Stakeholder Practices of Triple Bottom Line Firms
This article is one in a series of reports about the Spring 2010 Journal of Public Policy and Marketing special edition on Stakeholder Marketing. See an introduction to and a summary of our coverage of this edition here.
By Kathleen Hosfeld
It’s virtually impossible to be a Triple Bottom Line business without practicing stakeholder marketing. Adding social and environmental outcomes to the traditional financial bottom line almost invariably involves engagement with stakeholders other than customers, employees and owners. As a result, Triple Bottom Line firms are a source of insight concerning what stakeholder marketing looks like.
Hosfeld & Associates’ academic partner, Jennifer Mish, Ph.D., a professor of marketing at Notre Dame, contributed the article “Principle Based Stakeholder Marketing: Insights from Triple Bottom Line Firms,” with co-author Debra Scammon to the special edition of the Journal of Public Policy and Marketing. The article is based on her doctoral research of firms who had operated with at least two bottom lines for at least 15 years and three bottom lines for at least 5 years (some had done so for more than 30 years).
Such firms inherently recognize the interconnectedness of stakeholders, what we call “taking a systems perspective.” Moreover they are committed to acting in service of the well being of the system as a whole. This translates to a commitment to transform industries and institutional norms, reinventing how business in their industry gets done, and tending to the needs of the weakest or most vulnerable members of the system.
The firms Jenny interviewed use value propositions in a unique way. In traditional settings, a value proposition is used to clarify the benefit created for a target customer. The value propositions adopted by these Triple Bottom Line firms however define how the company and its customers together will create benefit for other stakeholders in the system (for example, offering a recycling program that helps them co-create benefit for the community and the environment).
Jenny’s article describes three elements of a Principle-Based Stakeholder Marketing Model: 1) a set of principles which support 2) the organizational culture which then in turn supports 3) specific stakeholder marketing practices. The practices include 1) generating stakeholder-related intelligence, 2) disseminating the intelligence, and 3) responding to the intelligence.
Her article includes implications for public firms, some of which apply to many organizations – public, private or non-profit — that may be seeking to adopt a stakeholder perspective. A stakeholder orientation will increase the complexity of decision-making, may be difficult to measure, may unsettle single-bottom-line expectations, may expose the firm to reputation risks, and may challenge perceived legal constraints.
This article brought me back to another in the Special Edition, an essay by Gregory T. Gundlach and William L. Wilkie on why the term “stakeholder” was omitted from the latest iteration of the American Marketing Association’s definition of marketing in 2007. The essay makes the point that stakeholder marketing is less a set of specific tactical practices – like green marketing – and more a marketing management perspective or a marketing philosophy. Jenny’s article may leave the practitioner hungry for answers to the question “How do I do stakeholder marketing?” Yet, it rightfully sets the context for how marketing and other executives should think about marketing from a stakeholder perspective.