QUT Digital Repository: http://eprints.qut.edu.au/
Beach, Sandra (2009) Who or what decides how stakeholders are optimally engaged by governance networks delivering public outcomes? In: 13th International Research Society for Public Management Conference (IRSPM XIII), 6–8 April 2009, Copenhagen Business School, Fredericksberg.
© Copyright 2009 [please consult the authors]
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INTERNATIONAL RESEARCH SOCIETY FOR PUBLIC
MANAGEMENT CONFERENCE 2009, COPENHAGEN
DOCTORAL PANEL
TITLE: Who or what decides how stakeholders are optimally engaged by
governance networks delivering public outcomes?
AUTHOR:
Ms Sandra Beach, Queensland University of Technology, Australia,
SUPERVISORS
Professor Kerry Brown, Queensland University of Technology, Australia
Doctor Robyn Keast, Queensland University of Technology, Australia
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Abstract As the problems involving infrastructure delivery have become more complex and
contentious, there has been an acknowledgement that these problems cannot be resolved by
any one body working alone. This understanding has driven multi-sectoral collaboration and
has led to an expansion of the set of actors, including stakeholders, who are now involved in
delivery of infrastructure projects and services. However, more needs to be understood about
how to include stakeholders in these processes and the optimal ways of developing the
requisite combination of stakeholders to achieve effective outcomes.
This thesis draws on stakeholder theory and governance network theory to obtain insights
into how three networks delivering public outcomes within the Roads Alliance in Queensland
engage with stakeholders in the delivery of complex and sensitive infrastructure services and
projects. New knowledge about stakeholders will be obtained by testing a model of
Stakeholder Salience and Engagement which combines and extends the stakeholder
identification and salience theory (Mitchell, Agle, and Wood, 1997), ladder of stakeholder
management and engagement (Friedman and Miles, 2006) and the model of stakeholder
engagement and moral treatment of stakeholders (Greenwood, 2007).
By applying this model, the broad research question: “Who or what decides how stakeholders
are optimally engaged by governance networks delivering public outcomes?” will be
addressed. The case studies will test a theoretical model of stakeholder salience and
engagement which links strategic management decisions about stakeholder salience with the
quality and quantity of engagement strategies for engaging different types of stakeholders.
The outcomes of this research will contribute to and extend stakeholder theory by showing
how stakeholder salience impacts on decisions about the types of engagement processes
implemented. Governance network theory will be extended by showing how governance
networks interact with stakeholders through the concepts of stakeholder salience and
engagement. From a practical perspective this research will provide governance networks
with an indication of how to optimise engagement with different types of stakeholders.
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INTRODUCTION
Background
As communities are turning to government and industry for integrated solutions to their
issues, stakeholders have become more important in policy development and service delivery
(Clarkson, 1995) especially in situations where government and business by themselves are
considered to have failed. This heightened awareness of stakeholders has occurred within the
context of rapidly changing environmental conditions, loss of trust in government, and
shifting citizen expectations (Bloomfield, Collins, Fry, and Munton, 2001). It has also been
prompted by the co-ordination and accountability problems resulting from the privatisation
and contracting out of government functions to the not for profit and business sectors.
The resultant degradation of skills (Farazmand, 2002) and disruption of networks of
relationships (Bulder, Leeuw, and Flap, 1996) within government, between sectors and with
service users and stakeholders, has driven the need for a different form of governance which
would achieve objectives through relationships based on mutual interdependence rather than
through control by price signals or administrative authority (Larson, 1992). As a result, there
has been a growth in collaborative governance arrangements, including governance networks
which provide a framework for the horizontal co-ordination of public, corporate and
community interests and actions which are linked by resource dependencies (Provan and
Milward, 1995).
Consequently governance networks have come to the fore as a mechanism for organising
activities and bringing together a broader range of actors required to resolve contentious and
fast paced problems (Keast, Mandell, Brown, and Woolcock, 2004). However, governance
networks differ from other complex organisational forms. Firstly, three forms of governance:
hierarchical, market and network can simultaneously exist within the one governance
network creating great complexity. Secondly, governance networks convened under the
auspices of government face the challenge of managing the dominance of government in a
networked relationship. Finally the capacity of network members to relinquish
representational roles in favour of the collective network approach is also a complicating
factor. As a result, it has been acknowledged (Agranoff and McGuire, 2001; Keast and
Hampson, 2007; Mandell, 2001) that governance networks require new management
approaches because conventional management strategies may be less effective in this
relational context.
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Maintaining relationships with stakeholders has been and continues to be difficult because of
the range of actions and strategies that stakeholders employ to influence organisations and the
impact this can have on project completion and delivery of outcomes (Freeman, 1984). As a
result, organisations have had to deal with stakeholder influencing strategies that range from
hostile to conciliatory through to collaborative (Frooman, 1999; Hardy and Phillips, 1998).
However, governance networks responsible for delivering public outcomes face an additional
layer of complexity resulting from their context and in particular, managing stakeholder
expectations in a political environment.
This also raises the question of whether or not current models of stakeholder engagement
used within collaborative governance settings are flexible enough to incorporate the overtly
political context in which these networks operate. Therefore it could be argued that models
of stakeholder engagement which have been derived from the business context require
modification to operate effectively in networked public settings. Context is particularly
important for governance networks delivering sensitive infrastructure outcomes because
business focused models of stakeholder engagement are not calibrated for the difficulties
associated with delivering infrastructure across multiple jurisdictions, sectors and geographic
locations and different political circumstances. Further adding to the complexity,
infrastructure development has recently become an urgent national priority as the Australian
government accelerates major infrastructure construction to dampen the effects of the global
financial crisis (Minister for Infrastructure Transport Regional Development and Local
Government, 2008).
However, despite the criticality of infrastructure services to consumers and the scale and
sensitivity of the infrastructure being developed, the focus of stakeholder involvement by
infrastructure networks has been largely project focused (Atkin, 2008). Given the time
pressures currently being applied by the Australian government to drive economic security
through development of infrastructure, a broader approach to stakeholder engagement is
required to ensure that a range of perspectives are captured in delivering this infrastructure.
There is evidence that a broader perspective on stakeholder engagement is beginning to
emerge. For example, the inclusion of stakeholders in transport research and development
was studied by Switzer and McNeil (2004). More recently, Koppenjan, Charles and Ryan
(2008), conceptualised a stakeholder approach to public values in infrastructure projects.
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However, what is still lacking is a robust model for understanding the importance of various
types of stakeholders to governance networks and the appropriate strategies for engaging with
these stakeholders to create public value.
This study will fill the gap in knowledge about successful strategies for identifying and
managing stakeholders of governance networks delivering public outcomes and as a result,
offer insights and provide a rationale for strategic decision making about stakeholders.
However, while the context for this study is infrastructure governance networks, the
theoretical framework to be developed will not be dependent upon or limited to this context.
DEFINITIONS
Within the literature on stakeholders and governance networks, a number of terms and
constructs are used to discuss the inclusion of actors involved in governance and decision
making processes. As some of these terms are used interchangeably confusion can arise.
Table 1 outlines a set of key definitions drawn from the literature which will provide a
foundation for this thesis.
Table 1 Definition of Terms
TERM DESCRIPTION Governance networks
“Public policy making and implementation through a web of relationships between government, business and civil society” (Klijn and Skelcher, 2007, p. 587)
Stakeholder Groups or individuals who can actually or potentially affect or be affected by the achievement of governance network outcomes (Mitchell et al., 1997, p. 869)
Stakeholder engagement
The practices undertaken by organisations to positively involve stakeholders in organisational activities (Greenwood, 2007)
Quantity of engagement
The number of engagement opportunities made available to stakeholders (Leach, Lowndes, Cowell, and Downe, 2005)
Quality of engagement
Types of contact between governance networks and stakeholders ranging from one way communication to dialogical processes (Crane and Livesey, 2003; Voci and Hewstone, 2003)
Stakeholder salience
Stakeholders become salient as a result of the perception of managers that stakeholders possess the power to influence an organisation and the legitimacy, temporality and criticality of their claims to the organisation (Mitchell et al., 1997)
Having delimited the study through these definitions, the overall research approach is
outlined next.
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LITERATURE REVIEW
Stakeholder Approach
Although originating in the private sector, the stakeholder concept has increasingly become
more prominent in the public management literature over the past 25 years (Bryson, 2004).
Within the public domain, stakeholders have been studied in a number of contexts:
identification of stakeholders (Gomes, 2003, 2004), performance management (Bovaird and
Halachmi, 2001; Lawton, McKevitt, and Millar, 2000), strategic management (Moore, 1997),
ethical conduct (Martin, 2003), service delivery (Bryson, Cunningham, and Lokkesmoe,
2002; Bryson, Koegel, Koegel, Openden, Smith, and Nefdt, 2007) and to test administrative
responsiveness in citizen involvement (Yang and Callahan, 2007).
While these studies acknowledge that the successful delivery of public outcomes depends
increasingly on the need to work effectively with external stakeholders, optimal ways for
governance networks to develop the requisite combination of stakeholders to achieve
successful outcomes have yet to be identified Therefore, it remains a continuing challenge
for governance networks to identify appropriate stakeholders, to determine when and how to
engage with them and to effectively manage these relationships to achieve results and derive
benefits. Given that these relationships provide the form, create constraints and present
opportunities for the way public outcomes are achieved (Feldman and Khademian, 2002), it
is important that governance networks find effective ways to engage with stakeholders as a
means of improving the quality of those outcomes. However, dealing effectively with
stakeholders is not a straight forward matter because they can employ a range of influencing
strategies from problem solving to threatening (Frooman, 1999). The resultant complexities
and uncertainties are magnified by the political context within which governance networks
operate.
To understand how current stakeholder models may be applied in the context of networks
delivering public outcomes, the following components of the stakeholder approach will be
considered: definition, identification and classification of stakeholders. The salience of
stakeholders and how various combinations of salience are linked to stakeholder engagement
activities will also be examined. These concepts are discussed next.
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Identifying and Classifying Stakeholders
Despite the theoretical development that has occurred since Freeman (1984) introduced the
notion of strategic management of stakeholders, the concept of stakeholding remains
notoriously vague (Jones and Wicks, 1999). The resultant ambiguity has a flow on effect
because it impacts on which stakeholders will be included in the work of governance
networks and the level and type of participation stakeholders are afforded.
Stakeholders have generally been defined from two perspectives: broad and narrow (Freeman
and Reed, 1983). From the broad perspective stakeholders are considered to be groups or
individuals who can actually or potentially affect or be affected by the achievement of organisational
outcomes (Freeman, 1984). More inclusive definitions expand the scope of the stakeholder
group significantly and it could be argued that the broad approach tends to be adopted by
public organisations because they have historically engaged with a broad range of clients,
including the nominally powerless, interest and pressure groups in delivering services. More
recently, it has been acknowledged (Bone, Crockett, and Hodge, 2006) that the resolution of
contentious, complex social issues requires participation from a number of different publics
including stakeholders situated outside of the norm to bring in new perspectives.
Irrespective of the context in which it is applied, the stakeholder approach continues to be
contested in terms of its theoretical completeness (Agle, Donaldson, Freeman, Jensen,
Mitchell, and Wood, 2008). According to Friedman and Miles (2006), over thirty strands of
stakeholder theory exist, resulting in contestation and confusion in the literature and limiting
the development of the stakeholder theory. To try and simplify the confusion, stakeholder
theory has been distilled into three categories: descriptive, instrumental, and normative
(Friedman and Miles, 2006). Table 2 outlines the definitional differences between the three
categories (Reed, 2002).
Table 2: Definitional Differences of Stakeholder Theories
TYPE OF THEORY DEFINITIONS Descriptive Groups or individuals who can actually or potentially affect or
be affected by the achievement of organisational outcomes e.g. (Freeman, 1984)
Instrumental Stakeholders which the organisation considers could be taken into account from the following perspectives: organisational (Freeman, 1984; Mitchell et al., 1997) stakeholder-focal group (Friedman and Miles, 2006) stakeholder-network (Rowley, 1997)
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Normative Stakeholders who are considered to have a valid claim on the organisation e.g. property rights (Donaldson and Preston, 1995) common good (Freeman, 2004)
Table 2 illustrates that stakeholders can be defined in three fundamentally different ways. The
first category, descriptive approaches, tends to define stakeholders based on the perceived
influence that they can have on an organisation or the extent to which stakeholders are
impacted by organisational action. In the second category, instrumental models narrow the
focus by concentrating on the extent to which an organisation perceives that stakeholders
should be involved. The final category: normative theories, more narrowly define
stakeholders based on the organisation’s moral or contractual obligations to stakeholders.
While broad descriptive definitions have the potential to bring large numbers of stakeholders
to the fore, normative definitions may have the opposite impact by narrowing stakeholder
groups excessively, which could result in important stakeholders being overlooked.
Instrumental definitions, however, strike a balance between the broad and narrow approaches
by focusing on which stakeholders the organisation considers need to be taken into account to
achieve specific organisational outcomes.
Therefore, as baseline for this research, stakeholders are defined as groups or individuals who
can have either an actual or potential affect on governance network outcomes (Mitchell et al.,
1997, p. 869). This definition bounds the study by restricting the stakeholder pool to actors
who can impact or may be impacted by the activities undertaken by governance networks to
achieve results.
Leading from stakeholder definition, the classification of stakeholders has been undertaken in
a variety of ways in an effort to prioritise stakeholders (Achterkamp and Vos, 2007). Table 3
outlines the major approaches.
Table 3 Stakeholder Classification Systems
FOCUS CLASSIFICATION SYSTEM
Single attribute Fiduciary and non-fiduciary stakeholders (Goodpaster, 1991)
Assessing and managing stakeholders (Savage, Nix, Whitehead, and Blair,
1991)
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FOCUS CLASSIFICATION SYSTEM
Stakeholder agency (Hill and Jones, 1992)
Primary and secondary stakeholder (Clarkson, 1995)
Voluntary and involuntary stakeholders (Clarkson 1994 in Mitchell et al., 1997)
Stakeholder influencing strategies (Frooman, 1999; Frooman and Murrell, 2005)
Multiple attributes Relationship between organisation and stakeholders (Donaldson and Preston,
1995; Jones, Felps, and Bigley, 2007)
Managerial perceptions of stakeholder characteristics: power, urgency and
legitimacy (Mitchell et al., 1997)
Several of the classification systems described in Table 3 (Frooman, 1999; Frooman and
Murrell, 2005; Goodpaster, 1991; Hill and Jones, 1992; Clarkson 1994 in Mitchell et al.,
1997; Savage et al., 1991) use only a single dimension to classify stakeholders. The approach
of Goodpaster (1991) was to normatively classify stakeholders in accordance with fiduciary
responsibilities. However the remaining approaches to classification take on an instrumental
perspective: the extent of co-operation by stakeholders (Savage et al., 1991), the perceived
legitimacy of stakeholders (Hill and Jones, 1992), the extent to which stakeholder support is
essential to the organisation (Clarkson, 1995), the degree to which stakeholders have invested
resources in the organisation (Clarkson 1994 in Mitchell et al., 1997) and the extent to which
stakeholder wield influence through provision or withdrawal of resources (Frooman, 1999;
Frooman and Murrell, 2005). It could be argued, however, that these singly focused
approaches are too simplistic to provide a meaningful framework for classifying stakeholders
because of the complexities associated with network forms.
In contrast, two stakeholder classification systems (Donaldson and Preston, 1995; Mitchell et
al., 1997) have sought to capture the multidimensional nature of stakeholder interactions.
However, Jones et al. (2002) and Agle et al. (2008) have cast doubt on Donaldson and
Preston’s (1995) approach of categorising stakeholders as normative, instrumental or
descriptive. The criticism is in part due to the ongoing debate in the literature about the
validity of separating stakeholder theory into normative, descriptive and instrumental
classifications as advocated by Donaldson and Preston (1995). It has been argued (Agle et
al., 2008; Jones, Wicks, and Freeman, 2002) that Donaldson and Preston’s (1995)
classification of stakeholders is of limited value as a stakeholder classification system
because there is no fundamental difference between the categories. Agle et al.(2008) contend
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that Donaldson and Preston’s (1995) framework is conceptually implausible. It could also be
argued that Donaldson and Preston’s (1995) may be unworkable in practice because
interactions with stakeholders incorporate elements of all three categories. However despite
the criticisms, Donaldson and Preston’s (1995) framework continues to be supported by
theorists who contend that stakeholders have a moral right to be involved in issues that affect
them (Greenwood, 2007; Maharaj, 2008).
Moving beyond this impasse in the literature, Mitchell et al.’s (1997) model of stakeholder
identification and salience offers an alternative structure for framing and classifying
stakeholders in accordance with managerial perceptions of stakeholder characteristics. The
model theorises that managers should make decisions about stakeholder involvement based
on an assessment stakeholder salience. This assessment, it is argued, (Mitchell et al., 1997)
should be based on a consideration of the power of stakeholders and the urgency and
legitimacy of their claims. It has been acknowledged (Klijn, Koppenjan, and Termeer, 1995)
that power and legitimacy can affect who will be included in a network and therefore, the
network structure, the rules of engagement within the network and the outcomes achieved.
Consequently, it could be argued that the stakeholder salience model (Mitchell et al., 1997)
provides a highly relevant framework for theorising about how stakeholders are engaged by
governance networks.
Diagram 1 depicts the stakeholder identification and salience model (Mitchell et al., 1997),
highlighting the mixture of the stakeholder attributes: power, urgency and legitimacy, from
which are composed seven different stakeholder types. Each of these stakeholder types is
attributed with different behaviour patterns which it is argued (Mitchell et al., 1997),
influence the way that different stakeholders are perceived and approached by the
organisation.
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Diagram 1 Stakeholder Identification and Salience Model U
rgen
cy
Mod
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e sa
lienc
e st
akeh
olde
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Hig
h sa
lienc
e st
akeh
olde
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Low
salie
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stak
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The model incorporates three variables: power, urgency, legitimacy which are aggregated
into the construct of stakeholder salience. Within this model, Mitchell et al. (1997, p. 865)
have suggested that power is the ability of actors to achieve their desired outcomes and
derives from three dimensions: normative, coercive and utilitarian. While normative power is
demonstrated through the use of symbolic resources such as media attention; coercive power
is emanates from the application of physical sources including restraint or force (Friedman
and Miles, 2006). The final dimension, utilitarian power, is “the use of material means for
control purposes” (Etzioni, 1964, p. 59) and is exercised through control of resources,
particularly financial.
The second variable in the model, urgency is determined by the time sensitivity of a
stakeholder’s claim and the criticality or perceived importance of the claim to the
organisation (Mitchell et al., 1997). In this context, urgency implies a shifting power balance
in the relationship as a result of perceptions that a particular stakeholder’s claim is critical to
the organisation and that the claim warrants immediate attention by the organisation. Despite
the multi-dimensionality of urgency, Mitchell et al. (1997) go on to define as urgency
seemingly as a single dimension, “the degree to which stakeholder claims call for immediate
attention”. However it could be argued that criticality and temporality are discrete variables
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denoting importance and timeliness and therefore need to be measured in different ways. It
could also be argued that the treatment of criticality and temporality as discrete variables in
determining stakeholder salience would produce additional and different configurations of
salience to those predicted by Mitchell et al. (1997).
The third variable in the model, legitimacy, is defined as “a generalized perception or
assumption that the actions of an entity are desirable, proper, or appropriate within some
socially constructed systems of norms, values, beliefs, and definitions” (Suchman, 1995, p.
574). It has been argued that stakeholder legitimacy can be either normative: fulfilment of
legal or moral obligations (Gomes and Gomes, 2007) or derivative: resulting from
organisational acceptance of stakeholder claims due to their potential impact (Phillips, 2003).
Stakeholder salience, comprises various configurations of power, urgency and legitimacy
which determine the priority that should be given to stakeholder claims (Mitchell et al.,
1997). From the stakeholder perspective, to generate organisational action, stakeholders must
be aware of and willing to exercise their power with a sense of urgency and for the
organisation to consider their claims as legitimate (Mitchell et al., 1997). Table 4 outlines the
categories that result from the various combinations of power, urgency and legitimacy and
potential outcomes for each category.
Table 4 Categories of Stakeholder Salience
PRIORITY CATEGORIES COMBINATIONS OF ATTRIBUTES
OUTCOMES
None Non-stakeholder No power, urgency or legitimacy or immediacy
Irrelevant to the organisation
Low Dormant
Power but no interaction with organisation
Actors have no awareness of an issue or are unwilling to become involved
Discretionary
Legitimacy but no power and claims are not urgent
Actors seen as legitimate by the organisation but not afforded attention
Demanding Claims are urgent but no power or legitimacy
Actors strongly believe they have a claim but this is not acted on by the organisation
Moderate Dominant
Possess power and legitimacy but not currently pressing their claims on the organisation
Actors have a high expectation of support and receive significant attention
Dangerous
Hold urgency and power but insufficient legitimacy to cause the organisation act
Conflictual relationship with the organisation in which actors directly apply coercive, financial or normative power to achieve objectives
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PRIORITY CATEGORIES COMBINATIONS OF ATTRIBUTES
OUTCOMES
Dependent
Have urgent and legitimate claims but lack power
Actors collaborate with other stakeholders to achieve objectives and pressure the organisation
High Definitive Possess power, urgency and legitimacy
Organisation quickly responds to demands
Source: Mitchell et al., 1997
Table 4 indicates that stakeholders can be perceived from eight different perspectives ranging
from irrelevant, requiring no action to definitive, where managers have a clear and specific
requirement to act on the stakeholder’s claims immediately (Mitchell et al., 1997). However,
stakeholder salience is not a static concept because stakeholders can acquire or relinquish the
characteristics of power, urgency and legitimacy thus changing their categorisation (Preble,
2005). Given that the categories in Mitchell et al.’s (1997) model are a device for identifying
combinations of stakeholder salience, it could be argued that the categories cloud the intent of
the model which is to identify stakeholders and suggest appropriate managerial responses to
stakeholders based on various configurations of power, urgency and legitimacy. As a result,
the classification of stakeholders into rigid categories adds an unnecessary layer of
complexity to decision making about stakeholders.
In the first empirical test of the stakeholder salience model, Agle et al. (1999) examined the
relationship between power, legitimacy, urgency and salience in the context of CEO values
and corporate performance. Urgency was assessed from an organisational perspective and
both temporality and criticality were required to be present to indicate urgency. This study
found that CEO’s perceived that power, urgency and legitimacy were individually and
cumulatively related to stakeholder salience. However the study was limited in that it was
situated in a normative context i.e. CEO values and the findings were specifically related to
normative stakeholder theory (Agle, Mitchell, and Sonnenfeld, 1999).
In 2004, Friedman and Mason studied stakeholder salience in government subsidisation
decisions relating to construction of major sporting facilities. In assessing urgency, only
criticality was tested. The role of temporality in the determination of urgency was unclear. In
testing configurations of stakeholder salience, the authors found that only five out of the
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seven stakeholder categories as proposed by Mitchell et al. (1997) were evident in the case of
subsidisation of major sporting facilities. In a further empirical study which examined
stakeholder salience in the context of the Nashville Coliseum stadium, Friedman and Mason
(2005) found that a dormant stakeholder, the public, changed its status to the dangerous
stakeholder category by forcing a referendum about the development of the stadium.
However, like the previous study Friedman and Mason, (2005) criticality became the proxy
for urgency.
In 2007, Parent and Deephouse tested the stakeholder salience framework with the organising
committees of two large-scale sporting events. In this study, urgency was considered to
include either time sensitivity or criticality, departing from the extant literature in which both
time sensitivity and criticality are required components of urgency. Despite this issue, the
case studies found that the categories of stakeholders were more limited than theorised by
Mitchell et al. (1997), in that stakeholders tended to move between dormant, dominant and
definitive classifications (Parent and Deephouse, 2007). The study called into question the
relevance of four of the seven stakeholder categories identified by Mitchell et al. (1997) by
suggesting that the dormant, dominant and definitive classifications might be more applicable
in practice. This result supported Friedman and Mason’s (2005) findings that the dormant
stakeholder grouping is important.
In drawing these studies together, two aspects are important. Firstly, the preceding studies
have been inconsistent in their application of urgency as a variable, treating it as containing
only one element, criticality, or as including either criticality or temporality. Secondly,
despite this limitation, the finding of these studies appear to indicate that Mitchell et al.’s
(1997) conceptualisation of stakeholders into seven categories could more likely be
condensed into four categories: dormant, dominant, dangerous and definitive, beginning to
call into question the usefulness of Mitchell et al.’s (1997) classifications. Thirdly, although
the construct of urgency is considered to have two components criticality and temporality
(Mitchell et al., 1997, Agle et al., 1999), these variables have not been tested as individual
factors in stakeholder salience.
However, the application of the stakeholder salience model in more collaborative governance
settings raises a number of questions. Firstly, the stakeholder salience model has been
transplanted from the private sector context and there is limited evidence about how it
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operates in the public context (Friedman and Mason, 2004, 2005; Parent and Deephouse,
2007) and particularly in governance networks Given that none of these studies involved
testing the impact of stakeholder salience in networked arrangements this research provides
an opportunity to understand how stakeholder salience operates in governance networks.
Secondly, the stakeholder salience model perceives the organisation to be at the centre of the
nexus orchestrating stakeholder processes (Hill and Jones, 1992). However, the centre-
periphery approach overlooks the decentred nature of stakeholder interactions which was first
examined by Rowley (1997). Therefore, this study will investigate how governance networks
interact with stakeholders from a decentred perspective rather than from a centralised
approach.
Having considered stakeholder salience in some detail, stakeholder engagement, which, it
could be argued, is a mechanism for operationalising decisions about stakeholder salience, is
examined next.
Stakeholder Engagement
Stakeholder engagement describes a range of practices in which organisations take a
structured approach to connecting with stakeholders (Thomson and Bebbington, 2005) and
has been used for a range of organisational purposes: as a means to acquit organisational
accountability and responsibility to stakeholders (Gray, 2002), to elicit stakeholder
contributions (Sillanpää, 1998), manage risk (Deegan, 2002), construct organisational image
(Livesey and Kearins, 2002) and achieve managerial control (Owen, Swift, Humphrey, and
Bowerman, 2000). Within the public context, stakeholder engagement has been suggested as
a means of improving the quality of outcomes by harnessing different ideas and perspectives,
improving service delivery by exerting pressure on bureaucracies and creating more robust
communities through direct engagement in planning and delivery of services (Martin, 2003).
Over the past decade, the value of stakeholder engagement has become more apparent to
public organisations seeking to create dialogue with and between community groups and
business interests to achieve policy reform and enhanced service delivery (Fox, Ward, and
Howard, 2002). It has also been acknowledged that this type of participation “is particularly
important in developing long-lasting solutions to complex and intractable issues” (Australian
Public Service Commission, 2007, p. 263). However, to develop appropriate solutions to
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policy problems, it could be argued that governance networks need to extend the
development of relationships beyond network boundaries to include stakeholders (Innes and
Booher, 2003).
The starting point for this discussion of stakeholder engagement is Arnstein’s (1969) ladder
of citizen participation in public policy planning. Arnstein (1969) theorised that public
participation was motivated by a range of factors from manipulation to the desire to engender
citizen control. However the ladder of citizen participation was criticised for treating
participation as continuum (Bishop and Davis, 2002), being overly hierarchical and
portraying citizen control as the ultimate outcome of participation (Tritter and McCallum,
2006) thus diminishing its relevance in more collaborative environments.
However, despite these shortcomings, the ladder of participation, was adapted for the
stakeholder context and ‘re-emerged’ as a tool for understanding stakeholder engagement
(Friedman and Miles, 2006). In this model, it was theorised that the types of engagement
processes undertaken by organisations are indicative of the level of power ascribed to
stakeholders, ranging from non-participation through various degrees of tokenism,
involvement and power. However Friedman and Miles’ (2006) contribution did not
explicitly address legitimacy and urgency which are integral to Mitchell et al.’s (1997)
model.
As an alternative, in 2007, Greenwood moved away from the power perspective on
stakeholder engagement and developed a model of stakeholder engagement based on the
moral treatment of stakeholders. The main focus of this theoretical model was stakeholder
agency: meeting corporate responsibilities to stakeholders. In developing this model,
Greenwood (2007) sought to explore the relationships between stakeholder engagement and
their responsible treatment by organisations. While Greenwood’s model has not been
empirically tested, it could be argued that it provides a blueprint for beginning to understand
how the relationships between stakeholder engagement and stakeholder salience may unfold.
In partial support of this approach, Thomson and Bebbington (2005) focused on one element
of stakeholder salience i.e. power, in theorising that power differentials need to be addressed
in undertaking effective stakeholder engagement activities. However strategies examining
power differentials were not advanced.
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Greenwood’s (2007) model is the first to explore organisational treatment of stakeholders as
a factor in organisational choices about the extent of stakeholder engagement. However,
Greenwood’s (2007) model treated stakeholder engagement as a single variable. This is in
contrast to Leach et al.’s (2005) approach in which stakeholder engagement was
differentiated into two constructs: quality and quantity of stakeholder engagement as a
measure of the effectiveness of engagement opportunities offered by local authorities in the
United Kingdom. While establishing that relevance of quantity and quality to the study of
stakeholder engagement, Leach et al.’s (2005) research approached quality from the
standpoint of assessing process and outcome satisfaction with stakeholder engagement
initiatives. However in this study, quality of stakeholder engagement will be an assessment of
the types of contact between governance networks and stakeholders ranging from one way
communication to genuine dialogue processes (Crane and Livesey, 2003; Voci and
Hewstone, 2003). This approach is similar to that suggested by Friedman and Miles (2006)
who theorised that stakeholder engagement could include the following mechanisms:
brochures and websites, corporate plans, workshops, feedback mechanisms such as
questionnaires, interviews, bargaining processes, establishment of strategic alliances, joint
ventures, board representation and processes controlled by stakeholders.
Friedman and Miles (2006) have proposed a power based continuum of stakeholder
engagement activities beginning with one-way static communication techniques and
concluding with multi-party dialogical processes. Moving up this continuum, it appears that
as interdependency with stakeholders increases stakeholder engagement processes become
more collaborative. However, in keeping with Arnstein’s (1969) premise that the ultimate
objective of public participation was the transfer of control to citizens, Friedman and Miles
(2006) theorise that the highest level of stakeholder engagement would involve transfer of
control to stakeholders. It could be argued that the approach of transferring control is not
applicable in governance networks where power and responsibility are shared among network
participants.
Therefore, to obtain a more fine grained view of the relationship between stakeholder
salience and stakeholder engagement, both quality and quantity aspects of stakeholder
engagement will be examined. However, the optimum levels of stakeholder engagement and
types of activities that could be applicable to different configurations of stakeholder salience
are yet to be articulated. Achieving equilibrium between stakeholder salience and
18
engagement is particularly pertinent for governance networks because stakeholders can
seriously disrupt networks through withdrawal of resources or creating reputational damage.
Following on from this, the next section considers governance forms, particularly networked
arrangements and then discusses network management to reveal gaps in current knowledge
about how governance networks manage stakeholders.
Network Governance and Management
Governance is perceived as a mechanism for solving common problems at local, national and
global levels taking account of the relationships, rights and obligations of the actors facing
the problems and how power and authority play out (Newman, 2001). The literature tends to
focus on three major and idealised governance paradigms, unicentric or hierarchical forms
(state or firm hierarchy), multicentric (market) and pluricentric (network) (Lowndes and
Skelcher, 1998; Powell, 1990; Thompson, Frances, Levacic, and Mitchell, 1991; Van
Kersbergen and Van Waarden, 2004).
Hierarchical governance is characterised as a vertical or top down co-ordinating mechanism
which is based on the bureaucratic model of organisation (Kooiman, 2005; Peters and Pierre,
1998). By contrast, market governance is a more spontaneous co-ordination mechanism
which operates in a market context and makes use of multiple economic and judicial
institutions and contractual arrangements to govern economic transactions (Powell, 1990;
Van Kersbergen and Van Waarden, 2004).
While network governance is acknowledged as the overarching form of more collaborative
styles of governance (Lowndes and Skelcher, 1998), the literature also acknowledges the
concept of governance networks (Sorensen and Torfing, 2007) which are a mechanism for
public policy making and implementation which occurs through a web of relationships
between government, business and civil society (Klijn and Skelcher, 2007, p. 587).
However, the literature has acknowledged that governance networks can simultaneously
exhibit various hierarchical, market and networked arrangements through the adoption of a
hybrid approach (Considine and Lewis, 1999; Keast, Mandell, and Brown, 2006; Powell,
1990). That is, governance networks link together a range of actors through a mix of
governance modes one of which is network governance.
19
However, a strong link running through the governance network literature is the importance
of engaging with a range of actors as a means of improving service delivery and policy
outcomes by incorporating a range diverse ideas, insights, responses and solutions (Agranoff,
2007). The literature also refers to the outcomes of public policy as public outcomes: the real
or intended effects of government programs on the community (Van der Waldt, 2004). For
governance networks, it could be argued that outcomes will be context specific and
dependent upon the charter establishing the network and available resources. Therefore, the
involvement of stakeholders will be influenced by the political and institutional environments
in which the governance network exists.
Several factors that could influence the way that governance networks may undertake the
engagement of stakeholders have been identified. Firstly, it has been acknowledged that
governance networks comprise various mixes of hierarchical, market and networked
arrangements (Considine and Lewis, 1999; Keast et al., 2006; Powell, 1990). This hybridity
creates tension for governance networks seeking to engage with stakeholders within an
environment that blends aspects of three different modes of governance. As a result,
governance networks face the complexity of dealing with stakeholders in relationships that
can be dependent, contractual or interdependent. It could be argued that these factors may
influence the salience attributed to stakeholders as a result of these differing relationships.
Secondly, while power is seldom at the forefront of theorising about governance networks
(Klijn and Skelcher, 2007, p. 602), the literature has recognised that power distribution within
networks is asymmetrical, resulting in a series of power dependence relationships (Agranoff
and McGuire 2001). Differential power distribution is particularly pertinent to governance
networks as demonstrated by a number of studies (Agranoff, 2007; Eglene, Dawes, and
Schneider, 2007; Graddy and Chen, 2006; Provan and Milward, 1995) which show that
government can be an actor in governance networks. Given its potential to dominate, it is
possible that government, as a stakeholder, would be accorded higher salience and receive
preferential treatment to similarly salient stakeholders.
Thirdly, power differentials may also influence the composition and representativeness of
governance networks because membership may be the result of organisational representation:
government or non-government. However, Sorensen and Torfing (2003) contend that
individual actors may be unable to discard the responsibilities of belonging to a particular
20
organisation. The inability or unwillingness of network members to set aside their
representative role (Mandell and Keast, 2008) may influence decision making about
stakeholders, particularly as the result of power domination. It could be argued that this
impact may be more pronounced if there is direct political representation within the network
as a result of tension between public managers and democratic elected representatives. It
could further be argued that this tension may be in part due to the focus of public managers
on the public interest and the role elected representatives to serve their electorates.
Fourthly, according to Provan and Milward (2001, p. 422), the objective of “network
organizers is to minimally satisfy the needs and interests of stakeholders at network and
organization levels, while emphasizing the broader needs of the community and the clients
the network must serve”. In a study of stakeholder engagement by local authorities in the
United Kingdom, Sullivan (2008, p. 16) found that “stakeholder engagement is distinct and
different from wider public engagement” resulting in tension between the claims of organised
stakeholders and the requirement of the broader community. Alternatively, it could be argued
that this distinction between community and stakeholders is a reflection of different
stakeholder types which may have different combinations of salience which in turn may
influence choices of stakeholder engagement techniques.
Finally, given that network management is the collective responsibility of network
participants (Provan and Kenis, 2005), decision making about stakeholders by governance
networks may differ from the broader organisational context because different management
techniques have been recommended for governance networks. A wide range of management
strategies to guide network interactions (Agranoff and McGuire, 2001, 2003; Koppenjan and
Klijn, 2004; Mandell, 2001) have been identified in the literature. A synthesis of the
contributions of Agranoff and McGuire (2001), Keast and Hampson (2007), Klijn and
Koppenjan (2000) and McGuire (2006) indicates that the following management functions
are undertaken by networks: activating-recruiting members and resources, framing-
establishing the vision and rules, mobilising-creating joint commitment and synthesising-
building and maintaining relationships. From this, it could be argued that engaging with and
managing actors within network processes is a fundamental aspect of network management
and this is supported by Agranoff (2007). Furthermore, Keast and Hampson (2007) in a
recent study of a Cooperative Research Centre as an interorganisational innovation network,
reinforced that relationships are a significant feature of networks and that these relationships
21
need to be strategically managed to obtain the best possible results. However despite this
strong relational focus, a gap has been identified in the literature: inclusion and engagement
of stakeholders as a specific actor group, has yet to be explicitly addressed by governance
networks.
While the stakeholder concept is evident in the governance network literature (Agranoff,
2007; Agranoff and McGuire, 2001, 2003; Edelenbos and Klijn, 2006; McGuire, 2002), it
could be argued that a more in-depth understanding of how governance networks interact
with stakeholders, the resultant combinations of stakeholder salience and the appropriate
engagement strategies for each of these combinations of stakeholders is required. To begin to
fill this gap, a model of stakeholder salience and engagement is proposed and is discussed
next.
Model of Stakeholder Salience and Engagement
This study will elaborate a model of stakeholder salience and engagement and show its
usefulness in explaining how differing combinations of stakeholder salience may be related to
the extent of stakeholder engagement, as an initial step to understanding how governance
networks engage with stakeholders. This model builds on and extends the work stakeholder
identification and salience model (Mitchell et al., 1997), the ladder of stakeholder
management and engagement (Friedman and Miles, 2006) and the model of stakeholder
engagement and moral treatment of stakeholders (Greenwood, 2007).
The theoretical framework for this study departs from Mitchell et al.’s (1997) model in two
major respects. Firstly, the construct of urgency has been divided into two individual
attributes: criticality and temporality because, it is theorised, that they represent different
concepts. The replacement of urgency with criticality and temporality thus increases the
combinations of salience from eight to sixteen as indicated in Table 5. Secondly, the
categorisations of salience established by Mitchell et al. (1997) will not be a feature of the
model of stakeholder salience and engagement so as to maintain the focus on combinations of
salience rather than categorisations.
22
Table 5 Revised Combinations of Stakeholder Salience
COMBINATIONS OF SALIENCE ORGANISATIONAL RESPONSE 1. Stakeholder possesses power; claims are considered to be
legitimate, critical and require immediate attention Attends to stakeholder demands with high priority
2. Stakeholder has power; claims are considered to be legitimate and critical but do not warrant immediate attention
Attends to stakeholder claims within in normal organisational timeframes
3. Stakeholder has power ; claims are considered to be critical and require immediate attention but are not legitimate
Manages contentious relationship in which stakeholder directly apply coercive, financial or normative power to achieve objectives
4. Stakeholder has both power; claims are legitimate and deserve immediate attention but are not critical
Closely monitors the criticality of claims and acts if they become critical
5. Stakeholder has no power; claims are considered to be legitimate and critical but not worthy of immediate attention
Manages stakeholder who may collaborate with other stakeholders to apply pressure to achieve objectives
6. Stakeholder has power and claims are considered to be critical and worthy of immediate attention but of insufficient legitimacy to cause the organisation act
Manages contentious relationship
7. Stakeholder has power; claims are legitimate and worthy of immediate attention but not critical
Monitors stakeholder and their claims
8. Stakeholder lack power; claims are legitimate but not critical or worthy of immediate attention
Monitors stakeholder and their claims for evidence of stakeholder coalition formation
9. Stakeholder lacks power; claims are both critical and worthy of immediate attention but not legitimate
Monitors stakeholder
10. Stakeholder lacks power; claims are legitimate and warrant immediate attention but are not critical
Organisation monitors stakeholder and their claims
11. Stakeholder has both power and claims would be considered legitimate but stakeholders are not interacting with the organisation
Organisation seeks to involve stakeholder who has no awareness of an issue or are unwilling to become involved
12. Stakeholder has power; claims are not critical, worthy of immediate attention or legitimate
Organisation manages contentious relationship
13. Claims are critical but not worthy of immediate attention or legitimate and stakeholder has no power
Organisation keeps stakeholder informed
14. Claims are legitimate, worthy of immediate attention but not critical; stakeholder hold no power
Organisation monitors stakeholder and their claims
15. Stakeholders has no power; claims legitimate but are neither critical nor require immediate attention
Organisation keeps stakeholder informed
16. Stakeholder has no power; claims not considered legitimate, critical or requiring immediate attention.
None
Table 5 show the various combinations of stakeholder salience and potential organisational
responses to stakeholders holding various combinations of power, legitimacy, criticality and
temporality. Analysis of the potential organisational responses raises several issues. Firstly,
the more attributes a stakeholder possesses, the greater attention their claims will be paid. For
example, combinations 1 to 4 which incorporate three or more attributes, may receive more
comprehensive and immediate attention. Secondly, it appears that power may be more likely
to motivate the organisation to react as indicated in combinations 1 to 4, 6 and 11. Thirdly,
23
stakeholders in combinations 13 to 16 which incorporate one or no attributes may be paid
minimal or no attention by the organisation. Fourthly, in combinations 5 and 11, where
stakeholders collaborate to pressure the organisation into paying greater attention to
stakeholder claims. Finally, in combination 11, the organisation may proactively seek to
involve stakeholders who have no awareness of an issue or are unwilling to become involved
because they have organisational value through resources such as funds, knowledge or
legitimacy.
Having explained the impact of salience in the proposed model, the stakeholder engagement
aspects will now be explicated. The theoretical framework for this study departs from the
traditional examination of stakeholder engagement as a single variable (Greenwood, 2007)
and builds on Leach et al.’s (2005) approach of treating quality and quantity of stakeholder
engagement as discrete variables. The quantity of stakeholder engagement will be considered
as the number of engagement opportunities made available to stakeholders (Leach et al.,
2005). The quality of stakeholder engagement will be considered as contact between
governance networks and stakeholders (Voci and Hewstone, 2003), ranging from one-way
communication to dialogical processes (Crane and Livesy, 2003).
The Model of Stakeholder Salience and Engagement presented in Diagram 2 combines and
extends the work of Mitchell et al. (1997), Friedman and Miles (2006) and Greenwood
(2007). This model suggests that there may be an optimal level of engagement for the
different levels of salience assigned to stakeholders.
Diagram 2 Model of Stakeholder Salience and Engagement
24
Diagram 2 depicts the proposed quality and quantity of engagement notionally rated along a 5
point scale for each of the sixteen combinations of stakeholder salience as outlined in Table
5. The scale for quantity of engagement was drawn from the intergroup contact literature
(Tausch, Tam, Hewstone, Kenworthy, and Cairns, 2007) while the scale for quality of
engagement was derived from the ladder of stakeholder management and engagement
(Friedman and Miles). These combinations in diagram 2 represent stakeholders who range
from possessing none of the attributes of power, legitimacy, criticality and temporality
through to possession of all of these attributes. Proposed engagement strategies that may be
applicable to different combinations of stakeholder salience are outlined in Table 6.
Table 6 Proposed Stakeholder Engagement Strategies
STAKEHOLDER COMBINATION
ENGAGEMENT STRATEGIES PURPOSE
1 Moderate number of regularly scheduled two-way dialogue workshops with network as a whole
Allows stakeholder to participate with network and thus influence outcomes
2 Moderate number of regularly scheduled two-way dialogue workshops with network as a whole
Allows stakeholder to partner with network and influence outcomes
3 Moderate number of contacts between stakeholder and network members to discuss contentious issues and potentially moving to conflict resolution
Allows stakeholder to be heard and network to monitor changes in salience level
4 Frequent contact between stakeholder and network member with responsibility for the specific stakeholder
Exchange information and to identify changes in stakeholder salience
5 Moderate number of bilateral negotiation processes followed by multi-stakeholder meetings
Neutralise power of the coalition
6 Moderate number of contacts between stakeholder and network members to discuss contentious issues and potentially moving to conflict resolution
Allows stakeholder to be heard and network to monitor changes in salience level
7 Moderate number of meetings between stakeholder and network member with responsibility for the specific stakeholder
Exchange information and to identify changes in stakeholder salience
8 Moderate number of bilateral negotiation processes followed by multi-stakeholder meetings
Neutralise power of the coalition
9 Infrequent contact between stakeholder and network member with responsibility for the specific stakeholder
Exchange information and to identity changes in stakeholder salience
10 Infrequent contact between stakeholder and network member with responsibility for the specific stakeholder
Exchange information and to identity changes in stakeholder salience
11
Stakeholder invited to become a member of the network
Allows stakeholder to partner with network and thus influence outcomes
25
STAKEHOLDER COMBINATION
ENGAGEMENT STRATEGIES PURPOSE
Infrequent contact between stakeholder and network member with responsibility for the specific stakeholder
Identity changes in stakeholder salience
12 Minimal number of contacts between stakeholder and network members to discuss contentious issues
Information gathering and allowing stakeholders to be heard
13 Information infrequently published: on websites, in brochures and annual reports and other static communication channels
Keep stakeholder informed
14 Information infrequently published: on websites, in brochures and annual reports and other static communication channels
Keep stakeholder informed
15 Information infrequently published: on websites, in brochures and annual reports and other static communication channels
Keep stakeholder informed
16 None
The proposed model of stakeholder salience and engagement suggests that sixteen
stakeholder salience combinations with differing permutations of quality and quantity are
spread across seven clusters of stakeholder engagement. However, combination 11 appears
twice in the model because two different stakeholder engagement strategies may be
applicable. If it is decided that the stakeholder has resources that are important to the
network, managerial effort may be put into “courting” stakeholders in combination 11 to
become closely engaged with the network. Alternatively, if combination 11 stakeholders are
not considered to possess important resources, a more passive engagement strategy may be
selected.
At the lowest level, combination 16, no action would be taken by the networks because the
stakeholder possesses none of the attributes of stakeholder salience. Combinations 13 to 15
which incorporate only one attribute of stakeholder salience, would receive low volume and
quality of engagement. Mass one- way communication strategies such as publication of
information on website, brochures and annual reports would be cost effective ways of
providing information to these stakeholders while keeping them linked to the network in a
loose arrangement. Active relationships would not be sought as the network seeks to
maintain these stakeholders at arm’s length to avoid over servicing.
In the second cluster, combinations 9, 10, 11 and 12, stakeholder engagement would be
infrequent but moving into establishing and maintaining various levels and types of personal
contact with the network. In the case of combination 12 where the stakeholder has only one
26
attribute; power, but may seek to press their claims vigorously, a more proactive strategy
reflecting the importance of power in the stakeholder salience equation may be appropriate.
To avoid over-servicing or over committing resources to certain relations this could involve a
minimal number of structured meetings between a set of network members and the
stakeholder to discuss contentious issues and provide the opportunity for the stakeholder to
be heard with the objective of reducing the intensity with which they prosecute their claims.
For combinations 9, 10 and 11, infrequent meetings with a network member with
responsibility for the specific stakeholder would be undertaken to encourage information
exchange and allow the network to detect any changes in salience which may require an
adjusted stakeholder engagement strategy. However, it could be argued that networks would
need to carefully design engagement activities which balance the investment of time and
resources and deal directly with stakeholder expectations of influencing outcomes.
In the third cluster covering stakeholder combinations 3 and 5 to 8, the networks would offer
moderate levels of both quality and quantity of engagement. However, it is theorised that
two types of strategies may be relevant to this cluster. For combinations 5 and 8 in which
stakeholders may coalesce to achieve their objectives, strategies designed to neutralise the
power of the coalitions are suggested. This could be achieved through bilateral negotiations
with individual stakeholders prior to multi-stakeholder meetings being convened. Strategies
for combinations 3, 6 and 7 propose personal contact between the networks and stakeholders.
It is envisaged that this personal contact would incorporate two way dialogical processes
which allow discussion of contentious issues and as a mechanism for networks to monitor
changes in salience, particularly an increase in power which may warrant a higher quality or
quantity of stakeholder engagement. While acknowledging that a moderate volume of
stakeholder engagement could be inevitable as a result of agitation by stakeholders, it is
theorised that the network would seek to closely control the quality of engagement.
For cluster four which contains combination 4, given that the stakeholder has both power and
legitimacy, the frequency of the contact with the network would be increased through
regularly scheduled meetings with a network member who has with responsibility for the
specific stakeholder. The purpose of these meetings would be to exchange information and
monitor changes in salience which would require a higher level of stakeholder engagement to
avoid potential created by stakeholder commentary.
27
In the fifth cluster, combinations 1 and 2 represent the highest levels of salience. It could be
argued that network resources would be expended on ensuring a high level of continuing
engagement of these types of stakeholders. While the stakeholders in this cluster would
receive the highest quality processes, it is argued that that a lower frequency would be
required because of the pre-existing trusting relationships incorporating high levels of social
capital (Andriof and Waddock, 2002) that have developed between network members and
stakeholders. As a result it could be argued that high levels of contact would not be necessary
to maintain the relationship, provided that opportunities to participate in high quality of
engagement processes are made available. Therefore, stakeholders in clusters 1 and 2 would
be invited to participate in infrequent two way dialogue processes involving the entire
network and permitting the stakeholder to influence outcomes in a collaborative arrangement.
In the sixth cluster which incorporates combination 11, high quality and quantity stakeholder
engagement processes are proposed where the network is seeking closer involvement with
this stakeholder because they hold important resources but the stakeholder does not realise
that they have a claim or they are employing a withholding strategy to force the network to
change. From a resource dependency perspective, some stakeholders in combination 11
could be assessed as being highly valuable to the network and, therefore, effort expended to
engage with these stakeholders and incorporate them closely into network processes. To
attract and retain these stakeholders may be invited to become part of the network and offered
the opportunity to influence network outcomes. However this calls into question Mitchell et
al.’s (1997) contention that stakeholders holding only power and legitimacy would be of
lower importance.
The model of stakeholder salience and engagement proposed through identification and
analysis of the gaps in the literature provides a comprehensive framework for decision
making about stakeholders by governance networks. Application of this model will show the
extent to which it predicts governance network responses to sixteen combinations of
stakeholder salience and the proposed stakeholder engagement strategies for each
combination.
The implications of this model are three fold. Firstly, this model is the first to treat
stakeholder urgency as two separate variables, resulting in additional combinations of
stakeholder salience which could potentially result in better targeting of stakeholder
28
engagement strategies. However the potential increase in stakeholder salience combinations
is at odds with the findings of Deephouse and Parent (2007) and Friedman and Mason (2004,
2005) who found that fewer categories of stakeholder existed than theorised in Mitchell et
al.’s (1997) model. It could be argued that these findings may be a result of confusion about
Mitchell et al.’s (1997) definitions of the categories, a problem which is eliminated in this
study by focusing in combinations of salience.
Secondly, the proposed model is the first to theorise a link between stakeholder salience and
stakeholder engagement. However, the model goes further in suggesting that stakeholder
engagement is composed of two variables: quality and quantity. This study will test the extent
to which decisions about stakeholder salience link to quality and quantity of engagement
strategies. Finally, the model will used a mechanism to test the how the issues that are
peculiar to governance networks; power differentials, network management practices, the
community-stakeholder dichotomy and the possibility that three modes of governance may
operate simultaneously, impact on stakeholder salience and engagement.
This investigation will be undertaken through case studies of three governance networks in
the infrastructure domain and will consider the breadth and depth of stakeholder
relationships. The research questions for this study are outlined next.
RESEARCH QUESTIONS
This research combines and presents a conceptual framework developed from examining the
mechanisms for classification and engagement of stakeholders, specifically the stakeholder
identification and salience model (Mitchell et al., 1997), the ladder of stakeholder
management and engagement (Friedman and Miles, 2006) and the model of stakeholder
engagement and moral treatment of stakeholders (Greenwood, 2007).
Consequently, the conceptual framework developed in this research will be used to answer
the following research question:
RQ1 Who or what decides how stakeholders are optimally engaged by governance
networks delivering public outcomes?
It will also answer three more specific research questions:
RQ2 What levels of power, legitimacy, temporality and criticality are attributed to
stakeholders?
29
RQ3 What features of governance networks affect attributions of power, legitimacy,
temporality and criticality?
RQ4 How do differing combinations of power, legitimacy, temporality and
criticality relate to the quality and quantity of stakeholder engagement undertaken
with stakeholders?
CONCLUSION
Research Gaps
In previous sections, the theoretical underpinnings of this research: governance networks and
stakeholders were examined and a number of gaps identified. Firstly, although the literature
has considered stakeholder salience in some depth (Mitchell et al., 1997), previous studies
have treated the construct of urgency as a single variable despite widespread
acknowledgment (Agle et al., 1999; Friedman and Miles, 2006; Mitchell et al., 1997) that it
comprises two elements: criticality and temporality. However, treating urgency as two
discrete variables: criticality and temporality, may result in different attributions of
stakeholder salience than those proposed by Mitchell et al. (1997).
Secondly, the relationship between stakeholder salience and stakeholder engagement has yet
to be examined. As a consequence, there is no clear understanding of how decisions about
stakeholder salience impact on decisions about stakeholder engagement. Furthermore, the
concept of stakeholder engagement has generally been treated as a single variable
(Greenwood, 2007), other than in Leach et al.’s 2005 study. Therefore, there has been little
theoretical development about how variations in quality and quantity of stakeholder
engagement should differ for different types of stakeholders. Studying stakeholder salience
and its relationship with stakeholder engagement as a function of quality and quantity of
engagement will extend the stakeholder literature by showing how stakeholder salience
impacts on decisions about the types of engagement processes implemented.
Finally, the literature has identified stakeholders an actor group with whom governance
networks interact (Bell and Park, 2006). However the theory of governance networks has not
developed to the point of exploring interactions with stakeholders as a specific actor group or
how these interactions may occur within an environment in which three modes of
governance: hierarchical, market and network operate simultaneously. Taking into
consideration the governance network environment, this study will provide some initial
30
indications about one aspect of interactions between governance networks and stakeholders:
the link between stakeholder salience and engagement.
Therefore, new knowledge about how stakeholder salience decisions are linked to stakeholder
engagement activities will be created through testing of the proposed model of stakeholder
salience and engagement. The following research questions will be used in a test of this
theoretical framework.
Contribution to the Literature
This research will contribute to both the stakeholder and governance network theory. Firstly,
this research will extend stakeholder theory by showing how decisions about stakeholder
salience influence the types of stakeholder engagement practices implemented. Secondly it
will extend the governance network literature by clarifying how governance networks
identify types of stakeholders based on combinations of stakeholder salience and choose
corresponding engagement strategies. Thirdly, the study will also provide a better
understanding of the linkages governance networks make between stakeholder salience and
engagement.
31
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