse, as a debate from the 30’s demonstrates. On one side, Prof. Adolf Berle’s model of strict governance claims that all powers of the corporation are to be used for the benefit of the shareholder. On the other, Dodd’s broad Corporate Governance model sustains that society my request that a business is conducted in such a way as to safeguard the interests of those who deal with it even if this curtails the proprietary rights of its owners.

Right now PRs need to question all of their past assumptions without underestimating the insight that our elders and betters handed to us. But it seems you, Toni, are reluctant to engage other than in a contemptuous tone.

Debate and discussion should not be threatening; it shoud be exhillarating.