Article snapshot: The Cooperation Complexity Rainbow: Challenges of Stakeholder Involvement in Managing Multinational Firms

Another article snapshot... this time I came into the research process at a later stage and as the fourth author cannot take credit for much :) The credit goes to:

• Salman Kimiagari, PhD candidate in Enterprise Engineering 
• Samira Keivanpour, PhD Candidate in Industrial Engineering 
• Muhammad Mohiuddin, PhD (ABD) in International Management

All students at Université Laval in Quebec City and all members of CIRRELT (Interuniversity Research Centre on Enterprise Networks, Logistics and Transportation) - I am a VERY proud alumni of both! (Please note the inter-disciplinary nature of the authors, which shows the absolute strength of the training we receive within CIRRELT - working across disciplines is the norm, not the exception!)

If you would like to read the full article (it is open source yeah!) you can download a copy here: Article

And if you would like to cite the article here is the citation:

Kimiagari. S., Keivanpour, S., Mohiuddin, M. & Van Horne, C. (2013) “The Cooperation Complexity Rainbow: Challenges of Stakeholder Involvement in Managing Multinational Firms”, International Journal of Business and Management. 8(22), 50-64.

The objective of the paper is to highlight and present a theoretical framework on challenges that multinational corporations (MNC) face when integrating their stakeholders in management processes - because in a multinational corporation, value-based management and long term value creation require the consideration of all stakeholders in the strategic decision-making process. In this way, sivolving stakeholders is not only an activity aligned with social responsibility but also necessary for ensuring effective corporate governance. Establishing an appropriate strategy for stakeholder engagement raises several challenges for multinational firms.

Why involve stakeholders? Well, contrary to the belief of many management scholars (I won't cite here, read the article!), the theory that firms only exist to to maximize shareholder wealth is not the only game in town. There is a contrast view that a firm needs to work towards maximizing stakeholder wealth... but that is a much more difficult endeavor, especially when running a multinational firm with stakeholders from different, countries, rules and regulations, cultures and religious beliefs!

Figure 1 illustrates the onion layer of "players"

Figure 1: Onion layers of actors in MNCs

Of course this brings up many challenges - and begs for a conceptual framework to bring order and a "method" for the madness of decision making in such a complex environment. The "Rainbow" is illustrated in Figure 2 (there are many other figures and an excellent literature review in the article).

Figure 2: Framework integrating stakeholders into the MNC management process

The conclusion of the paper:

Dealing with different stakeholders in different socio-economic, cultural and political backgrounds raises many challenges for multinational firms. These challenges can be addressed while respecting local and global ethical concerns with adequate communication channels. Without doubt, involvement of stakeholders requires appropriate dialogue and negotiation with interest groups. Different cultural and political frameworks complicate these negotiation, bargaining, and dialogues.

Based on the plan-do-check-action (PDCA) cycle, some challenges may occur in the phase including planning, execution and mentoring. Other challenges, such as the clear definition of goal and objectives and value definition from a stakeholder`s perspectives, exist in the planning phase. In the execution phase, the identification of key stakeholders and their priorities, and in the monitoring phase, identifying performance metrics are a source of conflict. Future research could include empirically testing the proposed conceptual framework.

So there it is - cross-national, multi-university, inter-disciplinary work in action. Again, I am proud to say my research "training" at the Université Laval and with CIRRELT (and FORAC) made me think this was "the normal" way of doing "academic business".... it isn't, but frankly I think it is the best way of doing research! (That and doing research with your friends!)