Essay: Stakeholder theory

The stakeholder theory is key in our paper, which mainly focuses on firms and its stakeholders, but it is also useful for (a steady) tourism development on World Heritage sites (Jawahar & Mclaughlin, 2001); (Freeman & McVea, 2001); (Stieb, 2009); (Strand, 2015); (Gibson, 2000); (Freeman, 1984); (Nicholas, et al., 2009) & (Freeman, 1994). The stakeholder theory has been created by Freeman (1984) when he felt a need to create a stakeholders framework for businesses since times became more turbulent. Freeman sees a stakeholder as any individual or a group who can influence or is affected by organisational achievements while reaching the objectives (Freeman & McVea, 2001) & (Jawahar & Mclaughlin, 2001). As stated before, stakeholders can be from any kind, such as government, customers, tourists, competitors, et cetera (Freeman & McVea, 2001) arguing that corporations should be managed in stakeholders interests (Freeman, 1994). In academics, researchers often use Freeman’s (1984) theory as a starting point for defining definitions and mention the interdependence between the firm and its stakeholders (Jawahar & Mclaughlin, 2001). It has been noted that without continuing relationships with primary stakeholders, an organisation will not be able to survive in a turbulent world (ibid). Gibson (2000) argues that enterprises should also consider secondary stakeholders, stakeholders that may affect the firm in a more indirect way such as labour organisations, since they can become a direct stakeholder through different types of actions. A stakeholder can help but also hurt an enterprise (ibid). The stakeholder theory is meant to break the confusing circle (avoiding problems), is a strategic management process and not management planning process, is about the survival of the firm, is focusing on long-term success and relationships with stakeholders, builds on concrete facts and analysis whereby stakeholders are not ‘just’ given and it is about concrete names and faces whether it is an individual or an organisation (Freeman & McVea, 2001). Management of stakeholders results in better consequences, a better respect of human rights and a better human character (Stieb, 2009, p. 407).
Also the importance of the stakeholder theory may not be ignored anymore since the society becomes more aware and claiming towards corporations when they ask for moral behaviour, high company standards and openness about information for instance (Strand, 2015). An important task laying ahead is redefining as well as redeveloping the stakeholder theory in order to benefit from this trend as much as possible (ibid). While the stakeholder theory is originally focusing on business management, the stakeholder theory can also be transferred into the World Heritage context (Nicholas, et al., 2009). Nicholas, et al. (2009) mention the destination community’s assets as a sharing opportunity by tourists, locals as well as the public and private sector. The tourism development becomes a public and social good to be shared by different stakeholders in a specific destination (ibid). This requires much more collaboration between management and stakeholders as practised today what can be seen as a link with the stakeholder theory and (sustainable) tourism development (ibid, p. 393).
Also the view on how to manage World heritage sites has been changed through an inclusive approach on heritage management as well as community engagement (Wijesuriya, et al., 2013) & (Phillips, 2002; 2003). Firstly, the focus was on conservation, managed mainly for visitors and tourists and it was about protection. Nowadays, it is run by social and economic objectives and it is managed with local people in mind more as it was before (ibid; ibid). Secondly, the central government is not directly running the site anymore but partners and different stakeholders are running it now (ibid; ibid). Thirdly, before it was mostly managed and planned against people and also without taking into account local opinions what is changing into management for and with local people answering in the needs of local people as well (ibid; ibid). Fourthly, the context is changing from seperately developed heritage sites who were managed as ‘islands’ into a part of national, regional and international systems all developed as networks with a long-term perspecitive (ibid; ibid). Lastly it will not be financed by the taxpayer only anymore but from several recourses such as tourism (ibid; ibid). Swensen & S??tren (2014) argue in their case study in Norway about living farming landscapes that the new system of selecting world heritages is challenging top-down management, so a more integrated management becomes necessary as an answer on management failure in diverse protected regions. Also Leask & Fyall (2006) explains that until not so long ago just a limited amount of stakeholders were involved in decision making who were mainly governments, conservation experts and local authorities. The local society, businesses, groups of people, tour companies and visitors were largely left out in the process (ibid). That could be one of the reasons of management failure, however, critics argue that involving stakeholders with different interests could cause problem or slow down the decision making process, but there is not directly a negative effect of local participation even when saying that the quality of management plans or actions will not improve directly (De Brucker, et al., 2013) & (Schultz, et al., 2011). Therefore it is important to find the right stakeholders at the best positions (ibid) & (ibid). If that is the case, efficiency increased, accuracy was improved, legitimacy has been strengthened and landscape services were enhanced (Fagerholm, et al., 2012) & (Schultz, et al., 2011).
While looking at the branding literature, King and Halpenny (2014) argue that the logo of a brand has little explanatory value to visitors or customers and therefore many companies has transformed logos from abstract into logos whereby the brand name is part of the logo. Leask & Fyall (2006) also argue for rebranding where places and people are combined or in other words: visualising the brand. Creativity and confidence of visitors and the community can flourish in that way when the cultural identity is a source of inspiration for everybody. In addition Davis & Corsane (2014) have introduced ecomuseums as an alternative for traditional museums for cultural landscapes in for instance World Heritage sites. The traditional formula sounds as building + collections + experts + public while an ecomuseum focuses on territory + memory + heritage + population (ibid). An example is the Cortemilia ecomuseum (Piedmont, Italy) where they have rebuilded the community through appreciation of the cultural landscape.
‘The ecomuseum went on to restore a farmhouse, its adjacent vineyards and orchard. Sitting atop a superb terrace it is now used by the local community, hosts school visits, specialists groups and general training courses. The vineyard has it own niche production of quality wine and the restored terraces are farmed for local varities of vegetable and fruits, conserving rare varieties’ (Davis & Corsane, 2014, p. 126).
The above citation brought new social networks, a growing sense of the community and a better understanding of the World Heritage site especially for the local society.
Another aspect is the change from the short-term into the long-term management perspective (sustainable perspective) as mentioned before (Wijesuriya, et al., 2013) & (Phillips, 2002; 2003). The reasoning behind becoming a World Heritage site has often been the tourism and economic considerations (Ryan & Silvanto, 2014). That is because of the common idea that having a World Heritage site promotes tourism but that differs among countries and regions especially when comparing rich and poor countries where World Heritage sites have less influence on tourism arrivals in richer countries and also too many World Heritage sites in one country shows a decline of tourists except on the short-term (Huang, et al., 2012) & (Su & Lin, 2014). Referring to what has been said before, the focus should be more on support to the private tourism sector (and society) to obtain sustainable development of the tourism sector on World Heritage sites (Cuccia, et al., 2014).
According to Bonetti, et al. (2014), the tourism sector is changing as well in which creative tourism, education tourism, gastronomic tourism (mostly related to food and drinks), spa and health tourism and cultural volunteer work play a key role more and more what seems as that kind of tourism that require stakeholder involvement. Lastly, the destination identity as well as image is important to communicate to stakeholders whereby stakeholder involvement and partnerships with their satisfaction of the goals and needs is key in succesful destination branding (Baker & Cameron, 2008); (Hankinson, 2009) & (UNWTO, 2013). In short, stakeholder involvement on World Heritage sites has become more and more important to avoid management failure and to be a succesful destination brand. The stakeholder theory may help for stakeholder awareness as well as rebranding the UNESCO World Heritage brand and local brands.