An important book in the world of sustainable business is Leveraging Corporate Responsibility by CB Bhattacharya, Sankar Sen, and Daniel Korschun. It was published in 2011, so things have moved on, not least the terminology. In 2025 they might well have decided to use the term sustainable business rather than corporate responsibility. Still, their basic idea remains. A key to effective sustainable business is through considering stakeholder psychology.
What Is Corporate Responsibility?
They see corporate responsibility (you can read that as sustainability without much loss of meaning) as being something that worries about a large number of stakeholders, so employees, customers, communities etc… as well as the owners. Such responsibility takes a long-term perspective. It also sees being a better type of business as an opportunity, not simply an obligation. Better types of business can thrive commercially, even ideally take over the business world, because stakeholders prefer to work with them. (A stakeholder is anyone who is influenced by, or who influences, the organization). A key point is that better businesses don’t always need to see themselves as giving something up. They can compete effectively because they have advantages. They are not competing with one hand tied behind their back by caring about the world.
Considering Stakeholder Psychology
The book focuses on psychology. As a marketer I appreciate how important that is but those who only want dollar numbers may not be entirely convinced as most of the evidence shared comes from survey responses. Still what people think is certainly a key stage in their choice. So, it is pretty easy to make the case that considering stakeholder psychology is critically important. Indeed, the benefits that being better as a firm can gain go well beyond increasing customer intentions to buy.
Stakeholder Psychology Matters To Delivering Sustainable Business
The authors look at the psychological relationship between stakeholders as having three main elements. Stakeholders have a much better relationship with the firm — are more loyal to, help more, forgive errors more — if they experience these three elements.
- Stakeholders need to understand what the firm is doing.
- They need to see the benefits, the usefulness of the “good things” that the firm is doing.
- Finally, they need to experience unity — identity with and trust the firm.
Key Lesson: Involving Stakeholders Really Matters
Stakeholders like to feel part of what is happening. Senior managers are used to making decisions. This can be necessary, and having a decider often is effective and quick. Still, in general, people respond much better when they feel they have input into the choices made. Rather than just making the firm do whatever the senior managers think will help the world it is useful to involve employee and get their buy in.
Employees yearn to play a great leadership role in their employer’s CR [Corporate Responsibility] initiatives.
Bhattacharya, Sen, and Korschun (2011), page 156
Employees, and other stakeholders, who feel that the sustainability initiatives are “theirs” are much more likely to work hard to deliver these initiatives. They are also likely become better (more motivated, more committed, more engaged) employees in other aspects of their jobs as a result.
Second Key Lesson: Making Money Is Okay
Another important point from the book is that stakeholders generally don’t have a problem with a firm making money. If it is doing the right things most stakeholders are happy that the better business, rather than the evil corporation, is making money.
As long as a company is genuinely committed to making a difference in the social areas, there is little need to hide profit seeking motives.
Bhattacharya, Sen, and Korschun (2011), page 198
Considering stakeholder psychology — what they want — is an important step towards successful sustainable business.
For more on stakeholders see Improving Stakeholder Involvement In Government Decision Making, Strategic Change And Stakeholders, Measuring Performance In Multistakeholder Firms, Managing For Stakeholders, Stakeholder Management As A Threat, Conscious Capitalism As Stakeholder Management, Win-Wins Are Good For Stakeholders, and Tangibilizing Sustainability’s Value For Stakeholders
Read: C. B. Bhattacharya, Sankar Sen, and Daniel Korschun (2011) Leveraging Corporate Responsibility: The Stakeholder Route to Maximizing Business and Social Value, Cambridge University Press,
https://doi.org/10.1017/CBO9780511920684
