McMillan et al (2004)
Links Corporate Governance, Corporate Reputation and Corporate Responsibility and argue that relationship focus will allow directors to manage complex areas in practical ways, and presents a tool called SPIRIT (Stakeholder Performance Indicator, Relationship Improvement Tool) for analysing the three types of relationships.
Core Theory (logical explanation or testable model of interaction):
Getting better information to the boardroom would allow corporate governance of reputation and relationships with both direction and control, and enable responsible use of cash and sustainable stakeholder management.
Core concepts (abstract idea or a mental symbol):
Corporate Governance – mechanism for business relationship direction and control – control and accountability one side of the coin leadership and enterprise the other.
Corporate Reputation – stakeholder view of business
Corporate Responsibility – relationship to primary and secondary stakeholders
Core framework (structure used to outline, address or solve complex issues):
Core models (pattern, plan or description showing main object or workings of concept):
Stakeholder Performance Indicator p 27
Provides information (measurement and control aspect in governance) about four key aspects of stakeholder relationships, needed to secure sustainable and successful business:
- DRIVER Stakeholder experience of a business’ behaviour (communication, service etc.)
- DRIVER Stakeholder experience of outside influencers (what media and pressure groups say)
- OUTCOME Stakeholder behavioural support towards a business (commitment, retention, extension, co-operation)
- OUTCOME Stakeholder emotional support towards a business (trust, positive affect and emotion)
Relationship Improvement Tool p34-37
Provides information (prioritize and direction aspect of corporate governance ) of which are the most critical drivers, and links the determined key drivers within 1&2 to the outcomes in 3&4, and thus identifies what
Relatedness to objective:
P27 Elements driving enhancement of intangible assets (constituting shareholder value) are to be found in the future behaviours of key stakeholders towards the firm.
P22 Social, political and environmental issues “particularly affects international companies, as a whole as a sector (Klein 2001). And it is suggested by many theorists that companies should work together to address them. Community and media may be more direct to one company.
Relatedness to questions:
Arguments/points made (set of one or more declarative sentences):
P21 To manage stakeholder relationships organisations “need to develop strategies that focus not only on communications but also on many other aspects of the day-to-day experience of stakeholders”
P24 “definition of responsibility as “company behaviour which generates trust and support of key stakeholders”
Good corporate governance is about more than control and accountability, it is also about leadership and direction
Reputation is about how a company is perceived by key stakeholders (depend on experience rather than PR)
Corporate Responsibility is how a business generates its cash, spends its cash and treats its stakeholders, it is at the heart of how business is conducted