The usefulness of the stakeholder theory in an analysis of the Internet-impacted business environment of contemporary organizations.

AUTHOR
Janusz Wielki, Ph.D.

ABSTRACT

The business environment in which every organization operates and the changes taking place in it are extremely important elements of an organization’s success. It is a collection of numerous entities, factors and forces which are more or less predictable in their behavior and which give an organization a chance to establish a competitive advantage and to develop further development. Conversely, these entities can also threaten the existence of an organization. As a result, the ability of an organization to analyze, understand and assess its business environment and the associated dynamics is essential.

As the contemporary business and economic reality becomes more and more complicated and decreasingly unambiguous, as compared to before the wide scale use of the Internet, an analysis of the business environment as conducted in the traditional way and also operating in this context in typical categories such as suppliers, customers or competitors, decreasingly fits in with the emerging new reality. The dynamics of the changes taking place are so big and the state of belonging to the above mentioned groups is so fluid and imprecise that it has become necessary to look at the forces influencing organizations through their business environment in a far wider and unconventional way. Additionally the whole “picture” is complicated by various entities which have either emerged with the development of the electronic space or have grown in power in the new reality.

This new marker situation provides an opportunity for analysis using the stakeholder theory, with considerations in its scope, beyond “traditional” stakeholders, entities and forces operating in developing around the Internet electronic space (understood as a global computer network based on the TCP/IP protocols). There are numerous important aspects which determine its usefulness and accuracy with reference to the contemporary economic and business reality. They include such issues as utilization, in the context of entities influencing functioning of organizations; a very broad-ranging and flexible notion of “stakeholders”, and a holistic view of an organization and its business environment connected with conducting an analysis from the systems theory point of view.

The paper is composed of four parts. In the first part an overview of the situation connected with the changes taking place in the business environment of organizations as a result of the Internet’s arrival within the contemporary economy is provided. The next part is focused on a review of the most common approaches used to analyze an organization’s business environment and the reasons for a particular usefulness of the stakeholder theory in this context. The following part is the core of this paper. It is devoted to the utilization of the stakeholder approach in the analysis of the Internet-impacted business environment of contemporary enterprises. First, a brief overview of its development and areas of utilization in management are provided. Also, a definition of stakeholders is proposed, in the context of the analysis conducted in the paper. Next, a review is made of the most important groups of stakeholders from the organization’s point of view. In this context, particular attention is focused on SIGs (special interest groups) as the influence of these groups has been rapidly growing in the new business reality. Their revised definition is also proposed.

Further analysis is conducted from the three-layered approach proposed by Donaldson and Preston including descriptive, instrumental, and normative aspects. Referring to the first layer, a division of stakeholders from the point of view of organizations using the Internet in their business activities is proposed. Next, referring to the instrumental layer and based on practical examples, various aspects connected with stakeholder management, including both real and potential ones, operating in electronic space in the context of organization’s performance and accomplishment of its goals are analyzed. Finally the focus of the attention moves to the normative point of view and an analysis of the potential social and ethical challenges emerging in the Internet-impacted business environment of contemporary enterprises. Particularly careful analysis is given to this in the context of this paper.

This three-layered analysis is conducted taking into consideration the changes taking place in an organization’s business environment with the evolution of the Internet and development of the Web 2.0 phase. In this context, the consequences of the access of stakeholders to new types of internet technology-based tools and the development of social computing are included in the analysis.

In the final part of the paper, the most significant conclusions and suggestions are offered.

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