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A rationale for stakeholder‐based management in developing nations

George Joseph (College of Management, University of Massachusetts Lowell, Lowell, Massachusetts, USA)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 6 June 2008

Abstract

Purpose

The paper aims to provide a rationale for stakeholder‐based management in developing countries. To implement the objectives, the paper contrasts the implications of agency and stakeholder theories as they apply to developing countries and highlight “total wealth creation” and “purposive adaptation” that support developmental goals of developing countries. This “purposive adaptation” also implicates the use of management accounting tools in a flexible way to meet the needs of the strategy.

Design/methodology/approach

The paper uses conceptual analysis and the case study approach

Findings

The Tata Steel case illustrates the normative stakeholder approach in the developing country context. Specifically, the case highlights strategy developed through “stakeholder engagement” and the application of the balanced scorecard to address stakeholder issues in implementing the strategy, illustrating the rationale underlying the stakeholder approach in addressing developmental concerns through more dispersed and larger wealth creation.

Research limitations/implications

There is limited scope to use methods other than illustrating the theory using specific instances of its application, as in the case approach.

Practical implications

The paper illustrates long‐term implications on sustainable development.

Originality/value

Few papers consider contextualizing theoretical implications of management to developing countries. This is important as the theory has implications on development in such aspects as environmental costs, increasing inequality, and associated issues. The paper directs attention to the importance of identifying theory that addresses the unique management challenges in developing countries and can potentially enable further research to systematize and generalize management approaches in developing countries.

Keywords

Citation

Joseph, G. (2008), "A rationale for stakeholder‐based management in developing nations", Journal of Accounting & Organizational Change, Vol. 4 No. 2, pp. 136-161. https://doi.org/10.1108/18325910810878946

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited