Limits to Stakeholder Influence
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Limits to Stakeholder Influence

Why the Business Case Won't Save the World

Michael L. Barnett

In business, does it pay to be good? Drawing from two decades of published conceptual and empirical scholarship, this book outlines the mechanisms of the business case for corporate social responsibility and demonstrates the conditions that cause good corporate acts to succeed, or fail, in turning a profit. Central to the explanation is the role of stakeholders, who are portrayed as agents who can turn corporate “good into gold” but lack the capacity to do so consistently. This book takes a critical perspective, noting significant limits on the ability of stakeholders to reward good corporate behavior and rein in bad corporate acts. It concludes with several ways that scholars can improve this important and popular research topic.
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Chapter 13: Building a better business case: where do we go from here?

Michael L. Barnett


When discussing the business case for corporate social responsibility in the classroom, I often start by showing contrasting clips from the movie Other People’s Money , which is about a hostile takeover of a struggling firm called New England Wire and Cable. I first show a speech by the firm’s chairman, ‘Jorgy’ Jorgeson. Played by Gregory Peck, Jorgy is quite adept at making an impassioned plea to stockholders, imploring them to stick with the company rather than sell to ‘Larry the Liquidator’ Garfield who, true to his nickname, seeks to liquidate the firm. Then it’s Larry’s turn, wherein Danny DeVito channels his inner (not so much outer) Gordon Gecko in arguing that shareholders should embrace their good ol’ greed: ‘And lest we forget, that’s the only reason any of you became stockholders in the first place. You want to make money! You don’t care if they manufacture wire and cable, fried chicken, or grow tangerines! You want to make money!’

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