Literature Review

There are numerous ways to take into consideration what and who are the main stakeholders in both the projects of an organization and the organization itself. The shareholder theory has brought forth by Economist Milton Friedman states that the beholding of a company os only to its shareholders which means that the company has to make a profit for the shareholders (Freeman 2010).

Stakeholder theory as described by Dr F. Edward Freeman on the other hand provides that shareholders are just but one of the numerous stakeholders in a company. This theory states that the stakeholder ecosystem is composed of anyone who has invested and involved in or in a way or another affected by the company, environmentalists, employees, government agencies, the plants of the company, and vendors among others (Freeman 2010, p. 106). In his theory, Freeman provides a suggestion that the real success of a company depends on the satisfaction of all the stakeholders as opposed to only those who may profit from the stock provided.

Dr Freeman proposes that the stakeholders of a company are those groups of people who without their support the company is deemed to collapsing. Such a perception reflects the corporate environment as one that is composed of related groups all of which need to be taken into consideration and satisfied in order to ensure that the company is kept healthy and successful in the long run (Freeman 2010, p. 118).

Numerous researchers acknowledging that both normative and managerial motivations has an impact on the decision making have made suggestions on the approaches to the stakeholder theory that may aid in the analyses of the interaction of the firm-stakeholder. One such is Trevino and Weaver (1999) who suggested that the stakeholder theory would best be characterized as a Stakeholder Research Tradition as opposed to just a single theory.

This research suggests a metaphoric approach to stakeholder theory. The motivations that have been identified through the different stakeholder theories to be underlying the decision by the management on reporting to the stakeholders are applied in the analysis of interaction between management and he stakeholder. The empirical aspects of the task seeks to identify if these motivations as identified by the theory take part in the decision making process by the management (Stoll-Kleemann 2010).

Arguments are put forth that the an analysis should be conducted on the firm-stakeholder interaction in a framework of the motivations that are attained from the different stakeholder theories and observed to have an effect on the decision making in practice (Freeman 2010, p. 201). This approach is assumed to be in a position to better explore the nature of the interaction in the decision by the management to make reports on environmental information through the identification of the broader range of the impacts on that decision attained from the different stakeholder theories.

Conceptual Model

In so doing, this study provides an approach to the operatizing of the stakeholder theory through taking into consideration the motivations that have been identified by each of the different theories on the firm-stakeholder interaction which are assumed to be underlying the decision to make reports to the stakeholders (Decker 2012).

“Why have some firms achieved greater carbon reductions that others”

                       

The common link between these two scenarios is the stakeholder. It is to the task and responsibility of the different managerial perspectives to identify the actual response to the expected stakeholders (Phillips 2011, p. 121). The normative perspectives on the other hand offer suggestions that the firm has a responsibility in the meeting of the intrinsic rights of the stakeholders in providing environmental information. Decision making is thus a result of numerous interacting influences and the analytical approach needs to acknowledge such influences in order to provide a solid interpretation of human behavior.

A model is thus developed which provides a link between the different theories on stakeholder and the accompanying motivations for the reason behind some firms having greater carbon reduction than others as identified by the various theories (Ulli-Beer 2013, p. 265). The motivations/reasons are used as the underlying basis of the design of the questions that attempt to find information from sample firms that engaged in the decision to report information to the various stakeholders. The findings from the survey that identified the various motivations/reasons that entered the decision to report acted as part of the metaphoric theory of this research (McDonald 2009). This model is used as the basis of analysis of the interaction between the firm and the stakeholder without a restrain from a certain philosophical perception.

• The dependent variable in the study is reduction in carbon
• The year in which the study was conducted is the moderating or control variable
• The physical climate change of the various countries form the independent variable

The level of carbon reduction depends on the physical climate of a country since the reduction of carbon emission is greatly influenced by the environmental composition of the region (Freeman 2010, p. 188). A more natural and friendly environmental condition promotes carbon reduction resulting into greater carbon reduction levels. The study was done in the year 2013 which is the control variable and which least affects the findings of the study.

• More natural environments promote carbon reduction
• Favourable government policies regarding greenhouse emissions promote carbon reduction in firms
• Carbon reduction policies of a firm promote higher carbon reduction levels

Theoretical Construct	Proxy measure	Dependent (DV) and Independent (IV).   Control Variable (CV), Mediating Variable (MeV) or Moderating Variable (MoV). In a sentence explain why it is a DV, IV, CV, MeV or MoV	Measurement Scale: Nominal, Ordinal, or Scale (Ratio)
Motivation construct	·       Consumption of Renewable energy by the company ·       Environmental regulations for various firms ·       Global combined scope	·       DV: Reduction in carbon is the center of focus of the study ·       IV: Physical climate change affects the level of carbon reduction ·       MoV: Year 2013 since it has least implications on the other variables of the study	Ordinal
Managerial construct	·       Consumption of Renewable energy by the company ·       Environmental regulations for various firms ·       Global combined scope	·       DV: Reduction in carbon is the center of focus of the study ·       IV: Physical climate change affects the level of carbon reduction ·       MoV: Year 2013 since it has least implications on the other variables of the study	Nominal

Survey was used in the collection of data that aided in the identification of the various reasons why some firms had greater carbon reductions than others. More than 500 firms were used in the study to provide a broad range of various physical climates as the independent variable. The sample was stratified as it had to be chosen from industry groups which were identified as being environmentally sensitive. Among the strengths of the survey technique include low cost, convenience in collecting of data, obtaining of precise results, excellent statistical significance. Chances of providing inappropriate data and inflexibility of the design of the method were the key weaknesses (Freeman 2010, p. 211).

References

Decker, DJ 2012, Human Dimensions of Wildlife Management, 5th edn, JHU Press, London.

Freeman, E 2010, Stakeholder Theory: The State of the Art, 4th edn, Cambridge University Press, Cambridge.

Freeman, E 2010, Strategic Management: A Stakeholder Approach, 4th edn, Cambridge University Press, Cambridge.

Glavas, A 2017, Corporate Social Responsibility and Organizational Psychology: Quid pro Quo, 3rd edn, Frontiers Media SA, Berlin.

Hage, M 2012, A Stakeholders Concern: Towards an Economic Theory on Stakeholder Governance, 7th edn, Uitgeverij Van Gorcum, Moscow.

McDonald, D 2009, Research Integration Using Dialogue Methods, 4th edn, ANU E Press, Chicago.

Phillips, RA 2011, Stakeholder Theory, 3rd edn, Edward Elgar Publishing, New York.

Stoll-Kleemann, S 2010, Stakeholder Dialogues in Natural Resources Management: Theory and Practice, 4th edn, Springer Science & Business Media, New York.

Ulli-Beer, S 2013, Dynamic Governance of Energy Technology Change: Socio-technical transitions towards sustainability, 5th edn, Springer Science & Business Media, London.