Sarah Kaplan - The Promises and Perils of Corporate Stakeholderism
From Nicole Proano Lasso
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The Promises and Perils of Corporate Stakeholderism
The Promises and Perils of Corporate Stakeholderism
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Sarah Kaplan: Okay, so thanks everyone really excited to tell you a little bit about my paper and, since you can read the paper, I will maybe also just start with a little bit of context about.
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Sarah Kaplan: My foray into the stakeholder and purpose literature.
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Sarah Kaplan: So I really come at it as a consumer of the literature it's not the core literature that I have historically contributed to i've always been an innovation scholar, and then, more recently, focused on issues related to gender.
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Sarah Kaplan: But always sort of with an innovation lens always thinking that we can innovate and ways to solve those problems so stakeholder and purpose is really something that I have come to.
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Sarah Kaplan: As a consumer because of my teaching I when I came to the rotman school.
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Sarah Kaplan: I asked if I could teach a course that was more integrative that looked at companies in depth, from the perspective of all stakeholders to see what that looked like as opposed to the ways we typically teach Business School.
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Sarah Kaplan: Courses strategy finance accounting maybe there's an ethics course off over on the side but there's no way to integrate and I wanted to try to do that, and so I saw searched in the literature, to see what I could find that would help me to do this kind of teaching.
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Sarah Kaplan: and through the literature, through my work on case studies and through my you know inner interaction with students.
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Sarah Kaplan: I over a period of time came to think that maybe I had some ideas to share with practitioners on that and translated that, from my course that was the 360 corporation to my book called the 360.
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Sarah Kaplan: corporation, and the goal, there really was to think about practical ways that we could address these issues of collective action and trade offs.
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Sarah Kaplan: And I can say as a consumer of the literature again that the research is really taking off in this area and there's so much more to draw from now than there was in 2009 so.
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Sarah Kaplan: From that perspective, as a consumer, and of course I have now begun to contribute in my own way, I cite some of my own papers in this paper.
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Sarah Kaplan: From an empirical standpoint but that really came later once I had kind of identified the areas that I felt were that I could contribute to and that were there was sort of a missing piece of the puzzle.
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Sarah Kaplan: So what I arguing the papers, first of all, blah blah blah stakeholders and was taken taken off Larry fink CEO black rock he gets a lot of.
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Sarah Kaplan: Press probably he'll be mentioned in a lot of the articles for this special issue starts talking about corporate purpose in.
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Sarah Kaplan: The business Roundtable comes out with his statement repudiating shareholder primacy so you know practitioners are starting to pay attention and, of course, academics are paying attention to.
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Sarah Kaplan: You know 20 years ago, looking at some of the top journals you know, we had very few maybe only around five articles that talk about stakeholders or sustainability or corporate purpose or corporate social responsibility today the number is closer to 40.
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Sarah Kaplan: And so you know we all as a community are paying much more attention to these issues, yet you know my concern was that.
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Sarah Kaplan: You know corporates are paying attention to these things, but are really they doing the right thing, can they say that they're really pursuing corporate.
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Sarah Kaplan: purpose when they're selling addictive drugs when they're offshoring profits to avoid taxes, when they are.
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Sarah Kaplan: You know, supporting politicians who would undermine women's rights transgender people's rights, civil rights.
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Sarah Kaplan: When they fund research to undercut claims about the dangers of fat and sugars like, how can they, how can companies claim to you know pursue purpose, when they are simultaneously undermining many things that we would consider to be.
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Sarah Kaplan: purpose now of course this idea that companies would not walk the talk is very, very old and literature, we have a whole letter turn decoupling, and I think it is.
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Sarah Kaplan: No new news that companies might decouple.
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Sarah Kaplan: In this way, but even after they made these statements about purpose and the corporate in the business Roundtable, for example, lucien bed chuck and a whole bunch of co authors have.
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Sarah Kaplan: kind of looked into all the different ways that we can see whether companies were actually following through on their business Roundtable promise.
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Sarah Kaplan: and basically find that you know they don't get these commitments, but approved by the board it doesn't show up in any of their key proxy documents or other legal documents it doesn't change how they behave in.
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Sarah Kaplan: acquisitions and takeovers, so one begins to wonder if there isn't.
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Sarah Kaplan: You know if this if there isn't it isn't a highly problematic that these firms are actually saying these things.
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Sarah Kaplan: And there's a lot of wonderful literature that has has documented this kind of decoupling because, basically, the changes that they'd have to make would be too expensive for the bottom line, and so they don't do them.
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Sarah Kaplan: But I want to say that there's a bigger danger than just that they don't do those activities, and this was documented quite well by Joel biocon back in and.
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Sarah Kaplan: Robert rice in their books that argue that corporate social responsibility is actually some kind of corporate power grab in which they're trying to take power from.
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Sarah Kaplan: Regulators and others who might actually constrain corporate action by claiming that they were doing some of these things themselves.
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Sarah Kaplan: And this is pretty consistent with Mariana mexico's arguments about the fact that corporate activists what she calls a Shell game.
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Sarah Kaplan: These kinds of corporate activities actually undermine public support for government action that may actually be much more appropriate in many of these cases.
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Sarah Kaplan: And so we have to really take into account whether whether corporate social responsibility is not only not doing the good at claims to be doing, but may actually be doing.
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Sarah Kaplan: more harm than good, especially in cases which you know Klein at all or low and call have shown government is actually going to be better positioned.
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Sarah Kaplan: In dealing with governing certain kinds of externalities and I think part of the problem is that we have formulated stakeholder ISM and corporate purpose, really.
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Sarah Kaplan: In a win, win formulation and this comes back down to the shared value of porter and creamer.
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Sarah Kaplan: We have a huge massive literature in social responsibility that has documented that you know the connection between.
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Sarah Kaplan: doing good and financial performance, I think, because many of us have felt that maybe we needed to make the business case in order to.
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Sarah Kaplan: promote these ideas, and I think we'd have successfully done that, and yet we don't see that corporate social responsibility has really taken off in any meaningful or maybe non incremental way in in most cases.
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Sarah Kaplan: And you know, I think, in part, and this is something that i've started to intervene in is the question of does the business case actually work, it seems.
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Sarah Kaplan: that the research suggests that it either doesn't motivate action or it is a cover for not wanting to take much action, so I think we have a problem from that standpoint.
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Sarah Kaplan: So, up until now, it probably sounds very negative.
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Sarah Kaplan: And I am quite negative about it, but at the same time, I feel like actually because of all these challenges that we have in our society, because the scope and the scale of the.
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Sarah Kaplan: All the Sustainable Development Goals and the grand challenges that corporations have to be involved, and I mean.
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Sarah Kaplan: We have governments in the US, like the the State of Texas who's now saying we're not going to allow.
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Sarah Kaplan: instance institutions that have ESP funds actually play a role in our in the final government finance, because we have oil and therefore we don't want.
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Sarah Kaplan: To have that those kinds of companies, so we see governments actually pushing back in negative ways as well, so I deeply believe that corporations do have a role they can be part of the solution for grand challenges and, in part because they are as.
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Sarah Kaplan: Anita and others have said, tools for getting things done, and so I think we need to think of these corporations, as you know, clusters of capabilities that can do certain things and that's the conceptualization that I think is going to be helpful, but.
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Sarah Kaplan: I argue in the paper that I don't think that this is going to be the business as usual, even in the stakeholder ISM even in our own work as scholars, I think we really need to be thinking differently about these challenges.
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Sarah Kaplan: First, we have to move beyond corporate purpose, you know beyond mere rhetoric, it has to be a tent attached to action actionable paths.
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Sarah Kaplan: And not just.
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Sarah Kaplan: You know, things that would connect to financial performance, but we need to think of alternative dependent variables.
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Sarah Kaplan: We need better definitions of who counts as a stakeholder.
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Sarah Kaplan: The team production model only takes us so far I know it's the most tractable definition that we have and that potentially broader definitions might be too broad and therefore become an actionable.
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Sarah Kaplan: However, I think that the current definitions don't take into account the ex ante and inclusion of stakeholders who can contribute to shared value.
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Sarah Kaplan: In the design and development of economic activities through co creation, as well as the Expos claims of stakeholders who might be harmed in some way that we can't anticipate.
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Sarah Kaplan: So we need better definitions, we need better theory around how to accommodate those ex post and ex ante claims.
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Sarah Kaplan: And then I really believe that we need more theorizing around how firms can collaborate with stakeholders, this is the Co creation I mentioned.
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Sarah Kaplan: Here we can be very informed by indigenous knowledge indigenous researches and feminist researchers in this area, who.
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Sarah Kaplan: have different models of the corporation, not as the the the centralizing power, not even the first among equals, but in fact one of many who can contribute to solutions.
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Sarah Kaplan: And the final question that I raise is what governance structures and performance, measures are needed.
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Sarah Kaplan: I think we're getting there with ideas about cooperatives with polly centric governance, but I don't think we have all the models in place and I don't think that B corporations are the magic solution.
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Sarah Kaplan: So I conclude by saying that what we need is transformational change transformational change in the corporate world as well as transformational change in the work that we do ourselves.
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Sarah Kaplan: I think we can learn a lot from people who have historically been on the fringes of the stakeholder conversation, as I mentioned.
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Sarah Kaplan: Indigenous perspectives feminist perspectives ecological perspectives that really help us reframe.
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Sarah Kaplan: The models that we use for solving these problems and I, and I do believe that the instrumental approach which has predominated up until now.
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Sarah Kaplan: simply is not going to be helpful that we need to reframe these challenges in ways that are going to motivate collective action, as opposed to competition and so.
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Sarah Kaplan: You know I argue that stakeholder ISM is going to require therefore courageous leadership again at the corporate as well as the academic level.
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Sarah Kaplan: And that courageous leadership is in some ways meant to you know, bring together this collaborative work that we ultimately need so i'm looking for the comments there's so much more to say, I appreciate your attention and see you soon.