Who and what really counts? Stakeholder prioritization and accounting for social value

Matthew Hall, Yuval Millo and E Barman

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Research in stakeholder management has theorized extensively the prioritization of stakeholders as a key dynamic of firms’ value creation, but has paid less attention to the organizational practices involved in the process of deciding ‘who and what really counts.’ We examine changes underpinning managers’ prioritization of stakeholders and focus on how managers’ attention to salient stakeholders is represented and communicated in a firm’s accounting and reporting system. We study the emergence and development of Social Return on Investment (SROI): an accounting methodology intended to permit managers both to incorporate stakeholders’ voices and to communicate the social value created by the firm for those stakeholders. We find that the ability of SROI to account for specific stakeholders, thus categorizing them as salient for the firm, is shaped by managers’ epistemic beliefs and by the organization’s material conditions. Our findings contribute to stakeholder theory by showing that the prioritization of stakeholders is not solely a managerial decision, but instead is dependent on the construction of an appropriate accounting and reporting system, as shaped by managers’ epistemic beliefs and by the organization’s material conditions.

Keywords: social accounting; social return on investment; stakeholder engagement; stakeholder prioritization; stakeholder salience; value creation (search for similar items in EconPapers)
JEL-codes: J1 M40 (search for similar items in EconPapers)
Date: 2015-08-20
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Published in Journal of Management Studies, 20, August, 2015, 52(7), pp. 907-934. ISSN: 0022-2380

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