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Stakeholders, Identity and Reputation 63

In sum, the notion of having a true and legitimate stake in an organization is
rather ‘inclusive’ and ranges from economic to moral interests, and from formal,
binding relationships as the basis of stake-holding to more diffuse and loose ties with
the organization.This inclusiveness implies that organizations attend to all of their
stakeholders, and communicate with them; a point that once again emphasizes the
need for organizations to project a favourable image to all stakeholder groups in a
coordinated manner through all of their public relations and marketing activities.
One further way in which this inclusive nature of the stakeholder concept is shown
is in corporate social responsibility (CSR) initiatives that have been adopted by many
organizations in recent years. CSR can be defined as the adoption by an organiza-
tion of ‘the responsibilities for actions which do not have purely financial implica-
tions and which are demanded of an organization under some (implicit or explicit)
identifiable contract’. 15 CSR includes philanthropy, community involvement, and
ethical and environmentally friendly business practices. CSR falls neatly within the
stakeholder philosophy of strategic management, and underlines that for the majority
of organizations today the input–output model of strategic management has indeed
become a relic of the past.

Stakeholder management and corporate social responsibility
The impetus for CSR came with a recognition of the need for business to deliver
wider societal value beyond shareholder and market value alone, and has in recent
years become more pertinent through expectations voiced by the international commu-
nity,NGOs, pressure groups, as well as many market parties. At the European Summit
in Lisbon (March 2000), the European Council made a special appeal to companies’
sense of responsibility, and linked CSR closely to the Lisbon 2010 strategic goal
for a knowledge-based and highly competitive, as well as socially inclusive, Europe.
Internationally, the UN World Summit for Sustainable Development in
Johannesburg in 2002 voiced the need for businesses to contribute to the building
of equitable and sustainable societies, wherever they work. Recognizing the urgency
of this responsibility, many CSR schemes and standards have in recent years been
developed and suggested by major international agencies.These schemes and standards
should not merely be seen as an effort to support or judge companies’ licence to
operate in countries all over the world; rather they mark the priority that is now
given to finding new ways to take up larger development and societal goals and
towards establishing a new role for business in the new millennium.
On top of the momentum that has gathered around CSR in the international
community and public policy arenas, organizations often also consider CSR in an
effort to boost their own reputations.With the media constantly reporting on their
affairs, and because of the greater product homogeneity and competition in many
markets, many organizations realized that doing business in a responsible and just
manner offers strategic and reputational advantages.As with stakeholder engagement,
CSR initiatives may in the first instance be started for either moral or instrumental
reputational reasons, which is nonetheless very hard to clearly establish or infer given
the ‘significant difficulties in distinguishing whether business behavior is truly moral
conduct or instrumental adoption of an appearance of moral conduct as reputational