Stakeholder Governance for Responsible Innovation: A Theory of Value Creation, Appropriation, and Distribution

Journal of Management Studies, Forthcoming

52 Pages Posted: 22 Mar 2021

See all articles by Sophie Bacq

Sophie Bacq

Indiana University - Kelley School of Business

Ruth V. Aguilera

Northeastern University - Department of International Business and Strategy

Date Written: March 4, 2021

Abstract

In the face of intractable societal grand challenges, organizations increasingly resort to responsible innovation—that is, they pledge to create value for multiple stakeholders through developing new products or services that avoid doing harm and improve conditions for people and the planet. While the link between responsible innovation and societal improvements has been established, organizations pursuing responsible innovation lack governance mechanisms to guide the allocation of the value created—both economic and social—among heterogeneous stakeholders, in line with their responsible intent. We combine the value-based strategy and stakeholder perspectives and infuse a deliberative process to design a three-stage model of value allocation that rests on three key organizational decisions: i) what value to create and for whom, ii) how to appropriate the value created vis-à-vis unintended value appropriators, and iii) how to distribute the value appropriated among intended stakeholders. We propose a framework of stakeholder governance comprised of four novel mechanisms by which organizations can allocate value among their multiple principal stakeholders as part of participative processes. Our study contributes to responsible innovation and corporate governance research by unpacking how new value is managed to solve societal grand challenges.

Keywords: stakeholder governance; value appropriation and value distribution; responsible innovation; social value; deliberation; grand challenges

JEL Classification: M10

Suggested Citation

Bacq, Sophie and Aguilera, Ruth V., Stakeholder Governance for Responsible Innovation: A Theory of Value Creation, Appropriation, and Distribution (March 4, 2021). Journal of Management Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3806124 or http://dx.doi.org/10.2139/ssrn.3806124

Sophie Bacq (Contact Author)

Indiana University - Kelley School of Business ( email )

1309 East Tenth Street
Indianapolis, IN 47405-1701
United States

Ruth V. Aguilera

Northeastern University - Department of International Business and Strategy ( email )

Boston, MA 02115
United States

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