Talking to your stakeholders often fails to reduce their expectations and may actually increase them, a study has found.
A
UK survey of almost 100 businesses, non-governmental organizations and
consultancies showed that most respondents found that stakeholder
dialogue they had taken part in, far from satisfying those involved,
had in fact further fuelled demands, with the risk that companies could
find themselves falling short of new expectations. This view was held
equally strongly by NGOs and companies.
Researchers at the
universities of Sheffield and Leicester, who jointly carried out the
study, say the findings ‘indicate that dialogue on CSR may bring its
own challenges for companies in terms of how to respond to or contain
stakeholder expectations, and the … effects if dialogue fails to
produce outcomes.’
They suggest that companies provide ‘concrete
feedback’ so that participants can see the results of actions carried
out. Only one in four NGOs said they had received such feedback.
Karen
Clarke-Whistler, team leader of corporate services at UK-based Golder
Associates, a consultancy that advises companies on stakeholder
relations, told EP: ‘These
results clearly point to the need for a well-defined process for
managing stakeholder engagement. In our experience most mismatched
expectations can be linked to lack of clarity about the objectives of
the engagement.’
Both NGOs and companies said they felt the
relationship between businesses and stakeholders improves when
discussions on social and environmental issues are held, with
three-quarters of companies and two-thirds of NGOs saying this was the
case. Companies and NGOs also agreed that dialogue helped to reduce
business risk, although NGOs were more convinced than companies
(three-quarters compared with just over half).
On the question
of whether dialogue had been a ‘key factor’ in improving corporate
social and environmental performance, however, there were clear
differences in views. Three-quarters of companies thought so, compared
with only four in ten NGOs. ‘Most groups acknowledge that attitudes
have changed through the engagement process, but actual direct outcomes
seem harder to identify and quantify,’ said Gerard Hanlon, professor of
organization and society at Leicester University.
Half of the
NGOs questioned felt that other stakeholders were unaware of ‘dialogue
opportunities’. The study was part of the Cradle project into
stakeholder dialogue, funded by the Economic and Social Research
Council.
