Cognitive Mapping Tools: Review and Risk Management Needs

Risk managers are increasingly interested in incorporating stakeholder beliefs and other human factors into the planning process. Effective risk assessment and management requires understanding perceptions and beliefs of involved stakeholders, and how these beliefs give rise to actions that influence risk management decisions. Formal analyses of risk manager and stakeholder cognitions represent an important first step. Techniques for diagramming stakeholder mental models provide one tool for risk managers to better understand stakeholder beliefs and perceptions concerning risk, and to leverage this new understanding in developing risk management strategies. This article reviews three methodologies for assessing and diagramming stakeholder mental models—decision‐analysis‐based mental modeling, concept mapping, and semantic web analysis—and assesses them with regard to their ability to address risk manager needs.     

Managing Contradiction: Stockholder and Stakeholder Views of the Firm as Paradoxical Opportunity

Stockholder and stakeholder perspectives have been positioned in the literature as being in tension, and thus a potential source of innovation and change. However, researchers have overlooked a systematic examination of this presumption in theory and in practice. This study explores the ways that stockholder and stakeholder assumptions are presented by theorists and compares these with expressions of stockholder and stakeholder perspectives used by firms in practice. We argue that theoretical entrenchment dichotomizing these perspectives has disrupted the ability of researchers to leverage this tension. While scholarship remains trapped in a vicious cycle, we also argue that firms in practice express only the acceptance dimension of a virtuous cycle. Our empirical research demonstrates that firms accept and accommodate the paradoxical tension between managing for stockholders versus balancing the interests of stakeholders. This is evidenced by strategies we identify as book‐ending, cadence, continuous and simultaneous co‐mingling, and hybridization. We find that in practice these tensions are more integrated whereas in theory they are treated as more distinct and, often, in conflict. We suggest ways in which both scholarship and practice can better leverage tension as paradoxical opportunity.     

Flood Risk Management: US Army Corps of Engineers and Layperson Perceptions

Recent severe storm experiences in the U.S. Gulf Coast illustrate the importance of an integrated approach to flood preparedness planning that harmonizes stakeholder and agency efforts. Risk management decisions that are informed by and address decision maker and stakeholder risk perceptions and behavior are essential for effective risk management policy. A literature review and two expert models/mental models studies were undertaken to identify areas of importance in the flood risk management process for layperson, non‐USACE‐expert, and two USACE‐expert groups. In characterizing and mapping stakeholder beliefs about risks in the literature onto current risk management practice, recommendations for accommodating and changing stakeholder perceptions of flood risks and their management are identified. Needs of the U.S. Army Corps of Engineers (USACE) flood preparedness and response program are discussed in the context of flood risk mental models.     

The Primary Importance of Corporate Social Responsibility and Ethicality in Corporate Reputation: An Empirical Study

We examine three assumptions commonly held in the corporate reputation literature: (1) reputation ratings of owners and investors are generally representative of all stakeholders; (2) stakeholders will generally provide a higher reputation rating to firms that emphasize corporate social responsibility versus firms that do not; and (3) profitability is the primary criterion of importance to all stakeholders when rating a firm's reputation. Using an exploratory in‐class exercise, our findings suggest that: (1) there are significant differences among stakeholder groups in their reputation ratings; (2) firms that emphasize corporate social responsibility are not rated more highly across all stakeholder groups; and (3) for all stakeholder groups, the ethicality criterion explained more of the variance in firms' reputation ratings than the profitability criterion.     

Taking (and Sharing Power): How Boards of Directors Can Bring About Greater Fairness for Dependent Stakeholders

One of the ways in which scholars have sought to broaden the discussion of the social responsibilities of corporations and their managers is through the development of the stakeholder concept. The primacy of shareholder interests in corporate‐governance processes and managerial action is, however, a myth that justifies all sorts of managerial self‐interest seeking and exploitation of particular stakeholder groups. What makes this myth particularly problematic—from the standpoint of fairness and corporate governance—is that not all nonshareholder stakeholders are equally situated with regard to their ability to secure fair treatment. In this article, I explore the ethical dimensions of board responsibilities to dependent stakeholder groups by first describing the differences between shareholders and nonshareholder stakeholders with regard to risk, examining why dependent stakeholders (stakeholders with legitimate and urgent claims, but no power) are particularly important from the standpoint of stakeholder risk, and discussing how stakeholder consultation might provide a partial fix to such problems. I will conclude with proposals for how boards can more faithfully discharge their ethical responsibilities to dependent stakeholder groups, and in so doing facilitate stakeholder involvement in corporate governance in ways that promote fairness in organization–stakeholder relationships.     

Modeling Insurer‐Homeowner Interactions in Managing Natural Disaster Risk

The current system for managing natural disaster risk in the United States is problematic for both homeowners and insurers. Homeowners are often uninsured or underinsured against natural disaster losses, and typically do not invest in retrofits that can reduce losses. Insurers often do not want to insure against these losses, which are some of their biggest exposures and can cause an undesirably high chance of insolvency. There is a need to design an improved system that acknowledges the different perspectives of the stakeholders. In this article, we introduce a new modeling framework to help understand and manage the insurer's role in catastrophe risk management. The framework includes a new game‐theoretic optimization model of insurer decisions that interacts with a utility‐based homeowner decision model and is integrated with a regional catastrophe loss estimation model. Reinsurer and government roles are represented as bounds on the insurer‐insured interactions. We demonstrate the model for a full‐scale case study for hurricane risk to residential buildings in eastern North Carolina; present the results from the perspectives of all stakeholders—primary insurers, homeowners (insured and uninsured), and reinsurers; and examine the effect of key parameters on the results.     

Can a Participatory Approach Contribute to Food Chain Risk Analysis?

We consider food chain risks and specifically address stakeholder participation in the risk analysis process. We combine social and natural science perspectives to explore the participation process in relation to food risks and, in particular, to consider how some specific participation processes might be scientifically evaluated and how stakeholder participation in general might be incorporated into food risk decision making. We have built considerations based on three large integrative case studies that examine aspects of participatory processes. Here we use the case studies collectively to illustrate observations and beliefs concerning the nature of the interaction of stakeholders with established quantitative risk methodologies. This account is not supported by any large volume of analysis. The views in the report are expressed in relation to an accepted risk analysis framework and also with respect to probabilistic modeling of risks and are illustrated where possible with anecdotal reports of actual case study events.     

Spatial Transmission Models: A Taxonomy and Framework

Within risk analysis and, more broadly, the decision behind the choice of which modeling technique to use to study the spread of disease, epidemics, fires, technology, rumors, or, more generally, spatial dynamics, is not well documented. While individual models are well defined and the modeling techniques are well understood by practitioners, there is little deliberate choice made as to the type of model to be used, with modelers using techniques that are well accepted in the field, sometimes with little thought as to whether alternative modeling techniques could or should be used. In this article, we divide modeling techniques for spatial transmission into four main categories: population‐level models, where a macro‐level estimate of the infected population is required; cellular models, where the transmission takes place between connected domains, but is restricted to a fixed topology of neighboring cells; network models, where host‐to‐host transmission routes are modeled, either as planar spatial graphs or where shortcuts can take place as in social networks; and, finally, agent‐based models that model the local transmission between agents, either as host‐to‐host geographical contacts, or by modeling the movement of the disease vector, with dynamic movement of hosts and vectors possible, on a Euclidian space or a more complex space deformed by the existence of information about the topology of the landscape. We summarize these techniques by introducing a taxonomy classifying these modeling approaches. Finally, we present a framework for choosing the most appropriate spatial modeling method, highlighting the links between seemingly disparate methodologies, bearing in mind that the choice of technique rests with the subject expert.     

Beyond Transparency: Information Overload and a Model for Intelligibility

The role and evaluation of the modern corporation is being challenged by multiple stakeholders, changing markets and public expectations. Unfortunately, corporate governance, regulation and accounting have played a prominent role in business failure for the past decade resulting in a growing lack of public confidence in our markets. We present a new model that contributes to improving the quality of corporate information by providing not more, but better information through increased intelligibility of overall information, benefiting both the firm and its broad array of stakeholders. It has become apparent that boards, management and regulators have been unable to cope with the rise of business failures by adding increasing layers of regulation that have often served only to exacerbate the complexity and further cloud the transparency of needed information. We have identified a growing number of forward‐thinking firms that have found alternative means to provide betterinformation and strengthen their companies. We offer a stakeholder‐centric model for improving information intelligibility based upon the extensive scope and variety of external input derived from the growing social movement organizations. With the added focus on intelligibility, these groups can help foster greater corporate responsibility, meaningful transparency, increased stakeholder benefits, and improved overall performance of the firm.     

Unpacking the Mechanism by which Corporate Responsibility Impacts Stakeholder Relationships

Most research on corporate responsibility (CR) has investigated CR from the perspective of organizations, often focusing on how organizations define, manage and implement CR to gain benefits or competitive advantage. The benefits of CR for organizations are, however, often said to be achieved through increased support of stakeholders. Despite this, limited attention has been given to understanding CR from the perspective of stakeholders and, in particular, the mechanism by which CR drives stakeholder support. This study addresses this deficit. Building on advances in the application of psychological theories to the field of management, the research develops and empirically tests a theoretical model of how CR‐related experiences and beliefs drive stakeholder trust and positive intent. The research is conducted with customers (n = 708) and employees (n = 359) of a service organization in the UK that introduced a range of CR‐related activities into their business. The findings contribute to literature by empirically demonstrating (a) the impact of CR‐related experiences on the development of beliefs about, and trust towards, the organization; (b) the importance of ‘others‐related’ CR experiences even in the presence of ‘self‐related’ CR experiences; and (c) the role of beliefs as partial mediators in how experiences of CR, both ‘self‐related’ and ‘others‐related’, translate into trust and positive intent.     

Strategic Management of Operations in the Emergency Department

This study is based on the analysis of field data on the revenues and patient flows that we collected on all adult emergency department (ED) visits to a level‐1 trauma, tertiary referral center. Our objective was to provide researchers in operations a rich overview of the processes, resources, and metrics of financial and operations performance in the ED. We analyze how patients, physicians, hospitals/physician employer groups, and payers are party to the value created and financial workflow of the ED. A waterfall model for professional services revenue is developed that highlights the impacts of changes in processes, resources, scale, complexity, and mix of patients treated in the ED. We also discuss future implications of new compensation models and potential scenarios that will focus upon controlling costs while maximizing population health and patient satisfaction. These models will necessitate re‐engineering of operations in the ED from a strategic perspective. Four major thrusts for selecting the capacity portfolio in the ED operations to align the interests of all the stakeholders are recommended. New avenues for research are also identified.     

Modeling the Risks of Nonindigenous Species Introductions Using a Patch-Dynamics Approach Incorporating Contaminant Effects as a Disturbance

The establishment and spread of invasive or nonindigenous species has caused concern from stakeholders in affected areas, and has prompted many field and modeling studies. We used stochastic two species, circular three patch dynamic models to investigate the patterns of invasion and impacts upon the affected species. Both persistent and degradable toxicants were incorporated as parts of the model system to act as disturbance regimens. There is a clear series of patterns that result from these simulations. Competition increases population variability, but decreases the number of distinct outcomes possible from the same initial conditions. Isolation of the patch of the introduction was the main determinant of successful establishment through a process we call the beachhead effect. Coexistence of species was often possible in local patches, contrary to the analytical solutions of Lotka-Volterra equations and numerous modeling studies. Contaminants and their resultant disturbances are important as contributors to the stochastic nature of models. The stochasticity leads to a variety of outcomes from some sets of initial conditions. Different outcomes have different probabilities of occurrence and are dependent upon the specific initial conditions of the simulation. A clear pattern that is apparent is the "beachhead effect," where the invasive establishes a population within a relatively remote patch before migrating to the remainder of the landscape. We make predictions and provide specific research hypotheses as to the causes and effects of invasive species establishment, spread, and impacts.     

Trust,Morality, and the Privatization of Water Services in Developing Countries

This article examines the business of water privatization and the ethics implied in the transformation of the water services sector in developing countries. Drawing on data derived from field visits and semi‐structured interviews held with members of government, nongovernmental organizations, and other stakeholders in one country undergoing transformation in this sector, Ghana, the article considers the ethical perspectives of the various involved stakeholders. The analysis draws on three perspectives—Gilligan's ethic of care, Rawls’ principles of justice, and virtue ethics—which together highlight the economic, class, and gender‐based dimensions of the privatization debate. Finding that endemic mistrust characterizes this debate, the article considers what is needed to re‐instill trust among stakeholders. Specific implications are provided for business leaders and government policymakers.     

Exploring the Impact of Social Axioms on Firm Reputation: A Stakeholder Perspective

This study proposes a model of how deeply held beliefs, known as ‘social axioms, moderate the interaction between reputation, its causes and consequences with stakeholders. It contributes to the stakeholder relational field of reputation theory by explaining why the same organizational stimuli lead to different individual stakeholder responses. The study provides a shift in reputation research from organizational‐level stimuli as the root causes of stakeholder responses to exploring the interaction between individual beliefs and organizational stimuli in determining reputational consequences. Building on a conceptual model that incorporates product/service quality and social responsibility as key reputational dimensions, the authors test empirically for moderating influences, in the form of social axioms, between reputation‐related antecedents and consequences, using component‐based structural equation modelling (n = 204). In several model paths, significant differences are found between responses of individuals identified as either high or low on social cynicism, fate control and religiosity. The results suggest that stakeholder responses to reputation‐related stimuli can be systematically predicted as a function of the interactions between the deeply held beliefs of individuals and these stimuli. The authors offer recommendations on how strategic reputation management can be approached within and across stakeholder groups at a time when firms grapple with effective management of diverse stakeholder expectations.     

Who Holds the Stakes? A Case Study of Stakeholder Identification at Two Nuclear Weapons Production Sites

Traditional risk assessments, including those involving the United States Department of Energy (USDOE), are often criticized for producing useless or noncredible management responses because they did not meaningfully involve the public. The first step to involve the public is to identify appropriate active participants (stakeholders). This study was done to understand the processes used to identify stakeholders to serve on advisory boards established at the two largest remediation sites in the United States: the Hanford Nuclear Reservation in Washington state and the Savannah River Site in South Carolina. The Hanford stakeholder identification process produced an interest-based board whereas the Savannah River Site strategy produced population-based representation. The basic goals of the stakeholder advisory groups were similar. However, different processes were used to identify the participants for the groups in part because of distinctly different social and cultural conditions in the areas affected by the operations of the two facilities, and in part because of the different level of trust of the USDOE and their contractors at Hanford compared with Savannah River. The discussion analyzes their different needs and potential for successful citizen participation.     

The Impact of Population,Contact, and Spatial Heterogeneity on Epidemic Model Predictions

Our objective was to evaluate the effect that complexity in the form of different levels of spatial, population, and contact heterogeneity has in the predictions of a mechanistic epidemic model. A model that simulates the spatiotemporal spread of infectious diseases between animal populations was developed. Sixteen scenarios of foot‐and‐mouth disease infection in cattle were analyzed, involving combinations of the following factors: multiple production‐types (PT) with heterogeneous contact and population structure versus single PT, random versus actual spatial distribution of population units, high versus low infectivity, and no vaccination versus preemptive vaccination. The epidemic size and duration was larger for scenarios with multiple PT versus single PT. Ignoring the actual unit locations did not affect the epidemic size in scenarios with multiple PT/high infectivity, but resulted in smaller epidemic sizes in scenarios using multiple PT/low infectivity. In conclusion, when modeling fast‐spreading epidemics, knowing the actual locations of population units may not be as relevant as collecting information on population and contact heterogeneity. In contrast, both population and spatial heterogeneity might be important to model slower spreading epidemic diseases. Our findings can be used to inform data collection and modeling efforts to inform health policy and planning.     

基于SVN的重大工程组织安全行为价值网络及驱动路径研究

重大基础设施工程(以下简称重大工程)的实施涉及多方组织，组织之间形成复杂的利益相关者关系，合作效率及组织安全行为的有效性对重大工程安全管理绩效具有重要影响。本文基于价值理论、利益相关者理论和利益相关者价值网络(Stakeholder Value Network，SVN)分析方法，研究重大工程组织安全行为(Organizational Safety Behavior in Megaproject，MOSB)在利益相关者之间的价值交换和传递情况，构建了包含三类组织安全行为、八类利益相关者和61条价值流的MOSB-SVN模型。研究表明，MOSB-SVN模型能够通过识别关键利益相关者、关键行为和高分价值路径，得出各利益相关者的价值获取能力以及三类组织安全行为的执行效果。依据模型分析结果提出价值提升建议，为提高重大工程安全绩效提供新的思路。     

The Impact of Stakeholder Management on Corporate International Diversification

This article explores the relationship between stakeholder management and international diversification. We differentiate between strengths and concerns in stakeholder management to demonstrate the differential effects of the two aspects of stakeholder management. Previous research on stakeholder theory often focuses on the importance of stakeholder relations, trying to build a business case of relational capital that results from strong stakeholder management. Such a relational approach, however, overlooks the process of managing stakeholders, a process that allows firms with strengths in stakeholder management to develop an important capability of managing tensions. In this study, we argue that this capability, an inherent part of stakeholder management, can be critical when firms face increased complexity during the process of international diversification. We therefore propose that strengths in stakeholder management are positively related to international diversification, while concerns in stakeholder management are negatively related to international diversification. Using panel data for 169 US multinational firms over a 10‐year period, we find support that strengths in stakeholder management facilitate international diversification. We discuss the contributions of our findings to stakeholder theory and international business research.