Toward a Stakeholder Theory of the Firm: The Case of the Saturn Partnership
Author(s)
Rubinstein, Saul
Kochan, Thomas
Date Issued
June 6, 2002
Abstract
This paper seeks to engage the organization theory community in contemporary
debates over the role of the cxxporation in American society by building a stakeholder
theory of the t%n. We develop a set of normative premises and positivist propositions
derived from these debates, from a combination of organization and industrial relations
theories, and by using data from the Saturn Corporation. Three questions are posed for
a stakeholder theory: (1) Under what conditions is a stakeholder firm likely to emerge,
(2) what are the critical determinants of performance in a stakeholder firm, and (3)
what will determine the sustainability and diffusion of this organizational form in the
American environment? The history, design features, and dynamics of the labormanagement
partnership at Saturn are used to illustrate and interpret a specific case of
employees as stakeholders. Saturn?s governance structure, work organization, and
internal processes fit the characteristics of a stakeholder firm. Employees establish
themselves as critical stakeholders by using their knowledge to improve organizational
performance. The local union likewise contributes to firm performance by organizing
workers into a dense social network that contributes to problem solving, conflict
resolution, and quality improvement. However, the legal and political environment in
which the firm operates produces considerable uncertainty over the sustainability and
diffusion of Saturn?s features in particular, and the stakeholder organizational form in
general. Additional hypotheses and research questions are proposed to continue theory
building around the more general model of the stakeholder firm. Organization theorists
are encouraged to take up the analysis of stakeholder models and thereby contribute to
the contemporary and future debates over the role the corporation in American society.
Subjects
Saturn
partnership
stakeholder
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