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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.
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.
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