A Study On Enterprises Sustainable Development Based On "Stakeholder Theory"

In the past 30 years of planned economy period, Chinese enterprises, especially the State-Owned Enterprises (SOE), had taken too much social functions and responsibilities, so that they had to be confronted with heavy burdens and therefore it was difficult for them to develop freely and easily. With the Reforming and Opening-up in the late 1970s, the management ideas of maximizing the profits and minimizing the cost, were widely accepted by enterprises and society. With the awakening, promoting and strengthening of enterprises' awareness on profits, firms have seen an unprecedented fast development under the economic incentive to pursue maximized profits, while firms' awareness of interests and rights of stakeholders, social accountability and environmental protection have been weakened gradually. Those enterprises have obviously improved their economic performance, at the same time, some problems appeared, including damage to the rights and interests of their stakeholders, increase of negative social effects, more losses from environmental pollution and of ecological destruction. Hence, many enterprises fell into the crisis or harassment of sustainable development. A critical reason for this phenomenon is the corporate development ideas and guiding thoughts, which only emphasize the theory of shareholders' primacy and focus on the maximizing the shareholder's equity after the Reforming and Opening Up. Therefore, it is necessary to change the traditional thoughts of corporate development strategy and management dominated by the shareholder primacy theory, rebuild the concepts of corporate development and innovate the corporate development strategy. So, this study will take research and analysis on the issue of corporate sustainable development strategy to establish an analysis frame of strategy method for corporate sustainable development under the stakeholder theory, based on the perspective of stakeholders. In some sense, it is a challenge to the corporate development strategy and management theory dominated by traditional firm theory, which is a new tentative study.Aiming at theoretic and practical issues in the formulation of corporate sustainable development strategy, this paper will study the theoretical method of strategic planning, strategic goals and measures for realizing strategic goal of corporate sustainable development, by application of the theory and method of stakeholder theory. Based on that, an empirical analysis on sustainable development of China Three Gorges Project Corporation (CTGPC) will be made to validate the science and practicality of stakeholder theory when analyzing the strategy of corporate sustainable development, help enterprises go out of mistaken areas of strategy management, change the ideas and methods of strategy management, find the right path to sustained development, and promote the whole economy to develop sustain ably and construct harmonious society.First, this paper will take a theoretic summary of the up-dated development of stakeholder theory, demonstrate the essential differences and divergences between them, and present the enlighten and guiding significance of stakeholder theory in the research and formulating corporate development strategy, on the base of comparation of the corporate sustainable development strategy dominated by shareholder primacy theory and that dominated by stakeholder theory.Then, this paper will apply the Stakeholder-analysis Approach in analyzing corporate strategy environment, point out the limitations of traditional theory on strategy management when analyzing the environment of corporate strategy (including PETS analysis, The core Factor-analysis Approach, GREP, SWOT analysis), establish a model for corporate strategy environment stakeholder analysis and a model for combination analysis of corporate sustainable development strategy, and take an empirical study on strategy environment of CTGPC sustainable development by applying the model.Additionally, in view of the defects in corporate development strategic goal dominated by traditional firm theory, this paper will demonstrate the relationship between stakeholder theory and corporate social responsibility, and that between corporate social responsibility and sustainable development strategic goal, establish a stakeholder model of corporate sustainable development strategic goal, point out that firm's status in taking social accountability does not only highly relate to concept and awareness of corporate social accountability, but also be constrained by the economic efficiency or financial performance, and put forward that strategic goal for corporate sustainable development should be the maximized integrated comprehensive value, which is including not only firm's benefits in short term, but also that in long term, not only each firm's benefits, but also social benefits, not only firm's economic benefits, but also that in ecologic environment, not only benefits of shareholders, but also that of stakeholders. The corporations' prime motivation and ultimate objective for strengthening management of social responsibility are mainly derived from the need of corporation's sustainable development. Only after having taken social responsibility, the enterprise should achieve sustainable development and the business should be built to last. This paper will also take empirical study on the strategic goal for CTGPC sustainable development, by applying the established stakeholder analysis model for corporate sustainable development strategic goals. Finally, from the perspective of the stakeholder theory, this paper will discuss specific measures for implementing corporate sustainable development strategy from three aspects: technology innovation, enterprise system innovation, and corporate culture innovation. Then an empirical study on measures for sustainable development strategy of CTGPC will be taken according to basic ideas on strategic measures for corporate sustainable development. It will be pointed out to forge corporate core competence by technology innovation, to establish a corporate governance mechanism for sustainable development by enterprise system innovation, to remold corporate culture based on the idea of stakeholders' interests and rights by corporate culture innovation. In the author's view, CTGPC, as a large-scale hydropower exploitation SOE, has to work out strategy measures for sustainable development, which pay attention to rights and interests of stakeholder, keep balance between benefits in short term and that in long term, between corporate efficiency, social effects, and ecological impacts, in order to realize coordination and unity of benefits from economy, society and ecology, optimize the benefits of stakeholders on the whole, ensure corporate development and sustainable development of the whole economy are coordinated and develop sustainably. In the strategy, industrial structure should be optimized and technology innovation should be taken to put up an industrial platform for sustainable development; Corporate governance should be improved by enterprise system innovation; Corporate culture innovation will safeguard the rights and interest of stakeholder to promote to realize the harmony and co-existing of enterprise and society, and that of enterprise and ecology or environment.It is demonstrated further in this study that firms are cells and footstones of the whole economy. It is possible to develop sustain ably for the whole economy only after realizing corporate sustained development, and only when firms pay attention to the issue of sustainable development and take it as a priority goal and task, which is hope and guarantee of sustainable development of the whole economy.