A discussion on the Onkila’s Article regarding the stakeholder relationship management in environmental management

 

  1. Introduction:

 

The business operation in today’s world cannot leave without environmental issues if the corporation would like to develop in a sustainable way. Ignoring the impact of environmental issues will bring about the serious consequences to the corporation. Therefore, it is very important for the management team in the corporation to take the environmental management into account in their daily business operation. The environmental management is not only related to the corporation itself, but also it related to the all stakeholders, even the natural environment, which is usually not perceived as the stakeholders. Thus, for the sustainable development, it is vital for the company to evaluate the impact of the environmental issues on the business decision-making process. The stakeholder approach provided a good insight for the manager when they made the decision in the environmental management. Onkila (2011) summarized the multiple forms of Stakeholder Interaction in environmental management. This paper will review the Onkila’s article, compare the gaps between the article and other academic resources, and formulate the own attitude towards this article.

 

  1. Summary of the article

 

In Onkila’s (2011) article, it described and interpreted difference in stakeholder interaction in environment management. Not only it concluded popular four types of stakeholder’s relationships, which is power-based relationship, collaborative relationship, conflicting relationship, and one-side contribution relationship; but also it included the role of natural environment in these models. The position of natural environment was no longer neglected and has been justified through its status as ultimate target responsibility, legitimate interests, but was not justified by its lack of power. The founding showed the academic background about stakeholders in environment management, involved the role of natural environment in environment management, and inspired the managerial implications. The creation of multiple forms of stakeholders’ engagement in environmental issues enables the managers to analyze differences in stakeholder relationships, the actor involved, and the attributes of stakeholder interests.

 

  1. A Discussion on the Onkila’s Article regarding thestakeholder relationship management in environmental management

 

Wilson and Bryant (1997) defined the environmental management is a multi-layered process in which different types of environmental managers interact with the environment and with each other to pursue a livelihood. EI-Kholy (2001) suggested that environmental management is a process concerned with human-environment interactions, and seeks to identify: what is environmentally desirable; what are the physical, economic, social and technological constraints to achieving that; and what are the most feasible options. Barrow (2006) proposed that environment management is related to the sustainable development, used as a generic term, and deals with a world affected by humans. Sullivan and Wyndham (2001) found that many benefits associated with the effective management of environmental issues, including reduced risk, improved utilization of resources and employee, better management of regulatory compliance, reduced costs, increased the revenue, and improved public reputation. Richards et al (2004) stated that stakeholder participation may increase public trust in decisions and civil society, if participatory processes are perceived to be transparent and consider conflicting claims and views. Moreover, stakeholder participation may increase the possibility that environmental decisions are perceived to be fair under the complexity of human-environmental interactions. (Richards et al, 2004) In addition, the stakeholder participation enables interventions and technologies to be better adapt to local social-culture and environmental conditions. (Reed, 2008)

 

There are many approaches to environmental management. Barrow (2006) concluded these approaches including Ad hoc approach, Problem-solving approach, system approach, regional approach, specialist discipline approach, strategic environmental management approach, voluntary sector approach, commercial approach, political economy or political ecology approach, and human ecology approach. However, according to Onkila (2011), it mainly discussed the approach based on the stakeholder’s relationship. Roome and Wijen (2006) has stated that corporate environmental management need actors to interact, to resolve different perspectives on issues, options, and outcomes, and to make decisions. Stakeholders are the individuals or groups who have some type of stake in or relationship with a corporation. (Mitchell et al, 1997) Fiksel (2003) claimed that the needs of society can be clarified and prioritized through stakeholder engagement, including a dialogue between corporations, institutional policy maker and public interest groups. Therefore, it is very important for the corporation involve the stakeholder engagement when it decided the environmental management. The environmental management requires the interaction with stakeholders. Noland and Phillips (2009) found that due to the fact that the financial, physical, and environmental effects that business can have on individuals and groups, it is important that business actually identify and identify and communicate with those persons who have legitimate stake in them. Moreover, stakeholder theory is concerned with bridging the gaps between different stakeholders, and finding compromises to solve conflicts of interests in the framework of the corporation viewed as a complex and evolving system. (Lesourd and Schilizzi, 2001) Thus, it is important to analyze the stakeholder’s relationship not only on the basis of their main attributes, but also on the basis of their relationship with the corporations. Different from Onkila (2011), Palvoviita and Luoma-aho (2007) proposed another four stakeholder’s relationships, which are power, legitimacy, urgency, and frequency. They suggested stakeholder approach to the environmental management could be implemented more effectively by using information on current stakeholder attributes. Specifically, they also indicated the stakeholder’s relationship is changing all the time under a dynamic situation.

 

The common attitude towards the stakeholders is always referred to a person or a group who have the stake with or an economic interest in the firm. Therefore, the role of natural environment is always neglected by the scholars. It is generally perceived that natural environment cannot interact with the corporation directly. The breakthrough of Onlika’s article is that it included the natural environment as a part of stakeholder relationship, and how it performed among stakeholder relationships. Strike (1993) has found that the term of stakeholder is not only including all the living organism (also animals and plants), but also including landscape elements (rocks, water, etc) and the cosmos in general, significantly expands the definition of stakeholders far beyond the original definition. Moreover, Driscoll and Starik (2004) provided a stronger basis by arguing the salience of natural environment as the primary and primordial stakeholder of the firm. In this context, the natural environment is considered as a primary stakeholder because the operation of business is based upon the environmental resources. However, Onkila (2011) found that the role of natural environment is not justified by its lack of power, but justified based on its status.

 

Although, Onkila (2011) concluded multiple forms of stakeholder interaction in environmental management, it is too theoretical background. It just provided a way for the corporation to identify the stakeholder relationships when it decides to develop a feasible strategy about environmental management. The question is after identifying the multiple stakeholder relationships, the corporation how to develop a strategy in their daily business operation about environmental management. In other words, it is lack of the actual practice to support its findings or give out the good practice that the corporation could refer to regarding to the environmental management. As the article stated, it suggested that business managers should be able to manage differences in stakeholder relationship, but the article did not tell the way that managers manage the differences or the feasible scenarios. It is not sufficient to just identify the stakeholder relationship in the environmental management. The different strategy developed upon the stakeholder relationship in the environmental management shall be included.

 

Although the author found the gap in the Onkila’s article, the author still found the strong points in this article. Environmental management is not only related to the single stakeholder relationship. Actually, it related to the different kinds of stakeholder relationship. Onkila’s article concluded the multiple forms of stakeholder relationships: power based, collaborative, conflicting, and one-sided relationships. These four types of relationship clearly describe the extent to which the stakeholder’s participation of interaction with the corporation. It is very important for the corporation to identify the relationship with various stakeholders and develop the appropriate strategy regarding the environmental management. The environmental manager could define the multiple relationships instead of one single relationship. For example, the business corporation will meet the power based relationship. Thomas Cook is UK’s leading tourism operator, and it put great emphasis on the environmental management. (Thomas Cook, 2009) Therefore, it asks its suppliers and partners such as hotel chains, coach agents to adopt the same standard regarding the environmental issues like carbon omission. In this case, Thomas Cook used its corporate power to influence its partners and suppliers, who are the main stakeholders in the environmental management. Meanwhile, Thomas Cook also holds the one-side contribution stakeholder relationship. For one thing, Thomas Cook set the high standard on its environmental operation to ensure the customer has a safety trip, employee has the stable working environment, and suppliers adopt the same standard. For another thing, Thomas Cook made the positive contribution to the society. The tourism industry is an industry requiring the natural environmental resources all the time. It is not sufficient to develop a strategy based on one single stakeholder relationship about environmental management. The stakeholder such as destination community is benefit from the Thomas Cook’s contribution because the Thomas Cook put a large amount of money to set up the school for the children in the local community. In this example, the identification of multiple stakeholder relationship played an important role in the business strategy making by Thomas Cook. Thus, by identify the multiple stakeholder relationships, the decision making at the end will be more precisely. Moreover, the breakthrough of Onkila’s article is taking the natural environment into account as a stakeholder. The position of natural environment among stakeholders was justified based on its status as the ultimate target of responsibility, possessing legitimate interests, but was not justified by its lack of power. However, the description or definition of the role of the natural environment is ambiguous. It is a little bit harder for the reader to understand the status of environment as a primary stakeholder.

 

Regarding to Onkila (2011)’s article, it is a good indication of the present state of knowledge and the idea on the issue. The complex and changing environment problems calls for flexible and transparent decision making that embrace a diversity of knowledge and values. (Reed, 2008) Therefore, the multiple form of stakeholder engagement in environmental management is very meaningful because the related stakeholder participation in environmental decision making has been increasingly sought and embedded into domestic and international policy. The stakeholder was no longer single stakeholder or internal stakeholder. Instead, the internal and external stakeholders played an important role in the environmental decision making. The managers in the corporation then have the ability to analyze the differences in stakeholder relationships, the actors involved, and the attributes of stakeholder interests. Thus, the managers have the possibilities to manage the differences. For example, if a corporation has the sufficient power, it could use its power to influence the stakeholders in the daily operation of environmental management. If this corporation would like to make the positive contribution to the society and improve the negative impacts on environment issues, it could use its power to define environment actions. This in turn, the stakeholders as the power user perform the necessary actions in the same way.

 

Environmental management cannot leave without the stakeholders’ participation. Stakeholder relationship played an important role in the environmental management, because the business developed the environmental strategy based on the interaction with the related shareholders. Onkila (2011)’s article summarized four different types of stakeholder relationships. By identifying the type of relationship, the managers can define the responsibilities, share the responsibilities among different actors, question the environmental interests and justify the certain environmental impacts. The author leant the role of natural environment was not just only the stakeholder, actually, the role of natural environment among stakeholders is dependent on its status. It can be a target responsibility, a legitimate interests, and unquestionable value. Managers did not confine themselves to develop one single strategy. Instead, managers could develop the various strategy based on the multiple forms of stakeholder engagement. Moreover, the different forms of stakeholder relationship indicate the extent to which the interaction between the company and the stakeholders. For example, in the power-based relationship, the interaction between the company and the stakeholders is almost zero, and the powerful side decides the strategy, and the stakeholders or the company become the followers. In the collaborative relationship, the interaction is relatively strong. In addition, each relationship has the different kind of stakeholders. For example, in the power-based relationship, the stakeholders are customers, suppliers, employees, citizens, and partners in cooperation. The collaborative relationship indicated the stakeholders are the society. The conflicting relationship indicated the stakeholders are the governments. Therefore, it is more precise for managers to define the related stakeholder if they want to develop a strategy based on the power-based relationship, or develop a strategy with the external stakeholder such as the society based on the collaborative relationship. Furthermore, the responsibility could be clearly allocated based on the multiple form of stakeholder engagement. Because the stakeholder relationship indicated who is the key responsible side, and who is the follower regarding the environmental management. After the identification of responsibility, it will be efficient for the follower or the responsible side to execute or act the strategy. The role of environment will be justified whether it is a target or a stakeholder or just the legitimate interest. The decision making based on the multiple forms will be more effective and precise because the responsibility has been defined and allocated, and the role of environment has been justified.

 

  1. Conclusion:

 

Environmental management has become more and more important in today’s business operation. If a corporation would like to develop in a sustainable way, it has to keep in mind of the importance of the environmental management. The environmental management has many approaches, but in this essay it mainly discussed the stakeholder approach. Stakeholder approach is a feasible approach because the stakeholder is not only the main attributes to the company, but the relationship with the company. Onkila (2011) concluded four types of stakeholder relationship based on the stakeholder engagement in the environmental management. Moreover, it also takes the natural environment into account and identifies the role of the natural environment based on its status rather than the power because the power of natural environment is indirect. It provides a useful and efficient way for the environmental managers to set up the environmental strategy because the multiple forms of the stakeholder identify the responsibility, actor, and the interest. However, Onkila’s article did not associate the good practice with the multiple forms of stakeholder relationship. Therefore, it is too theoretical for the reader to understand. If the article includes the best practice, it will be more convinced to the readers. Anyhow, the multiple forms of stakeholder relationships and the identification role of natural environment provide the good academic background for the managers when they decide the environment strategy in the real world. It is believed that the strategy will be efficient because the responsibility, actor, and the interest can be justified based on the different type.

 

Reference:

 

Barrow, C. J. (2006). Environmental management for sustainable development. 2nd ed. New York: Routledge. pp.6

 

Driscoll, C. & Starik, M. (2004). The Primordial Stakeholder: Advancing the Conceptual Consideration of Stakeholder Status for the Natural Environment. Journal of Business Ethics. Vol.49(1). pp.55-73

 

Fiksel, J. (2003). Designing Resilient, Sustainable Systems. Environmental Science and Technology. Vol.37.pp.5330-5339

 

Lesourd, J. & Schilizzi, S. (2001). The Environment in Corporate Management.: New Directions and Economic Insights. Cheltenham: Edward Elgar Publishing. pp.7

 

Mitchel, R. et al. (1997). Towards a theory of stakeholder identification and salience: defining principles of who and what really counts. Academy of Management Review. Vol.22(4). pp. 853-88

 

Noland, J. & Phillips, R. (2009). Stakeholder Engagement, Discourse Ethics and Strategic Management. International Journal of Management Reviews. Vol.12(1).pp.39-49

 

Onkila, T. (2011). Multiple Forms of Stakeholder Interaction in Environmental Management: Business Arguments Regarding Differences in Stakeholder Relationships. Business Strategy and the Environment.Vol.20.pp.379-393

 

Paloviia, A. & Luoma-aho, V. (2007). A stakeholder relationship approach to corporate environmental management. Sustainable Social and Ecosystem Stewardship International Conference of the Greening of Industry Network. Ontario.

 

Reed, M.S. (2008). Stakeholder participation for environmental management: A literature review. Biological Conservation. Vol.141.pp.2417-2431

 

Richard, C. et al. (2004). Practical Approaches to Participation SERG Policy Brief No.1 Macauley Land Use Research Institute. Aberdeen.

 

Roome, N. & Wijen, F. (2006). Stakeholder power and organizational learning in corporate environmental management. Organization Studies. Vol.27(2). Pp. 235-263

 

Strike, M. (1993). Is the environmental an organizational stakeholder? Naturally? Paper presented at the Proceedings of the fourth annual meeting of the International association for Business and Society. San Diego

 

Sullivan, R. & Wyndaham, H. (2001). Effective environmental management: Principles and case studies. Crows Nest: Allen & Unwin. pp.1

 

Wilson, G. & Bryant, R.L. (1997). Environmental management: new directions for twenty-first century. London: Routledge.  pp.5

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