Stakeholder Value Creation at the Intersection of Business and Sustainability

Given the constantly increasing relevance of complex sustainability challenges, companies are being confronted with the question of how they can contribute to sustainability and create value that is in line with the economic, social and ecological sustainability aims. Sustainability refers to integrating and fulfilling economic, social and environmental sustainability dimensions without prioritising one over. However, management theory and practice have both been criticised for limiting companies’ sustainability contributions to an instrumental view of sustainability in which economic objectives often overrule other sustainability ones. Indeed, the organisation- and economic-centric value creation models prevailing in the value creation literature and management theories are ill suited to address complex sustainability issues that extend and require cooperation beyond organisational boundaries. Therefore, novel approaches are needed to understand value creation in the context of sustainability. Stakeholder theory is one such approach that offers a multifaceted understanding of the role of business in society and value creation with and for stakeholders. While stakeholder theory was not originally designed to directly address sustainability, this theory has increasingly been used to describe business and value creation in relation to sustainability. Along the recent conceptual development, stakeholder theorists have called for more empirical studies on how value is created within stakeholder relationships including the examination of potential synergies, conflicts and competing demands in the context of sustainability.

The overall aim of this dissertation is to increase understanding of how stakeholder theory can be used to address complex and systemic sustainability challenges. Specifically, it examines how businesses can create value with and for stakeholders in the context of sustainability. Conceptually, the dissertation builds on stakeholder theory, stakeholder value creation and corporate sustainability literatures. The dissertation consists of four independent studies in addition to the integrative chapter. The studies involve a thorough literature review, two empirical single case studies and the application of a discursive approach to CEO interview data. A pragmatic research philosophy and a qualitative research approach have been employed in order to offer theoretically and practically relevant research results for organisational actors to address sustainability as an important issue within their operating environment.

Study I is a thorough literature review which provides this dissertation with a theoretical foundation. It examines distinctive narratives in stakeholder value creation and how they consider sustainability. The results of the review direct attention to multiple narratives that exist within stakeholder value creation research. The narratives vary in how they approach stakeholders, value and sustainability. The recommendations are made for future stakeholder value creation research in the context of sustainability.

Study II is a single case study on circular economy business, and it examines at the organisational and inter-organisational levels how and what kind of value is created within stakeholder relationships in a circular economy business. The results of the study present a stakeholder relationship model for value creation that serves in explaining and analysing value creation in the context of sustainability. The model includes the key constructs of joint value creation activities and multidimensional value, which are needed to advance systemic sustainability in society.

Study III is a single case study on green infrastructure design project in a multistakeholder setting. At the organisational and inter-organisational levels, the study examines how collaboration and decision making among multiple stakeholders and value perspectives happened. The results highlight activities and capabilities that support negotiations and decision making on what is of value and enable sustainable value creation.

Study IV takes CEOs under scrutiny and examines how corporate sustainability and associated tensions are constructed in the language use of CEOs, representing the individual level of analysis in the dissertation. The results consist of instrumental, normative and transformative discourses with corresponding reasonings, dominant topics, dominant tensions and tension response strategies. In particular, the simultaneous existence of multiple discourses in the CEO language use highlights the complexity and multiple meanings related to sustainability. Furthermore, the tensions between business and sustainability are constructed differently in each discourse in terms of different stakeholder demands and systemic views. The study contributes by introducing the novel transformative discourse.

To conclude, this dissertation argues that to create value in the context of sustainability, businesses must 1) adopt a systemic and relational view of value creation with a focus on stakeholder relationships; 2) build on joint value creation activities at multiple levels of society and beyond organisational boundaries; 3) perceive value as multidimensional; 4) address the complexity, tensions and competing demands related to sustainability; and 5) profoundly understand the relationships with the surrounding societal and natural environments. With these insights, this dissertation contributes to stakeholder theory by showing its relevance in addressing complex and systemic sustainability issues. Specifically, it contributes to the stakeholder value creation literature by providing theoretically and empirically grounded findings that consolidate and extend prior understanding of stakeholder value creation in the context of sustainability. Additionally, this dissertation contributes to the corporate sustainability literature by depicting stakeholders and stakeholder relationships as the nexus between business and sustainability as well as by showing how multidimensional value creation within stakeholder relationships allows for addressing complexity in sustainability and promoting systemic sustainability.