Developing a Scientific Foundation for Stakeholder Theory

Abstract

We advance a unifying theoretical framework for stakeholder analysis by way of a rigorous mathematical formulation that can be used to inform both qualitative and quantitative research.
The framework comprises five components contributing to stakeholder salience. Three of these relate to power, legitimacy and urgency, well known from classical stakeholder theory. The remaining two components represent types of resistance to change within an organization. Stakeholders are modeled as interactive entities, while legitimacy arises through a mathematical projection mechanism.
Individual stakeholder groups seek to maximize esteem while minimizing pressure exerted on them by other agents. A novel mechanism transforms wealth into esteem; wealth forms only part of a stakeholder group's total utility.

Keywords: Stakeholder theory, dynamics modelling, salience attributes, isomorphism, legitimacy

JEL Classification: A13, G30, G34, L21, M10, M14