The Strategic Imperative: Do We Need Normative Considerations in Strategic Theories of Stakeholder Engagement?

Recent work in strategy has examined how distinctive stakeholder engagement promotes value creation and appropriation, leading to a proposed “new stakeholder theory” (NST). In developing this new literature stream, strategy scholars have adopted an instrumental (performance-oriented) and predictive approach, thus abstracting from normative considerations informing how companies should approach their stakeholders. This paper maintains that NST should explicitly state its underpinning normative assumptions, even if it keeps its predictive focus, for four main reasons; theorists may want to rule out unacceptable managerial behavior (which may still be consistent with a value creation logic), define the criteria to set the boundaries on stakeholders’ claims (those included and especially, those excluded from the value creation process), specify the working definition of “value” (which may differ from the usual emphasis on economic value), and discuss the downstream managerial implications of the proposed theory. The paper concludes by suggesting how to incorporate such normative assumptions in NST as a first analytical stage to guide subsequent predictions or explanations. It also outlines how this effort can benefit strategy research in general in cases where the underlying theoretical mechanisms involve the presence and engagement of stakeholders.