21. Convergence and Corporate Social Responsibility: The Need for Using a Networking Concept for Stakeholder Management

“In a world where innovation is global, multidisciplinary, and open, you need to bring different minds and different perspectives together to discover new solutions to long-standing problems. Therein lies the essence of collaborative innovation. IBM’s Jams and other Web 2.0 collaborative mediums are opening up tremendous possibilities for collaborative innovation—ways of working across industries, disciplines, and national borders.” (IBM 2012) [www]

For the purpose of this chapter I am focusing on this second era, because it challenged and is still challenging media organizations and their business models (Küng et al. 2008a, p. 125).

Besides this rather practical classification of convergence, Küng et al. 2008 offer a very good overview of economic theories exploring and explaining how convergence works (e.g., neoclassical theory, business economics, non-neoclassical approaches, etc., p. 17).

Castells identifies the most powerful and relevant interrelationships in an oligopolistic market between Time Warner, Disney, Bertelsmann, NBC, Universal, Viacom CBS and News Corporation, adding that Apple, Microsoft, Yahoo!, and Google (Castells 2009, p. 74) also play major roles in the game of pursuing partnerships, joint ventures, and alliances.

Lowering transaction costs can’t just be pinned down to one single mechanism, since sometimes transactions are focused around highly specific products, so there needs to be a greater amount and specificity of information to lower uncertainty (hierarchy). When centering transactions around products of low degree of specificity, the market and prices are the right choices (Williamson 1996).The three mechanisms of governance (market, hierarchy, and networks) are never found as a unique mechanisms, but more likely as mixed with each other. (see also Jürgens 2006).

Even though Bar and Simard (2006) point out that usage of new media could also result in more hierarchies or more markets and not necessarily in more networks, it becomes obvious when looking at the media industry today, that the network is rather dominant.

Freeman questioned the sole value creation for shareholders and outlined that stakeholder theory develops out of four ideas, or rather deficits that need to be considered when trying to define what a firm or company is. First, every business decision always has an ethical implication (separation fallacy) which means that no business decision can be made without considering ethical questions (integration thesis). Further there are central questions for a company that need to be answered, in regard to who is affected or harmed (open question argument) by its products and services. Finally, there is the responsibility principle, saying that “most people, most of the time, want to, and do, accept responsibility for the effects of their actions to other” (Freeman et al. 2010, p. 6).

On the basis of this perception Mitchell et al. (1997) build a classification of latent (dominant, discretionary, demanding), expectant (dominant, dependent, dangerous), definitive, and non-stakeholders (pp. 874–879).

This can be seen in congruence with Freeman’s separation fallacy, that any economic behavior or decision can’t be evaluated without its ethical implications.

Granovetter (1985) is especially criticizing the new intuitional economy, founded on the irrational idea of an atomized and rational individual in an utilitarian sense (p. 484). This can also be seen in congruence with Freeman, stating that stakeholder management is mostly about human beings rather than about just self-interested and opportunistic actors.

Rowley 1997

Rowley (1997) points out that “The purpose of network analysis is to examine relational systems in which actors dwell and to determine how the nature of relationship structures impacts behaviors.” (p. 893). This is why it is helpful to develop a network theory in stakeholder management.

Castells differentiates four distinct forms of power: networking power, that is characterized by the mechanism of inclusion. Such power is exercised via exclusion from the network; network power, which operates on agreed rules and norms in a network. Power is exercised by the power of the standards of the network over its components (2009, p. 43). The networked power relates to the fact that each network has its own rules and standards, but that this power is not absolute, meaning it depends on the connection to other networks influencing and such exercising power over other networks (e.g., the network society is highly dependable on the dynamics in the network of the global (financial) markets (ibid., p. 44). Finally, network making-power, which will be elaborated in more detail.

“A central characteristic of the network society is that both the dynamics of domination and the resistance to domination rely on network formation and network strategies of offense and defense.” (Castells 2009, p. 49).