The icebreaker for this Discussion is as follows:

share a quote with the class that reflects something about you, your life, and your experiences.

Discuss the case surrounding self-help guru James Arthur Ray, who was recently sentenced to two years in prison for the deaths of three people in a 2009 sweat lodge

ceremony in Arizona. What are your thoughts about his conviction and sentence?

Is there a line between protecting cultural traditional healing and protecting people’s lives/health? If so, what is the line? Who determines it?
Please remember everyone is entitled to express their opinions and discussions or differences of opinion must remain respectful.

Ó Springer 2007
Journal of Business Ethics (2008) 79:395–405
DOI 10.1007/s10551-007-9405-5
Stakeholder Management Capability:
A Discourse–Theoretical Approach
ABSTRACT. Since its inception, Stakeholder Management Capability (SMC) has constituted a powerful
hermeneutic through which business organizations have
understood and leveraged stakeholder relationships. On
this model, achieving a high level of capability largely
depends on managerial ability to effectively bargain with
stakeholders and establish solidarity vis-a`-vis the successful
negotiation, implementation, and execution of “win–
win” transactional exchanges. Against this account, it is
rightly pointed out that a transactional explanation of
stakeholder relationships, regarded by many as the bottom
line for stakeholder management, fails to provide managerial direction regarding how to resolve a variety of
normative stakeholder claims that resist commoditization.
In response to this issue, this paper has two overlapping
goals. It seeks to elaborate a discourse theoretical
approach to the problem by first drawing out Jurgen
Habermas’ theory of communicative action and delineating the various types of rational discourse. Second, the
paper attempts to present concrete implications for SMC
relative to reshaping the contours of rational, process,
and transactional analysis in light of central discourse
theoretical conclusions.
KEY WORDS: critical theory, discourse ethics, stakeholder management capability, stakeholder management
theory, communicative action
Managerial stakeholder models often represent
attempts to understand and describe a wide variety of
business relationships as forms of transactional
Dr. Abe J. Zakhem works primarily in the areas of ethical theory
and business ethics. He has worked in private industry as a
senior management consultant and chief operating officer and
is currently an assistant professor at Seton Hall University.
Abe Zakhem
exchange. In very general terms, transactional relationships involve the mutual and voluntary trade of
assets for gain. Now broadly construed, ‘‘assets’’
correspond to a wide range of tangible (e.g., capital
and labor) and intangible (e.g., goodwill and social
capital) interests and associated metrics. Since its original characterization (Freeman, 1984), the notion of
Stakeholder Management Capability (SMC) has
constituted one of the more influential and transactional frameworks for understanding and leveraging
stakeholder relationships. Essentially, SMC involves
managerial analysis at rational, process, and transactional levels. Corresponding to each level of analysis,
managers are charged with: 1) mapping stakeholders
and identifying their perceived stakes, 2) structuring
organizational processes to reflect and align organizational and stakeholder goals and expectations, and
3) negotiating transactions or ‘‘bargains’’ with stakeholders sufficient for ‘‘balancing’’ competing interests
and surfacing discontent. On this model, achieving a
high-level of capability, indeed, the very ‘‘bottom
line’’ for SMC, comes down to the success or failure
of transactional exchanges (Freeman, 1984, p.69).
Provided that managers execute ‘‘win–win’’
exchanges, SMC promises a powerful and useful
heuristic for effective strategic management (Carroll
and Bucholtz, 2006). Despite the optimism, this
strategic and largely instrumental approach has come
under fire. It is rightly pointed out that although a
transactional account of stakeholder relationships may
help to balance stakeholder currencies, SMC fails to
provide managerial direction regarding how to conceptualize, address, and resolve normative interests
that resist commoditization. Adapting a common
example, normative demands for the end of ‘‘sweatshop’’ labor are often not leveraged as pleas for
balancing the transactional interests of ‘‘slave’’ labor
against the interests of the business organization.
Abe Zakhem
On the contrary, claims of this kind constitute
outright rejections of exploitive labor practices by
way of a universal appeal to non-transferable human
rights. Without much effort we can identify a wide
variety of similar claims (e.g., deeply held community values and demands for corporate legitimacy)
that call for the recognition and enforcement of
deeply held and non-economic moral obligations.
To reduce such interests to the status of negotiable
assets seems both morally objectionable and too
simple a model for effectively capturing the complex
nature of normative conflict (Orts and Strudler,
2002, p.222). The problem is further exacerbated by
the fact that any single strategic initiative can serve
as a normative flash point for competing stakeholder
conceptions of that, which is good, right, and
Certainly, the normative and practical limitations
of a purely transactional orientation to stakeholder
management constitutes a recognized concern.
Within stakeholder literature, this concern has been
met with rather traditional and largely deontological
attempts to instill in managerial analysis a ‘‘moral
point of view’’ that is sufficient for integrating
conceptions of the good and the right (Evan and
Freeman, 1993). Expanding the debate, this paper
addresses normative SMC concerns from a discourse–theoretical perspective. Accordingly, the first
part of the paper outlines the central features of
Ju¨rgen Habermas’ theory of communicative action,
discourse ethics, and political theory and sets up a
general framework for a discourse–theoretical
approach. Particular attention will be paid to
defining a ‘‘moral point of view’’ from a discourse
ethical perspective. The second part advances
previous applications of Habermasian critical theory
to stakeholder management by recasting the SMC
categories of rational, process, and transactional
analysis in light of central discourse–theoretical
principles. Finally, the third and final part summarizes the following conclusions. First, that rational
stakeholder mapping should be regarded as a
dynamic and discursive process that is ultimately
driven towards mutual understanding and participatory solidarity. Second, that overcoming gaps
between discourse and practice requires continued
process analysis at both strategic and operational
levels. Lastly, that the ‘‘bottom line’’ for SMC must
be determined from a ‘‘moral point of view.’’
Communicative action and discourse
Echoing prominent social action theory, Habermas
supports the claim that social solidarity and order
require a basic level of norm regulated coordination
and conduct. Moving beyond traditional attempts to
account for the ‘‘binding’’ power of social norms,
Habermas advances the concept of communicative
practices. Properly defined, communicative practices
refer to those social interactions that are driven
towards dialogically motivating, sustaining, and
renewing intersubjective consensus and mutual
understanding (Habermas, 1984, p.17). In short,
Habermas explains that speakers of a language
express criticizable validity claims concerning how
social action ‘‘ought to be’’ structured. Speakers
further warrant that, if called upon, they will provide
publicly justified reasons and point to shared
convictions that support their contentions. Understanding the very conditions of validity, hearers
likewise commit to respond with counteracting
reasons in the event of disagreement and dispute.
Collectively, both parties commit to an intersubjective and consensual process of reasoning with
the illocutionary goal of achieving mutual
understanding. Habermas refers to this process as
‘‘communicative reasoning’’ (Habermas, 1984,
p.11). Within this framework, social norms ultimately owe their ‘‘binding’’ force to the fact that
definitive obligations on the parts of speakers
and hearers are incurred in the collective pursuit of
rational and consensual agreement.
Although foundational, communicative practices
certainly do not account for or adequately explain all
of the mechanisms affecting social order and coordination. In fact, communicative appeals are often
rejected in favor of dogmatically held worldviews
and perlocutionary aims and goals. Habermas uses
the category of ‘‘rational-purposive’’ action to
explain the mode of reasoning at work in such situations. As opposed to communicative reasoning and
action, rational-purposive reasoning is not oriented
towards mutual understanding and consent and tends
to assess situational significance relative to an agent’s
own ‘‘privately held’’ interests and standards of
choice. Although a necessary component of social
interaction and coordination, Habermas observes
that lifeworld orientations dominated by operationalized forms of rational-purposive reasoning tend to
Stakeholder Management Capability
reduce meaningful action to ‘‘strategic action.’’
Strategic actions are thusly defined as attempts to
influence situations and the behavior of other social
agents with the intent of advancing individual ends
(Habermas, 1984).
The pervasive rationalization of strategic orientations, however, carries with it two interrelated
problems and one clear way out. First, Habermas
observes that the reduction of meaningful social
interaction to strategic considerations resoundingly
erodes the communicative ‘‘glue’’ that produces
mutual understanding and social solidarity. This
erosion in turn contributes to such social pathologies
as lifeworld fragmentation, legitimation crises, anomie, alienation, and social dissonance (Habermas,
1987, p.143). Second, strategic actions tend to
devolve into the use and application of morally
questionable means, such as force, threats, violence,
or inducements to manipulate rational opponents.
For Habermas, the solution to this problem does not
rely on a simple denunciation of strategic actions. If
we desire to avoid the ill effects of strategic action,
then we first ought to harmonize our plans and
pursue our individual and private goals on the
condition of communicative agreement (Habermas,
1984, p.86). In other words, communicative agreement and action must serve as the horizon against
which strategic actions are understood, evaluated,
and harmonized. When communicative bonds are
broken, which is often the case in modern, pluralistic
societies, we require a complementary process
through which the ‘‘fabric’’ of communicative
action is repaired (Smith, 2004, pp. 318–320).
In order to draw out such a process, recall Habermas’ theory of communicative action. As noted,
communicative action rests on expressed warrants
and commitments directed towards an intersubjective and dialogical pursuit of mutual understanding.
Distinct from motivating rational participants by way
of brute force or enticement, the rationality inherent
in communicative practices is ‘‘seen in the fact that a
communicatively achieved agreement must be based
in the end on reasons’’ (Habermas, 1984, p.17).
Further, all competent speakers of language are
aware of these conditions of validity and likewise
bear some level of communicative obligation. Thus
from the very beginning, communicative practices
point to a highly cognitive and ‘‘argumentative’’
form of conflict resolution. In this sense,
‘‘argumentation’’ does not refer to mere rhetorical
debate. On the contrary, ‘‘argumentation’’ marks a
reflective form of communicative action whereby
competent speakers can thematize and dispute
operative validity claims with the aim of achieving
mutual understanding (Habermas, 1984, p. 25). In
other words, Habermas regards the turn towards
argumentation as constituting a rational ‘‘court of
appeal’’ that makes it possible to reestablish communicative understanding in spite of participatory
disagreement (Habermas, 1984, p.17–18).
Habermas further explains that efforts to
argumentatively preserve communicative action in
the face of disagreement must meet certain dialogical
conditions. In general, these dialogical conditions
must collectively ensure that validity claims are the
objects of discussion and that discursive outputs
reflect an intersubjective and rationally motivated
agreement. Habermas specifies certain dialogical
conditions within the framework of the discourse
principle (D). In its most basic form, (D) states that
‘‘just those action norms are valid to which all
possibly affected persons could agree as participants
in rational discourses’’ (Habermas, 1996, p. 107). As
such, (D) is the point of view from which norms of
action can be impartially justified. Implied by (D),
the general requirements for rational discourse include: the exclusion of coercive forces and strategic
influences, truthfulness, freedom of access to information, equal participatory rights, and reciprocal
role taking and ‘‘ideal role taking,’’ or the reciprocal
reversal and checking of participatory points of view.
As such, discourse creates the necessary space
whereby competent speakers disengage from problematized action contexts, isolate validity claims, and
reach a rationally and communicatively motivated
agreement (Habermas, 1996, pp.108–109).
Whereas (D) represents an ‘‘ideal’’ and ‘‘irreducible’’ order that is ‘‘built into’’ communicatively
structured forms of life in general, actual discourses
take on different forms and require different sorts of
discursive rules. Much of Habermas’ more recent
work in political theory and discourse ethics relies
on distinguishing the separate realms of pragmatic,
ethical, moral, and legitimacy based discourses
(Habermas, 1996; 1993; 1990). While each form of
discourse in some way reflects (D) and thus requires
the same basic sorts of discursive rules, operationalized discourses differ with respect to various features:
Abe Zakhem
the discursive goals at hand, argumentative criteria,
the required level of preexisting and background
consensus, the scope of the validity claim in question, and the status of discursive participants (Reed,
1999). In short, as the nature of the validity claim in
question changes, the contours of rational discourse
likewise change and imply different and more or less
stringent cognitive and procedural demands. In
order to draw out these distinctions, the following
sub-sections briefly explain the different forms of
discourse and clarify that which constitutes and gives
dialogical weight to reasoning from a ‘‘moral point
of view.’’
Pragmatic discourse
Pragmatic discourse centers on collectively determining the ‘‘best’’ way to achieve predetermined
ends, preferences, and goals. While engaged in
pragmatic discourse, participants advance various
strategic or technical recommendations and evaluate
possible courses of action in light of accepted
decision-making criteria. More often than not,
pragmatic strategies are assessed against a standard of
efficiency and direct participatory attention towards
the critical evaluation of empirical data (Habermas,
1996, p. 160). The selection of the particular
strategy would then provide a rational basis for
implementing certain situational definitions and
norms and providing a context for understanding
and interacting with others. It is critical to note that
a discursive assessment of pragmatic validity claims
requires a high-level of preexisting communicative
consensus relative to that which is determined to be
good, right, and legitimate. So, even as (D) ideally
requires the consideration of all possibly affected
persons, pragmatic discourse must draw on a previously achieved communicative consensus.
Accordingly, the outputs of pragmatic discourse
constitute ‘‘hypothetical’’ imperatives, ultimately
grounded in particular and historically and culturally
contingent social action situations. When this
shared level of meaning is called into question (i.e.,
the validity claims turn from pragmatic contestations to questions concerning the good, right, or
legitimate), the application of (D) takes a different
form as do the corresponding features of rational
Ethical discourse
Distinct from pragmatic discourse, the goal of ethical
discourse is to collectively determine that which is
‘‘good’’ for an individual, community, or association.
As such, ethical discourse counts as one distinct realm
of normativity (Reed, 1999b). Engaging in ethical
discourse involves proffering arguments in the form of
‘‘clinical advice’’ with the intent of reaching a consensus over guiding values or ‘‘deep preferences.’’ In
other words, ethical discourse engages participants in a
higher form of self-clarification and understanding by
which they become reflectively aware of deeper,
‘‘normative consonances in a common form of life’’
(Habermas, 1996, p. 160–161). Unlike pragmatic
claims, ethical arguments are assessed against a standard of authenticity and direct participatory attention
towards the critical evaluation of various forms of the
‘‘good’’ life. The selection of an authentic identity
would then provide a rationally motivated and evaluative basis for assessing certain pragmatic claims (e.g.,
organizational goals, aims, values, and pragmatic
argumentative criterion), determining situational definitions, and interacting and engaging with others.
Similar to strategic determinations regarding the
‘‘best’’ technical recommendations, it is important to
note that conceptions of the ‘‘good’’ are also grounded in particular, non-generalizable life histories, the
validity claims therein constituting hypothetical or
conditional imperatives that are issued from and
evaluated against the backdrop of certain unproblematic meaning structures. Within ethical discourse,
(D) is likewise indirectly applied as appealing to all
members sharing particular ‘‘traditions and strong
evaluations’’ (Habermas, 1996, p.108). Yet, when the
unproblematic meaning structures required for ethical
discourse are called into question, notably, on grounds
that particular ways of life are unjust or illegitimate, an
application of (D) makes additional demands.
Moral discourse
Distinct from both pragmatic and ethical discourse,
moral discourse is geared towards rationally and
collectively determining that which is right. As such,
moral questions constitute a second realm of normativity. Specifically, moral discourse involves the
redemption of maxims and norms relative to their
Stakeholder Management Capability
compatibility with the maxims and norms of others
(Habermas, 1993, p.6). Towing a decidedly Kantian
line, Habermas argues that ‘‘only a maxim that can be
generalized from the perspective of all affected counts
as a norm that can command general assent and to that
extent is worthy of recognition, or, in other words, is
morally binding’’ (Habermas, 1993, p.8). For Habermas, however, if we expect to find a rationally
motivated and generally binding agreement, then we
must throw into relief those questions ‘‘that can be
resolved by an appeal to a generalizable interest; in
other words, questions of justice’’ (Habermas, 1993,
p.151). Parting with Kantian moral theory, considered
to permit a monological application of universality,
Habermas’ approach rests on the intersubjective and
dialogical determination of that which is just. So,
while moral discourse requires an application of the
principle of universalization (U), it is applied as a rule
of argumentation, stating that a norm is valid only if
all affected can accept the consequences and the side
effects its general observance can be anticipated to
have for the satisfaction of everyone’s interests (and
these consequences are preferred to those of known
alternative possibilities). Correspondingly, (D), as seen
from a ‘‘moral point of view’’, requires that only those
norms can claim to be valid that meet (or could meet)
with the approval of all affected in their capacity as
participants in a practical discourse (Habermas, 1993,
pp.65–66). Within this context, a ‘‘moral point of
view’’ involves separating out questions of justice and
then dialogically testing the validity of social norms
vis-a`-vis (U). Distinct from pragmatic and ethical
discourse, the cognitive requirements of moral discourse requires an ‘‘idealizing’’ moment of universality that effectively distances participants from the
contexts of life in which their ‘‘particular identity’’ is
interwoven and as such proffers categorical action
norms (Habermas, 1993, p.12). Despite the possibility
of moral convergence, there remains the distinct
reality that in our complex, pluralistic, and fragmented
society conflict between that which is efficacious,
good, and are inevitable.
legitimacy-based discourse aims at ensuring that
pragmatic, ethical, and moral discourses are supported
and that the outputs of which are reflected in larger
political and legislative institutions. Although a
complete explication and defense of Habermas’
political theory is well beyond the scope and intent of
this paper, the central argument is that legitimacy
ultimately derives from the communicative power of
citizens (Habermas, 1996, 151). As Darryl Reed
explains, ‘‘It is the exercise of communicative action
in public discourses (involving moral, ethical, and
pragmatic concerns) carried out through a web of
political institutions which generates the basis for
legitimate law’’ (Reed, 1999b, p.26). Understanding
legitimacy in this way, Habermas reconfigures (D) in
terms of a principle of democracy: ‘‘only those statues
may claim legitimacy that can meet with the assent of
all citizens in a discursive process of legislation.’’
(Habermas, 1996, p.110) This move carries with it
two general implications. First, there must be a system
of rights to ensure that (D) can take the shape of a
principle of democracy through the medium of law.
Primarily, these rights include various guarantees
(e.g., freedom of opinion and equal entitlement for
influencing political will formation) for securing and
balancing private and public autonomy. (Habermas,
1996, pp.128–129) Second, there must be defined
principles that serve to ‘‘steer administrative processes
and transform communicative power into administrative power’’ (Habermas, 1996, pp.168–176). These
principles include ensuring popular sovereignty,
political pluralism, equal protection under the law,
and the separation of state and society (Habermas,
1996, pp. 122–123). Whereas the previous forms of
rational discourse elicit either hypothetical or universal imperatives, the outputs of legitimacy-based
discourse reflect a dual nature. The dual faced nature
of legal validity is expressed in the fact that legal
norms enable the pursuit of self-interest while at the
same time stem from a discursive process that carries
the mark of communicative legitimacy (Habermas,
1996, p.31).
The priority of the right
Discourse regarding legitimacy constitutes a third
realm of normativity quite distinct from ethical and
moral orientations. Playing a largely integrative role,
As we have seen, Habermas’ discursive account aims
to elaborate communicative means for achieving
social solidarity and order, resolving conflict, and
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regulating egoistic pursuits. Success in this endeavor
accordingly requires a rather complex array of
discourses situated at each of the previously
differentiated and operationalized levels. Despite the
importance of fostering all forms of discourses,
Habermas grants dialogical priority to moral issues.
Earlier noted, a ‘‘moral point of view’’ constitutes
the privileged and idealized perspective from which
questions of justice can be rationally and impartially
tested. On what grounds does Habermas support a
theory of the right over the good? Well stated in
other more detailed commentaries (Rehg, 1994),
Habermas accepts as a ‘‘contemporary social fact’’
that our post-traditional world is marked by
numerous, fragmented, and conflicting conceptions
of the good life. Although perhaps compelling for a
particular form of life, ethical and other hypothetical
imperatives lack the intersubjective force necessary
for communicatively bridging the normative gap
between competing forms of life. For Habermas,
only norms that find universal assent can serve as a
foundation for normatively and communicatively
structured social interactions (Rehg, 1994, pp.94–
100). The dialogical priority of the right over the
good is explained as follows. If we want to build
solidarity and avoid the ill consequences of instrumental reasoning and strategic action, then we must
give first priority to rationally and communicatively
resolving questions of justice.
While moral discourse provides a fundamental
basis for universal agreement, the cognitive force
behind dialogically motivated moral validity claims is
weak and suffers from ‘‘unprecedented’’ cognitive,
motivational, and organizational demands (Habermas, 1996, pp.114–118). Simply put, moral discourse requires complementary processes and
institutional forms for spreading ‘‘decontextualized’’
moral insight through complex, strategically driven,
and pluralistic forms of life. Habermas explains that
‘‘only those forms of life that meet universalist
moralities halfway…fulfill the conditions necessary to
reverse the abstractive achievements of decontextualization and demotivation’’ (Habermas, 1990,
p.109). As we have seen, the formulation of legitimate law and institutions represents a crucial component in achieving this end. We must remember,
however, that Habermas understands legitimacy as
ultimately deriving its force from the communicative
power of citizens. Further, that this communicative
power must first be developed vis-a`-vis robust public
discourses concerning that which is pragmatic, good,
and just. How exactly can we expect to meet
universalistic moralities half way? Following Rehg,
one should seek incorporate discourse–theoretical
intuitions in the decision-making procedures and
organizational processes of various types of institutions (Rehg, 1994, 230). Accordingly, Section 2
attempts to meet this demand by drawing out discourse–theoretical implications for SMC rational,
process, and transactional analysis.
Implications for stakeholder management
At the beginning of this paper we identified a persistent and unresolved problem with the transactional
and largely instrumental foundation of SMC. In short,
treating all stakeholder interests as balanceable commodities was found to be morally objectionable and
thus unable to capture the complex nature of normative conflict. We now know that stakeholder
claims come in different varieties and carry with them
distinct cognitive demands. In many cases, stakeholders and business organizations share similar values
(e.g., economic efficiency, return on investment, cost
minimization) and norms (e.g., principles of meritocracy) sufficient for resolving disputes through
traditional, economic means (e.g., transactional bargaining, negotiation, and exchange). At other times,
however, stakeholder claims are aimed at criticizing
the dominant perspective through which interests are
commonly understood and valuated. Such is the case
with the example of sweatshop labor presented in the
introduction. Stakeholder claims of this kind are
decidedly more ‘‘radical’’ in that they serve to challenge prevailing economic and exchange-based horizons of understanding. How are managers to capture
and resolve these more radical normative contestations
without immediate recourse to transactional decisionmaking models? Unfortunately, SMC fails to provide
managers with a coherent framework for answering
such questions. Attempts to address this concern by
simply asserting that managers ought to in some way
‘‘balance’’ competing conceptions of the good and the
right (Evan and Freeman, 1993) are at best left
wanting of further explanation and at worst guilty of
begging the question.
Stakeholder Management Capability
A discourse–theoretical approach provides some
critical insight as to how to understand and move
beyond these difficulties. Essentially, in the face of
more radical normative conflict managers may
choose to adopt one of two general orientations.
Option 1: managers can take a strategic orientation
and endeavor to influence stakeholder relationships
in ways that advance ‘‘private’’ organizational
interests. Although at some level necessary for
conducting business, we found that when left
unchecked strategic action tends to denigrate into
the use of morally questionable means of influence
(e.g., coercion, inducement, or even violence).
Additionally, relationships that are largely strategic in
nature fail to produce the communicative ‘‘glue’’
necessary for a more robust form of mutual understanding and solidarity. Given that both of the
problems associated with strategic responses undercut the normative acceptability and practical utility
of SMC, we require another approach. Therefore,
Option 2: prior to applying strategic standards of
evaluation, managers ought to seek a communicatively driven normative consensus between stakeholders regarding generalizable and shared interests.
In short, strategic interactions must first be based on
and in someway reflect an intersubjective and dialogical recognition of that which is good, right, and
legitimate, with special priority given to moral
Although there is ongoing philosophical debate
over many aspects of Habermas’ theory of communicative action and discourse, a brief review of the
business ethics literature suggests that theorists are
beginning to note distinct discourse–theoretical
advantages over more traditional management
approaches. On empirical grounds, a discourse–
theoretical approach is said to better describe the
nature of stakeholder relationships and draw out a
more accurate picture of pluralistic and seemingly
divergent stakeholder claims (Waxenberger and
Spence, 2003). On economic grounds, the communicative model is proving to be a compelling
model for determining and advancing organizational
aims and goals (Smith, 2004) and serving as a
mechanism for economic coordination (Kesting,
1998). Finally, normative advantages include the
ability for a discourse-theoretical approach to
systematically incorporate various forms of normative reasoning (e.g., virtue, deontological, and
consequentialist approaches), provide a more robust
account of social consent (Reed, 1999a), and gain a
deeper understanding of human rights and corporate
legitimacy (Van de Ven, 2005). Contributing to
these ends, the following sub-sections will advance
previous attempts to integrate Habermasian critical
theory with SMC (Jonker and Foster, 2002) and
rethink the traditional categories of rational, process,
and transactional analysis in light of central discourse–theoretical principles.
Rational level of analysis
The first step in enhancing stakeholder management
capability is to rationally ‘‘map’’ organization stakeholder groups and define stakes of each. Regardless
of the specific analytical techniques involved,
applying a discourse–theoretical approach to stakeholder mapping yields two primary conclusions.
First, the determination of who and what really
counts ought to be the result of operationalized
forms of discursive reasoning. Although this requires
a rather complex array of multi-leveled discourses,
some general suggestions are as follows. At an ethical
level, we could expect that managers rationally
appraise an organization’s mission, values, and culture and ultimately pose the question, ‘‘Who are we
and what would we like to become?’’ Since the
determination of organizational identity will necessary cut across and impact various conceptions of the
good life, ethical discourses should be structured to
include participation from all stakeholders that are
part of larger business communities (e.g., employees,
shareholders, subcontractors, and local communities). At a moral level, discursive participants will
likely extend beyond the traditionally defined business community (e.g., across industries and down
supply chains) and consist of all those groups impacted by operative principles of justice, which may
include competitors. Within today’s business environment, moral questions will likely focus on issues
of economic opportunity, fair trade and competition, fair labor practices and compensation, and fair
global development strategies, to name a few.
Regarding questions of legitimacy, organizations are
minimally required to support the formulation of
legitimate law, and where appropriate, actively
contribute to the communicative resolution of
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competing pragmatic, ethical, and moral claims.
Given the globalized nature of business, organizations should also seek to structure or otherwise
reform governmental and non-governmental international institutions based on the discursive principle
of democracy. As scholars have already noted, this
may be accomplished by modeling international
governance bodies and organizational standards in
accordance with communicative principles (Steffek,
Second, a rational stakeholder map must represent
discursive outputs in their categorically differentiated
forms. By treating all stakeholder claims in the same
way, we noted that SMC arbitrary elides logical
differences between the types of validity claims and
thus misses opportunities for rational discourse and
mutual understanding. Accordingly, stakeholder
maps should now clearly lay out the various types of
pragmatic, ethical, moral, and legitimacy-based
claims and likewise specify the values, moral norms,
and legal norms upon which such claims are founded. In short, managers must understand stakeholders as discursive claimants who leverage various
types of normative claims qua community member,
natural person, and citizen. This may make stakeholder mapping a more complex and difficult
activity. Stakeholders claims, however, can no
longer be simply represented as extant interests that
are fully captured and strategically understood
through the lens of transactional exchange. On the
contrary, to reduce all stakeholder’s interests to
balanceable commodities myopically reduces managerial vision and analysis to only one, largely strategic, aspect of rational analysis. Additionally,
stakeholder salience must reflect rational analysis
from a moral point of view. Given the dialogical
priority of moral questions, managers should highlight those claims that can be resolved in relation to a
universalizable interest. Accomplishing this task,
rational stakeholder maps should be structured to
throw into relief questions of justice, perhaps as
‘‘special characteristics,’’ or those features of stakeholder interaction that indicate a requirement of
particular and continued attention.
This analysis only points in the direction of some
general applications of a discourse–theoretical
approach to rational stakeholder mapping. Indeed,
much work is still needed to develop specific
strategies that support discursive arrangements and
analytic techniques for mapping the complex world
of stakeholder interaction. This, of course, is no
small task. That which should become clear, however, is the determination of stakeholder identity and
salience is a now regarded as a dynamic and
discursive process that is ultimately driven towards
mutual understanding and participatory solidarity.
Further, this process will be narrowly or broadly
construed depending on the nature of the validity
claim in question and the level of required discursive
participation. In any event, rational mapping must
be designed to effectively move organizations out
from cloistered positions of strategic analysis and into
a more engaged and normatively structured societal
dialogues. This requirement seems perfectly consistent with the spirit and intent of stakeholder management and the goals of rational mapping.
Process level of analysis
The second step in enhancing an organization’s
stakeholder management capability is to align business processes with the normative outputs derived.
In line with a discourse-theoretical analysis, organizational processes ought to be evaluated and
accordingly restructured in line with shared conceptions of that which is good, right, and legitimate.
On the practical front, managers can certainly expect
that there will be definitive gaps between discursively determined values, moral norms, and legal
norms and actual practice. A particular challenge for
bridging the gap between discourse and practice is
the fact that business organizations often reflect
deep-seated propensities for strategic action and resist evening out unequal distributions of power. In
light of this apparent difficulty, pressing questions
come to the fore. How can managers effectively
integrate communicative and strategic actions? What
sorts of organizational process are required to meet
normative discourses half way? How can a moral
point of view take root in environments hostile to
universalistic moralities? Overcoming these challenges requires reconfiguring organizational process
at two complementary levels.
First, managers ought to bring stakeholders into
strategic decision-making processes. Freeman recognizes early on that a primary means for effectively aligning interests is to include stakeholder
Stakeholder Management Capability
participation at various levels of strategic planning.
(Freeman, 1983; Freeman, 1984, p.69). In this
way, stakeholders will set the strategic tone for a
business organization from the top down. In discourse–theoretical terms this implies that bridging
the gap between rational analysis and practice
requires stakeholder representation in a variety of
executive and operationalized forms of pragmatic
discourse. To this point, there has been a considerable amount of research suggesting how this
can actually be accomplished. Jeffery Smith, for
example, cites several examples (e.g., at Saturn
Corporation) where organizations successfully link
the pursuit of strategic ends and communicatively
oriented actions (Smith, 2004). Other scholars
have developed communicative means for effective
environmental analysis, screening, and reporting
(Wiklund, 2005; Dayton, 2002), enterprise planning (Dillard and Yuthas, 2006), and strategic
development efforts in developing countries
(Reed, 2002). Bringing stakeholders into higherlevel strategic and pragmatic discourses, however,
is but one piece of the puzzle. Bridging the gap
between discourse and practice requires additional
process analysis.
Second, managers ought to analyze and design
management systems to ensure that an organization’s
day-to-day operations reflect and meet stakeholder
claims. Complementing efforts at the strategic planning level, stakeholders will also need to set the
operational tone of an organization from the bottom
up, so to speak. Unfortunately, as others have pointed
out, this aspect of process analysis, once prominent in
Freeman’s earlier writings, has since been unduly
neglected (Jonker and Foster 2002, p.190). Turning
our attention to this level of analysis from a discourse–
theoretical perspective yields valuable insight. In
particular, it means that management systems should
be in place to ensure that shared conceptions of the
good, right, and legitimate are communicatively reflected in an organization’s everyday operations.
Although there are many types of management
systems that could fit the bill, there are good reasons
for suggesting that modeling organizational ethics
programs along discourse–theoretical lines is a good
starting place. First, ethical programs have proven to
be effective and systematic means for positively
influencing organizational-ethical culture (Izraeli and
Schwartz, 1998). Second, the key components for an
effective ethics program are well defined in US federal law and flexible enough to apply to all types of
business organizations (Palmer and Zakhem, 2001).
Finally, there is a growing movement that suggests
that ethical programs should be designed and ultimately evaluated from a ‘‘moral point of view’’
(Reynolds and Bowie, 2004).
Although we cannot apply discourse–theoretical
principles to all components of a robust ethical
program, several implications seem obvious. Ethical
codes of conduct, mission statements, and procedures should appropriately reflect shared values,
moral norms, and legal norms. Such documentation
should be communicatively transmitted, understood
at all levels of the organization, and be open to
rational criticism and change. Ethical training programs should include means to develop communicative competence and moral reasoning. Perhaps
most importantly, ethical audits should be conducted
to both monitor system performance and serve as a
catalyst for introducing a moral point of view into
company operations and routine processes (Garci´aMarza´, 2005). In other words, ethical program
effectiveness and process capability should be audited
and evaluated, in large part, against the level of
communicatively and discursively achieved agreement and solidarity. Furthermore, the results of
ethical audits should be publicly reported in a
manner consistent with communicative principles
(Yuthas et al., 2002).
Again, this analysis only points in the general
direction of how to analyze and structure organizational processes from a discourse–theoretical perspective. We should, however, come to the
realization that overcoming gaps between discourse
and practice requires continued process analysis at all
levels of the organization.
Transactional level of analysis
The final step in enhancing and organization’s stakeholder management capability is for managers to
establish and execute ‘‘win–win’’ transactional
exchanges with stakeholders. It is through transactional processes that managers must, at some level,
engage stakeholders in an effort to surface discontent
and ‘‘balance’’ competing claims. In this arena it can
also be expected that both managers and stakeholders
Abe Zakhem
will, and perhaps must, exert some level of strategic
influence. While transactional negotiation and exchange should continue to play a central role, it can no
longer be regarded as the ‘‘bottom line’’ for stakeholder management. As Robert Phillips recognizes,
stakeholder relationships should have moral restrictions rather than being merely strategic in nature
(Phillips, 2003, p.38). From a discourse–theoretical
perspective, this means that transactional relationships
ought to be ultimately judged from a moral point of
view. In other words, transactional interactions must
first be based on and in someway reflect an intersubjective and dialogical recognition of that which is
In the complex world of business, however,
establishing shared normative convictions through
discourse is likely to be an ongoing, fragile, and often
open-ended task of argumentation, learning, and
continual improvement. Accordingly, managers will
potentially need to conduct business and engage
stakeholders as transactional partners without necessarily fully realizing moral consensus. In the
absence of communicatively established moral
norms, however, bargaining can still occur and at
least indirectly reflect a moral point of view. As
Habermas recognizes, bargaining processes are
appropriately tailed for situations in which social
power relations cannot be neutralized in the way
rational discourses presuppose. Whereas a rationally
motivated consensus rests on reasons that convince
all parties in the same way, compromised bargains
can be accepted by the different parties each for its
own different reasons. While transactional bargaining cannot replace moral discourse, it can be regulated from the standpoint of fairness. At a minimum,
this requires that all negotiating parties be provided
with ‘‘an equal opportunity to influence one another
during the actual bargaining, so that all the affected
interests can come into play and have equal changes
of prevailing.’’ (Habermas, 1996, pp. 165–167)
Whether directly or indirectly, the ‘‘bottom line’’
for stakeholder management must be determined
from a moral point of view.
Concluding remarks
In this paper we have articulated and analyzed a
persistent problem with SMC transactional analysis
and balancing. Recognizing the need to complement SMC analysis with a ‘‘moral point of view,’’
we parted company with traditional normative approaches and recast morality in terms of Habermas’
discourse–theoretical and ultimately communicative
perspective. This exegesis leads to several important
implications for SMC. First, that stakeholder mapping should be regarded as a dynamic and discursive
process and one that is ultimately driven towards
achieving mutual understanding. Second, that
overcoming gaps between discourse and practice
requires continued process analysis at both strategic
and operational levels. Lastly, that the ‘‘bottom line’’
for transactional involvement with stakeholders must
be determined from a moral point of view. While
this paper only provides a general framework for
adapting discourse–theoretical principles to SMC
analysis, the conclusions drawn will hopefully inform
more detailed research.
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Department of Philosophy,
Seton Hall University,
400 South Orange Avenue, Fahy Hall, South Orange,
NJ, 07042, U.S.A
E-mail: [email protected]


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