Stakeholder engagement through empowerment: The case of coffee farmers

• Published date: 01 April 2019
• Author: Simone Colle,Cecilia Casalegno,Chiara Civera
• DOI: http://doi.org/10.1111/beer.12208
• Date: 01 April 2019

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  wileyonlinelibrary.com/journal/beer Busines s Ethics: A Eur Rev. 2019; 28:156 –174 .

© 2018 John Wiley & So ns Ltd

1 | INTRODUCTION

Literature on stakeholder engagement highlights the multifaceted

nature of this conce pt and the lack of a uniq ue framework to iden‐

tify its pr actical applications . A number of studies have emphasi zed

different dimensions and approaches to establish effective engage‐

ment, includi ng: the attribu tion of legitimac y to the company (Collins ,

Kearins, & Roper, 200 5), the establis hment of organiz ational trust‐

worthiness (G reenwood & Van Buren III, 2010), the involve ment of

stakeholde rs in business dec isions (Devin & Lan e, 2014; Manetti,

2011), the role of communic ation and dialog (B urchell & Cook,

2006, 20 08 ; Mena et al., 2010), the jointn ess of interests (Freeman ,

2010), and the cooper ative strategi c posture (Freeman , Wicks,

Harrison, Pa rmar, & Colle, 2010; Strand & Fre eman, 2015). While

most of these st udies focus on high ‐power stakehol ders (typica lly,

employees), limite d attention has been placed upo n engagement of

low‐power stakeholders. We conceptualize low‐power stakeholders

as marginalized (Ahen, 2017; Derry, 2012) since “t hey have limited of

low‐income house holds […] and are distanced a nd alienated from the

centres of decisio n making” (Ahe n, 2017, p. 102) and/or vulnerable

stakeholde rs who have a low capac ity to “exercise direc t influence

on corporatio ns” (Greenwood & Van Bure n III, 2010, p. 432) with

regard to econom ic, regulatory, and market aspec ts and “may enter

(or be entered into) a relat ionship with the organiz ation under some

degree of coercio n” (ibidem, p. 431). In the framework p roposed by

Mitchell et al., these stakeholders are also called dependent, as they

“depend upon others (other stakeholders or the firm’s managers) for

the power necess ary to carry out t heir will” (Mitchell, A gle, & Wood,

1997, p. 877).

In this articl e, we investigate ante cedents for the e ffective en‐

gagement of low‐power stakeholders in the coffee industry through

the case stud y of Lavazza, the l eading Italian c offee roaster. The

Received: 15 Jun e 2017 

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  Revised: 28 June 2018 

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  Accepted: 22 Augus t 2018

DOI: 10 .1111/bee r.12208

ORIGINAL ARTICLE

Stakeholder engagement through empowerment: The case of

coffee farmers

Chiara Civera1 | Simone de Colle2 | Cecilia Casalegno1

1Department of Management, University of

Turi n, Tur in, Ital y

2IÉSEG School of M anagement (LEM‐CN RS

9221), Paris, France

Correspondence

Simone de Coll e, IÉSEG School of

Management , Paris Campus: So cle de la

Grande Arc he 1, Parvis de La D éfense,

F‐92044 Pari s La Défense Cedex , France.

Email: s.decolle@ieseg.fr

Abstract

While most studies on stakeholder engagement focus on high‐power stakeholders

(typically, employees), limite d attention has been devoted to the engage ment of low‐

power stakeholders. These have been defined as vulnerable stakeholders for their

low capacity to infl uence corporatio ns. Our research is fr amed around the e ngagement

of low‐power stakeholder s in the coffee indus try who are, par adoxically, critical

resource providers f or the major roasters . Through the case s tudy of Lavazza—the

leading Italian roa ster—we investigate empowerment ac tions addressed to

smallholder far mers located in Br azil, India, East Afri ca, Haiti, and the D ominican

Republic. We contribute to t he theoretical dis cussion around engagem ent and

empowerment by developi ng a framework linking to gether areas of empowerm ent

(defined in the literat ure) and specific empowe rment actions (emer ging from our

interviews). Our insight s shed light on how organizations can design em powerment

strategies leading to more effective stakeholder engagement and how empowerment

actions can contr ibute to turn low‐power stakeholder s into active business partner s.

We demonstrate that movi ng from a traditional co mpetitive view of corpor ate–

stakeholder rel ationships to a stakeholde r theory view based on a lo gic of cooperative

partnerships reinforces the idea that stakeholder engagement and empowerment are

both entangled wit h the value creation process.

    

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CIVERA et al.

coffee supply c hain is characterized by a high d egree of complexity,

an asymmetry of information among stakeholders, and huge dispar‐

ities in market powe r. In such a context, power a symmetries may

create an infert ile ground for effect ive engagement (Dawkins, 2 014,

2015 ; Mena et al., 2010; Pot ts, 2003) and hinder the d evelopment

of relationships b ased on trust (Gr eenwood & van Bure n III, 2010;

Wicks, Berm an, & Jones, 1999). Theref ore, to improve our und er‐

standing of the engagement of low‐power stakeholders, we frame

our study arou nd the idea that em powerment is a neces sary step

for the effective engagement of these stakeholders. In fact, one of

the main critici sms of the framework by Mitchell e t al. (1997) is that

it suggests t hat managers shou ld be looking at leg itimacy, power,

and urgency as t he only way to prioritize stake holders, with the risk

of ignoring low‐powe r stakeholders “to the ext ent that their voices

are not considere d legitimate or power ful” (Derr y, 2012, p. 258).

Paradoxica lly, in the coffee suppl y chain, these low‐ power, vulner‐

able stakeho lders are critical reso urce providers for firms (P feffer &

Salancik, 20 03) and therefore key actors in th e value creation pr o‐

cess. As the cla ssic studies by Ra ppaport, Swi ft, and Hess , (1984),

Zimmerman (1990), and Pe rkins and Zimme rman (1995) postulate,

empowerment is a p rocess through wh ich individual s, groups, and

organization s gain influence over events an d important matters a nd

outcomes. While the literature on stakeholder empowerment has

primarily emp hasized employee em powerment (Hill & Ra pp, 2014;

Novicevic, Buc kley, Harvey, Halbesleben , & Rosiers, 2003; Waldm an

& Galvin, 20 08), we focus the anal ysis of our case stu dy on small‐

holder farme rs, coffee extr actors, and prod ucers placed at the up per

end of the supply c hain and typic ally owners of smal l portions of

land (Petchers & H arris, 2008).

Most of the resea rch on the coffee supply chai n and its sustain‐

ability issue s has dealt with th e Fairtrade Inter national initia tive

(www.fairt rade.net) an d its influence in t he industry ( Audebrand &

Pauchant, 20 09; Davies & Crane , 2010; Dragusanu , Giovannucci,

& Nunn, 2014; Gielissen & G raafland, 20 09; Hira & Ferrie , 2006;

Ingenbleek & Rein ders, 2013; Morre ll & Jayawardhena, 2010;

Renard, 2010; Utt ing, 2009). The fo cus of these studi es, following

the logic of the Fairtrade certification requirements, is mainly placed

on the economic d imension of empowerment , while other areas that

can effectively empower stakeholders remain under‐looked. Our

study considers empowerment beyond the economic dimension.

In particula r, we aim to investigate the me aning of empowerm ent

for low‐power, vulnerable stakeholders by pointing out empower‐

ment areas, such a s upholding human rig hts and developing bus iness

skills, that are r elevant to smallholder fa rmers and the actions t hat a

roaster can pu t in place to address them. We seek to u nderline how

empowerment actions are designed and undertaken at a corporate‐

NGO level to increase engagement of low‐power stakeholders.

To achieve these purpos es, the paper is organized as fol lows: in

the next section, we discuss the nature of stakeholder engagement

and its linkage s with empowerment. As a res ult of the literature re‐

view, we present a taxo nomy of eight distinct empowerme nt areas

for low‐power sta keholders. In th e context sect ion, we briefly de‐

scribe the cof fee industr y by illustratin g the various st akeholders

along its comp lex supply chain. In the cas e study section, we repo rt

the adopted met hodology an d discuss finding s emerging from t he

interviews wi th Lavazza mana gers and key NGOs fro m different

geographica l areas. We illustr ate specific emp owerment actio ns

undertake n by Lavazza corre sponding to each of t he eight areas

identified in t he taxonomy resu lting from the lite rature. Moreover,

we comment on two ad ditional empowe rment areas that we i den‐

tify from the i nterviews—business co ntinuation and gender e quality.

Finally, we provide conclusions, discuss limitations, and identify sev‐

eral avenues for f urther research.

2 | CONCEPTUAL FRAMEWORK

2.1 | Effec tive engagement in a stakeholder theory

perspective

By examining various studies of engagement within stakeholder

theory, we argue that engagement has two dimensions: engage‐

ment with stakeholders and engagement of stakeholders (Dawkins,

2014, 2015 ; Devin & Lane, 2014; Gr eenwood, 2007; Herr emans,

Nazari, & Mahm oudian, 2016; O’Rio rdan & Fairbass, 2014; Stran d

& Freeman, 2015). On th e one hand, an orga nization needs to e n‐

gage with its st akeholders to b e able to underst and their expecta‐

tions of the imple mented strateg ies and balance th eir interests in

the value creat ion process (Freema n et al., 2010) through a f air

mechanism (Venk ataraman, 20 02). At the highes t level of engage‐

ment with their stakeholders, organizations strive for their empow‐

erment (Herre mans et al., 2016) to esta blish a two‐way dialo g and

joint decision mak ing (Cooper & Owen, 2007; Devin & La ne, 2014).

On the other hand, the engagement of stakeholders means that each

stakeholde r group must feel engaged with an o rganization’s overall

mission and activities. This is achieved when stakeholders feel com‐

mitted, perce ive alignment bet ween their valu es and those of the

organization ( Kumar & Pansari, 2016), ex press consent ( Van Buren,

2001), and attr ibute legitimac y to the organiza tion. Accordingl y,

engagement is not m erely about man aging risks with r espect to a

certain cat egory of stakeh olders and avoiding conflict s of interests

(Girard & Sobc zak, 2012); instead, it po sits an orientation to co llabo‐

ration and par tnering, or a “cooperati ve strategic posture” (Str and &

Freeman, 2015), that is, when stakeholders become active partners

in the value creat ion process. In this sense , engagement enables the

emergence of a coop erative mindset and highlight s the jointness of

interests as a re ason to cooperate. This en tails overcoming the com‐

petitive mindset that characterizes most studies on stakeholder en‐

gagement by str ategy scholars, inclu ding the shared value appr oach

(Porter, 2008; Po rter & Kramer, 2011).

Despite the vas t amount of literatu re that has been deve loped

around the central role of communication (through information, di‐

alog, and inter action) as a means fo r engagement (Ben dell, 200 0;

Cramer, 2002; Cra ne & Livesey, 2003; Fos ter & Jonker, 2005;

O’Riordan & Fairb ass, 2014), communicat ion on its own cann ot do

much. All sta keholders have a moral s tanding, and it take s more than