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Exploring How Information and Communications Technology (ICT) Firms Create 'Value' for Organizational Stakeholders

By Muhammad Umair Shah


The understanding of how firms create value for their stakeholders is important for advancing the empirical body of knowledge on stakeholder theory. This is especially relevant for the exploration of technology companies operating at different organizational life cycle (OLC) stages. Our study investigates if the use of business-stakeholder engagement models differs among firms at various OLC stages. We have identified three distinct categories of business-stakeholder engagement models from the literature, including: ‘corporate social responsibility’ (CSR), ‘creating shared value’ (CSV) and ‘creating value for all stakeholders’ (VAS) (Freeman et al., 2010; Strand & Freeman, 2013). Drawing from the stakeholder theory and organizational life cycle (OLC) frameworks, we hypothesize that ‘start-up’ firms are more receptive toward VAS model; ‘growth’ firms toward CSR; and ‘mature’ firms toward CSV. We apply a ‘pragmatist’ worldview (Creswell, 2009) to collect empirical evidence on Information and Communications Technology (ICT) firms. Our analyses include two extensive perception based exploratory studies, described as ‘Phase-1’ and ‘Phase-2’. In the first phase of our exploratory study we use repertory grid technique (Kelly, 1955) to systematically elicit personal constructs from the ICT-sector business experts. We used a partial repertory grid method to interview 18 ICT-sector business experts from Central Canada. Selected sample groups comprised of three scholars and three practitioners from each of the start-up, growth and mature OLC stages. RepGrid and RepSocio features of the Rep 5 enterprise software were used to conduct idiographic and nomothetic data analyses to establish how firms at OLC stages perceive ‘value-creation’ for their stakeholders. Evidence from this exploratory study suggested that start-up stage firms are perceived to consider factors beyond creating economic value for both primary and secondary stakeholders. Whereas, growth and mature stage firms are perceived to consider socioeconomic (consisting of financial as well as non-financial) scenarios for ‘value-creation’. In the second phase of research, we use survey study design to test our proposed hypotheses. A total of 132 ICT-sector senior level practitioners, located in the United States of America (USA) participated in our study. A one-way repeated measures ANOVA, and factor analyses were used to systematically conduct data analyses for common method variance, and hypotheses testing. The results from the study showed that start-up, growth, and mature OLC stage firms are perceived to be at least partially receptive toward VAS, CSR, and CSV models, respectively. Our study contributes to the literature on stakeholder theory, ICT-sector organizational life cycle framework, and methods for measuring organizational decision makers’ perceptions about stakeholder engagement. The empirical evidence from our research strengthens Donaldson and Preston (1995), Jones and Wicks (1999), and Jawahar and McLaughlin’s (2001) ideas about descriptive stakeholder theory for effectively understanding business organizations. We believe that these findings better equip us for further exploring claims of stakeholder theory – providing divergent narratives for understanding organizations in stakeholder terms (Jones, 1995; Freeman, 1999). Some practical implications follow as well. For example, assuming our findings replicate, a society that seeks to encourage technology companies to broaden their range of stakeholders for innovation (e.g., to include communities, environment) might direct instrumental change toward ‘start-up’ firms as appreciative of VAS — even if these new firms require some time to develop perspectives of 'jointness of interest' as they strive to become ‘growth’ and ‘mature’ firms

Topics: Stakeholder Theory, Organizational Life Cycle, Value Creation, Creating Shared Value, Corporate Social Responsibility, Repertory Grid, Personal Construct Psychology, Creating Value For All Stakeholders, CSV, CSR, RepGrid, RepSocio, OLC, Startup Firms, Growth Firms, Mature Firms, Value
Publisher: 'University of Waterloo'
Year: 2015
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