Scandinavian Cooperative Advantage: The Theory and Practice of Stakeholder Engagement in Scandinavia

Abstract

In this article, we first provide evidence that Scandinavian contributions to stakeholder theory over the past 50 years play a much larger role in its development than is presently acknowledged. These contributions include the first publication and description of the term “stakeholder”, the first stakeholder map, and the development of three fundamental tenets of stakeholder theory: jointness of interests, cooperative strategic posture, and rejection of a narrowly economic view of the firm. We then explore the current practices of Scandinavian companies through which we identify the evidence of relationships to these historical contributions. Thus, we propose that Scandinavia offers a particularly promising context from which to draw inspiration regarding effective company-stakeholder cooperation and where ample of examples of what is more recently referred to as “creating shared value” can be found. We conclude by endorsing the expression “Scandinavian cooperative advantage” in an effort to draw attention to the Scandinavian context and encourage the field of strategic management to shift its focus from achieving a competitive advantage toward achieving a cooperative advantage.

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Notes

  1. 1.

    The adjective use of the word cooperative also has application with respect to cooperative enterprises and organizations, i.e. “co-ops”, given that the formation of a co-op is rooted in a desire for cooperation to occur between members and the expected benefits to result.

  2. 2.

    Although, the date of September 1967 given at the close of the 1968 foreword proves that Rhenman was using the English expression “stakeholder” by that date, how the stakeholder expression first entered Rhenman’s vernacular and how far in advance of September 1967 it did so remain open questions for which we invite further investigation. The notes preceding this foreword credit Mrs. Nancy Adler with the translation from Swedish. It is reasonable to conclude that Rhenman translated “interessent” to “stakeholder” rather than relying on a translator given the central importance of the expression “stakeholder” in the English version, Rhenman’s clear competencies in English, and additional evidence presented in the foreword indicating Rhenman’s lead role in editing the Swedish version to English.

  3. 3.

    For additional commentary on Rhenman, see Carlsson (2007). We also extend our gratitude to Rolf H. Carlsson for his contributions to this article.

  4. 4.

    Professor James E. Howell is the Theodore J. Kreps Professor of Economics, Emeritus at the Stanford Graduate School of Business (Stanford Faculty Profile 2012).

  5. 5.

    Personal correspondence with Rolf H. Carlsson during April 2012.

  6. 6.

    Personal correspondence with Rolf H. Carlsson during April 2012.

  7. 7.

    According to Carlsson, Rhenman was at Carnegie Tech during the 1959–1960 academic year, during which time he studied under the direction of Herbert Simon, to whom Rhenman refers explicitly in the foreword to Industrial Democracy: “I should like to mention three authors who have particularly influenced me, namely Chester Barnard, Herbert Simon, and Philip Selznick”. Carlsson also mentions that Rhenman spent 3 months at the University of Cambridge in the U.K. in 1962, a claim supported in the preface to Conflict and Cooperation in Business Organizations, coauthored by Rhenman and two Scandinavian colleagues, Lennart Strömberg and Gunnar Westerlund and published in Swedish in 1963 and in English in 1970 (Rhenman et al. 1970). Most important, in answer to our direct question about this timeline, Carlsson stipulated that “Eric did not spend time earlier at Stanford”. We can also place Rhenman in Oslo, Norway, during July 1963 based on his presentation at a conference (Rhenman 1963).

  8. 8.

    The difficulties of tracking down the Stanford memorandum are discussed in Freeman (1984, pp. 31–33, 49n.1, 50n.15) and further elaborated in Freeman et al. (2010, pp. 31n.4, 42n.18, 45–46n.19).

  9. 9.

    Translated from the Finnish. The original text reads “Näkemyksemme kehittämisessä olemme saaneet vaikutteita erityisesti ruotsalaisen organisaatiotutkijan Eric Rhenmanin tuotannosta”.

  10. 10.

    One could readily that this sort of adversarial view of the firm resembles Porter's “Five Competitive Forces” model in which customers and suppliers are pitted in direct competition with the company.

  11. 11.

    Also known as the Swedish Institute for Administrative Research.

  12. 12.

    Personal correspondence with Rolf H. Carlsson during April 2012.

  13. 13.

    Näsi (1995a, b) does not offer commentary regarding Denmark. Discussions of industrial democracy were widespread in Denmark during this era (Westenholz 2006), but it is not well understood the degree to which Rhenman’s offerings were utilized. This remains an open area of interest to the authors.

  14. 14.

    “Survival of the fittest” was first coined by the economist Hubert Spencer (Werhane 2000; Stucke 2008, p. 973; Nowak and Highfield 2011, p. 14).

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Acknowledgments

We thank the students of the University of Minnesota’s IBUS 6315: “CSR: A Scandinavian Approach” and IBUS 6316: “Sustainability and Cooperative Advantage in Scandinavia”, the students of the Copenhagen Business School’s BLC 3CSR: “Sustainability and CSR in Scandinavia”, Rolf H. Carlsson, Marianne Barner, Susanne Stormer, Mette Morsing, and the three anonymous reviewers for their most helpful input. Support was provided in part by the University of Minnesota Center for International Business Education and Research (CIBER).

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Strand, R., Freeman, R.E. Scandinavian Cooperative Advantage: The Theory and Practice of Stakeholder Engagement in Scandinavia. J Bus Ethics 127, 65–85 (2015). https://doi.org/10.1007/s10551-013-1792-1

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Keywords

  • Cooperative advantage
  • Scandinavia
  • Stakeholder theory
  • Strategic management
  • Sustainability
  • Creating shared value