Conflict or Consensus: Stakeholder Relations in the Energy Industry
Authors: Gondek Prabhjote Jyoti 
Published: December 2007

It is a commonly held belief that the needs of stakeholders are typically at odds with the needs of business, particularly in the energy industry. For this reason, many organizations have implemented the concept of corporate social responsibility (CSR) in an effort to strike the appropriate balance between profitability and social responsibility.

In 2002, a case study was conducted to determine the variance in perspective between corporate managers and stakeholders with regard to CSR. Specifically, both parties were asked about:their definitions of CSR,balancing profitability and social responsibility andthe role of the stakeholder.

The results of the research were somewhat unexpected and suggest that a more consensus-based approach to managing stakeholder relations will yield a greater positive result for energy companies.

Introduction

Who cares about corporate social responsibility? Historically, business has not focused on this concept, content instead to meet its fiduciary responsibility to its shareholders. According to Milton Friedman, the only social responsibility of business is to generate profit.1 The average citizen has not typically paid any attention to the social responsibility of corporations, content instead to earn a decent living and lead a happy life. So, at what point did we suddenly become aware of the notion that companies must do more than operate in a profitable manner, and that we as a society have the ability to influence corporate behaviour?

It has only been in the past few decades that environmental, community and social concerns have begun to surface as issues of significance in the corporate world. In the last thirty years, we have also seen unparalleled advances in technology, communication and availability of information. Means of production are introduced and made obsolete in record time. Individuals can establish and eradicate contact with others almost instantaneously. Access to knowledge is no more than a mouse click away for many individuals in North American society. How did all of this advance the concept of corporate social responsibility?

Corporate social responsibility (CSR) began to emerge as an issue when the question was posed to Milton Friedman: what is the social responsibility of business? In many ways, Friedman's response was merely a defensive reaction to an issue that had no precedent in the business world. Until that point, organizational behaviour was embedded and unchallenged. Friedman took a stance and defended the behaviour of organizations based on the fundamental assumption that business operated to generate profit for owners. Since then, the debate has raged about the social responsibility of business. Whether the focus of the argument has been on the role of ethics in business, or the theoretical meanings of responsibility, the historical debate over corporate social responsibility continues to be waged.

At the same time the question of corporate social responsibility was posed, the face of business was beginning to change. With the social revolution of the late 1960s, the business world began to see more immigrants, women and individuals with liberal views enter the workforce. This liberalization and diversification of the workforce brought the status quo into question. As the makeup of work changed, it became evident that different people had different views of the world. Heterogeneity and inclusivity began to change the business world.

With diversity in the workplace came the advancement of new perspectives and ideals. Although traditional business views were being challenged, the challenge was not coming from a fringe group with no legitimate association to business. This challenge was coming from those who composed the new workforce, individuals in positions to exercise legitimate influence over business and make significant changes. Inclusivity was not a demand from such groups; it simply became a business reality.