Journal of Environmental Protection, 2011, 2, 1375-1387
doi :1 0.4236/ jep.2011. 210160 Published Online December 2011 (
Copyright © 2011 SciRes. JEP
Adaptability, Entrepreneurship and Stakeholder
Integration: Scenarios and Strategies for
Environment and Vulnerability
Jerónimo De-Burgos-Jiménez1, Diego A. Vazquez-Brust2, José A. Plaza-Úbeda1
1Department of Business Administration, University of Almería, Almería, Spain; 2BRASS: ESRC Centre for Business Relationship s,
Accountability, Sustainability and Society at Cardiff University, Cardiff, UK.
E-mail: {jburgos, japlaza},
Received July 18th, 2011; revised September 26th, 2011; accepted October 29th, 2011.
The vicious circle between poverty and environmental deterioration is a major challenge for those developmental
approaches which look to improve the welfare of vulnerable communities. Environmental deterioration increases pov-
erty while, at the same time, poverty causes further environmental deterioration as the business activities which com-
munities depend upon for survival aggravate environmental deterioration by causing pollution and waste. It is therefore
necessary that firms and communities collaborate in order to develop innovative solutions to break this vicious circle.
This paper argues that such collaboration should be based on genuine stakeholders integration and entrepreneurship,
proposes a holistic framework to guide business intervention strategies, and further explores collaboration scenarios
between firms and communities.
Keywords: Sustaina bility, Vulnerability, Sustainability, Stakeholder Integration, Stakeholder Involvement and
1. Introduction
Environmental deterioration increases poverty in com-
munities living in vulnerable environments or in areas
highly contaminated by agricultural or industrial activity,
where the productivity of land decreases and the costs of
protecting health increase. Although the poor consume
little and contribute little to pollution, poverty increases
the chances of exposure to e n viron mental de terio r ation [1,
2], because it creates incentives for weak governance. In
such cases, environmental and social problems reinforce
each other, giving rise to a so-called “vicious circle” be-
tween poverty and environmental deterioration [3,4]. In
this context, it is very important that both the economic
focus and the public dialogue are combined [5]. This
paper presents a conceptual framework and strategies
intended to break this vicious circle by taking into joint
consideration the concepts of stakeholder engagement
and integration, entrepreneurship and adaptability.
Poverty, environment, and growth are all central topics
of interest for policy makers, academics and other re-
searchers [6]. Studies of poor households and communi-
ties suggest that their behaviour with respect to the envi-
ronment is very complex [2]. The range of choices and
tradeoffs available to the poor is affected by their access
to key markets (e.g., for land, labor, credit as well as
goods and services) as well as the quality and state of the
surrounding environment on which their livelihoods de-
pend [2]. In this context, it is necessary that firms and
stakeholders endeavour to develop collaborative prac-
tices of dialogue and adaptation [7], but it is also essen-
tial that the level of entrepreneurship be high on both
sides so that ne w challenges to sustai nability which arise
from the competitive global e nvironment and global s us-
tainable development are rapidly faced [8,9]). In order to
improve the rate of economic development, it is also ne-
cessary to suggest how firms should allocate resources
towards this objective, how a company must identify in-
tervention issues, how a company has to improve its al-
liances with stakeholders and how a company has to try
to create new markets by supporting entrepreneurs.
The relationship between entrepreneurship and sus-
tainable development is conce rned with the link bet ween
business and environment. The important role of entre-
preneurship is well reflected in the literature as achieving
Adaptability, Entrepreneurship and Stakeholder Integration: Scenarios and Strategies for Environment and Vulnerability 1376
a balance between eco nomic viabil ity and enviro nme nt, and
social goals [10]. Thus, a strong link is identified between
entrepreneurialism and environmentalism [11] and also
between entrepreneurship and social development [12].
This model may help communities to participate in de-
veloping successful initiatives [13], as has happened in
several initiatives in the sector of eco-tourism [14] or in
the well-known example of the Grameen Bank micro-
credits [15].
Involving the community in businesses is an ongoing
process in developing countries [16]. These authors con-
ceptualise Corporate Community Involvement govern-
ance as the structures, processes and rules that are so-
cially constructed for organising, coordinating and steer-
ing the collective actions of participants involved in CCI
programmes. These authors highlight the importance of
community interaction and participation to further its in-
volvement in firms, pointing out that this ca n be ach ieved
by means of a set of activities whose presence the litera-
ture has recognised in processes of stakeholder engage-
ment [17] and stakeholder integration [18].
The following sections study in greater depth the pro-
blem of the vicious circle between poverty and environ-
mental deterioration and then go on to explore some key
factors such as the level of firm stakeholder integration
and the level of stakeholders adaptive and entrepreneur-
ship capacity. These key factors may be grouped as in-
ternal or external to the firm and by these groupings we
may determine the matrix of firm strategies in the natural
environment-poverty relationship. We then conclude with
some final orientations and recommendations.
2. The Problem: “Vicious Circle” between
Poverty and Environmental Deterioration
Poverty affects environmental quality and the state of the
environment is affected by people’s living conditions [6,
19]. In our environment the “vicious circle” between po-
verty and environmental deterioration is plain to see.
Figure 1 shows the vicious circle between environmental
Figure 1. The Medical poverty trap at the household level.
Source: [88].
illnesses and p overty.
Civil society demands more responsibility and inter-
vention from the companies to solve social and environ-
mental problems [20]. This can be seen, for instance, in
the growing implementation of environmental and social
strategies by the companies [21]. However, social and
economic vulnerability also operates as barrier to the
development of sustainable e nvironmental strategies [22],
due to the urgency of reaching a minimal level of eco-
nomic performance by the companies. The companies
working in vulnerable areas tend to be subject to cost—
based competence, have fewer resources to invest in the
environment and have also fewer incentives due to the
absence of regulatory or social pressure [23]. In many
such cases, proactive solutions, from an environmental
point of view are difficult to apply because of their social
effects. Cleaner processes tend to use less workers,
which increases unemployment, recycling and waste re-
duction, which in turn can affect, for example, marginal
economies that live on informal recycling.
In this context, it becomes necessary to break the vi-
cious circle of the cause—effect connection between ne-
gative environmental impact and social vulnerability. It
is urgent to find a balance between protecting the envi-
ronment and decreasing vulnerability, and meeting the
interests of companies; and it is important to try to iden-
tify, and transmit to every stakeholder involved, tools
and/or tactics to reduce poverty and decrease environ-
mental impact in a compatible way.
Despite the diversity of methods and tools for measur-
ing sustainability [24], the incorporation of this concept
in mainstream managerial practices has mainly come
forward through the so-called Eco-Modernization dis-
course [25], which acknowledges the need for more inte-
gration of environmental issues within corporate man-
agement strategy [26] and encourages companies to bal-
ance the ‘triple bottom line’ of economic, environmental
and social interests [27]. “Strong” eco-modernization
seeks not only to minimise the production of risks but also
to prevent their unfair externalisation in space and time
[28], thus highlighting social and political aspects which
are linked to the environmental conflict [29]. However,
insights into social strategies rarely go beyond a general
normative framework, indicating intervention areas, nor
do they go into detail about the development of specific
strategies and practices to practically enhance social sus-
tainability by applying economic and natural capital to
greater societal good [21].
Several studies have analysed some resources and ca-
pabilities on which environmental strategies can be built
to generate competitive advantages. We should highlight
organisational learning, continuous improvement, com-
plementarities between innovation capabilities and the in-
Copyright © 2011 SciRes. JEP
Adaptability, Entrepreneurship and Stakeholder Integration: Scenarios and Strategies for Environment and Vulnerability1377
tegration of stakeholders, among others [30-32]. However,
these works lack the necessary connection with corpo-
rate/business ethics and integration of local communities’
problems such as poverty and marginalization.
Since the UN ‘Millenium Development Goals’ put po-
verty at the centre stage of global agendas, there has been
growing pressure for a higher profile role of business in
the matter, tri ggerin g a variety of initiative s, some o f them
already existing i n companies long before poverty be ca me
a corporate challenge [33,34].
The dominant approach1 in dealing with social issues
in business is the concept of Corporate Social Responsi-
bility (CSR) which is defined as the voluntary inclusion
of environmental and social concerns—such as poverty-
within the companies’ transactions, and their interaction
with stakeholders [35]. However, many authors agree in
saying that the practical contribution of business initia-
tives to reduce poverty has so far been limited and has
only worked in particular circumstances [36]. In particu-
lar, CSR is not ready to develop solutions to poverty
basing itself on the resources and know-how of the com-
panies [37]. The cause for this is the reactive approach in
the search for social legitimacy, where the stronger the
pressure, the stronger the answer, which leads companies
to leave the control of their agenda in the hands of stake-
holders, such as NGOs that do not understand the com-
panies’ potential capacities. Furthermore, there is no gua-
rantee that the problems claimed by the more vehement
stakeholders are the most important ones, and there is a
risk of having a never-ending exercise of public relations
with minimum value for society and scarce benefit for
business [38]. To address these criticisms, an increasing
number of authors are working to develop a critical CSR
research agenda [39]. As a case in point, ‘the enabling
environment view of CSR’ proposed by [36] stresses the
need for a greater integration of community participation,
corporate willingness and governmental regulation. Al-
though this perspective is similar to the approach adopted
by our proposal, environmental issues do not yet play a
central role in “enabling environment CSR”. This despite
growing recognition that any effective long-term solution
to the problem of poverty must also provide solutions to
the problems of environmental degradation and depletion
of natural resources [40].
Consequently, the analysis of the problems of poverty
and environmental deterioration requires a holistic ap-
proach that considers the firm’s receptiveness to envi-
ronmental and social issues, and the stakeholders capa-
bilities to involve a wide range of stakeholders, such as
firms, government, communities, NGOs, etc. Recent works
are trying to address this gap [4,6,41] adopting theoretical
approaches on which to base further studies to improve
knowledge of this problem. However these studies have
been focused on the analysis of the problem. Following
these approaches, we present in the next section a theo-
retical proposal that, unlike these models, is oriented to
address business strategies adapted to different contexts
(according social vulnerability and environmental pro-
3. Theoretical Review
Having understood the nature of the problem, we are
required to analyze some key elements that may influ-
ence the relationship between the firm strategy, poverty
and environmental deterioration: Stakeholders Theory,
Entrepreneurship Theory and Adaptation Theory.
3.1. Stakeholders Theory
Stakeholder’s Theory proposes a reformulation of the
companies’ traditional objective of providing dividends
to its shareholders, and postulates that businesses must
meet all the interests of their stakeholder’s [42], de-
scribed as “the individuals and constituencies that con-
tribute, either voluntarily or involuntarily, to its wealth-
creating capacity and activities, and that are therefore its
potential beneficiaries and/or risk bearers” [43].
Despite extensive existing research, stakeholders’ lit-
erature shows a weakness in terms of applicating an in-
tegrating vision towards the analysis of environmental
and social issues [44]. Practical examples of the use of
the Stakeholders theory to propose holistic solutions re-
lated to p overty and environ mental deter io ration are scarce
(see for instance [22,45]. However, although at first sight
the literature on stakeholders shows a division between
the studies of poverty [46] and that of the environment
[47] a more careful analysis shows that they draw on the
same theoretical concepts and that they offer similar
methods for the implementation of social and environ-
mental strategies, whic h shows the utilit y of the theor y as
a general framework for integrating the examination of
such concepts.
We identify two aspects of stakeholder theory that are
particularly relevant to our analysis of scenarios and stra-
tegies to break the vicious circle poverty-environmental
deterioration: 1) varied and discrepant issues or interests;
2) normative approaches to develop moral “criteria” for
stakeholders management [43].
1[41] identify three businesses approaches to deal with poverty re-
duction: the donor model (i.e. philantropy), the legit imac y mod el (CSR)
emphasing “social licenses” and the market model which frames the
relationship between the companies and the poor as a business oppor-
tunity (i.e. Bottom of the Pyramid). See [41] for a more detailed dis-
cussion of these models and its limitations.
One interpretation of stakeholder theory is that any
firm will hav e a numbe r of e xplicit or i mplic it cla i ms fro m
its many stakeholders. Stakeholders with an “implicit con-
tract” will expect the firm to provide certain compensa-
Copyright © 2011 SciRes. JEP
Adaptability, Entrepreneurship and Stakeholder Integration: Scenarios and Strategies for Environment and Vulnerability 1378
tion for the “service” (benefit or contribution) they think
are providing to the firm (e.g., a “license” to use natural
or community resources). If these expectations are not
satisfied, these stakeholders may become litigious and
ensure—by legal or other means—that the firm fulfils its
duties, thus making the contract explicit. To avoid this,
the firm will attempt to meet its implicit claims on a vo-
luntary basis, usuall y designin g a corpo rate responsibility
programme [48]. Emphasising the importance of long-
term success, the stakeholder theory suggests that firms
cultivate relationships with their stakeholders and inte-
grate these relationships within a comprehensive man-
agement strategy. However, there are limits on financial
resources that are available for firms to meet sta keho l d e r s’
implicit claims. Implicit claim s grow rapidl y, particularl y
in developing countries, where CSR policies of MNCs
tend to fill huge voids in the welfare system. [49: p. 115]
argues that, “a companys responsibility often seems to
grow even wider in concentric circles, bringing greater
territory and increasing the tensions between what they
are obliged to account for and what stakeholders feel its
fair to take aim at”.
Identifying relevant stakeholders and their claims is a
first step in the design of collaborative strategies to break
“vicious circles”. It is not an easy task considering, how
flexible and dynamic, is the definition of stakeholders.
[50] includes the following groups as main stakeholders:
consumers, employees, managers, shareholders, board
members, suppliers, buyers, industry chambers, “business
club s”, trad e -uni on s, d ist rib uto r s, go ver nme nt o f fici al s, j u-
dges and courts , legisl ators, regu la tors, enforcemen t bodi es,
consultants, insurance companies, media, local communi-
ties, opinion-makers, the church, vulnerable groups (mi-
no r i ties , th e p o o r ) , N GOs and ci vil soci e ty.
Thus, it is very challenging for companies to produce
long-term social and economic benefits for all stake-
holders [51]. Not all stakeholders may attain benefits.
Moreover, some stakeholders, particularly vulnerable gr-
oups maybe negatively affected by corporate operations
[52]. Furthermore, the complexity is added by often con-
flicting interested between different stakeholder groups,
thus satisfying one stakeholder group may lead to dissat-
isfaction of the others. Whilst some [53] argue that bal-
ancing stakeholders’ interests is an unworkable objective,
others [54] suggest that firms should delineate a rank or
hierarchy of stakeholders based on a certain criteria. The
interests of stakeholders at the top of the hierarchy are
given priority over the rest. The criteria to organise such
hierarchy can have an instrumental focus (what hierarchy
of stakeholders maximises business benefits) or a norma-
tive/moral focus (what hierarchy of stakeholders’ is “in-
trinsically right and responds to the firms” moral values).
Such division between a normative and an instrumen-
tal focus on Stakeholder theory [42] caused that [43]
makes a difference between what they call the “Stake-
holder Management” and “The Management of Stake-
holder”. The Management of Stakeholder assumes that
the integration of stakeholders must be instrumental to
the specific interests of the company, and puts forward a
more “manipulative” strategy aimed at convincing or
“guiding” stakeholders to align themselves with the com-
pany [55]. Thus, according to [17] some stakeholder ac-
tivities such as stakeholder integration are morally neu-
tral practices, but are frequently applied to social and
environmental matters. Stakeholder Integration refers to
the ability to establish positive collaborative relationships
with a wide variety of stakeholders [31]. Stakeholder
integration includes the Knowledge of activities (of the
stakeholders, their needs and their demands), interaction
between stakeholders and companies, and the adaptation
behaviour of the firm to their stakeholders demands. The
emphasis is on strategies addressing the wants and needs
of those core stakeholders controlling critical resources,
information or access to social legitimacy by virtue of
their position in a network (employees, customers, local
community leaders, suppliers, authorities and investors).
On the other hand, stakeholder management is based
on a change in management philosophy that involves
new strategies addressing the needs of core and “non-
core stakeholders (i.e. the poor, vulnerable, isolated, di-
vergent, non-human) [43]. Aiming simultaneously at
current business success and long term survival of the
company, this approach has a moral motivation, based on
the rightful consideration and integration of stakeholder
interests into business decision making [56]. In turn Sus-
tainable Stakeholder Management is a moral approach
that emphasises that companies are part of wider eco-
logical and social systems, thus companies’ survival de-
pends on the development of harmonious relations with
nature and communities. Sustainable Stakeholder Man-
agement seeks tools to understand the roles that stake-
holders and companies must play in order to combine
traditional management goals with sustainable strategies.
Accordingly, sustainable stakeholders” management re-
defines traditional management tools and embeds ethical
values in tried and tested “morally neutral” business prac-
tices. For instance, “instrumental” stakeholders’ integra-
tion is replaced by “moral” stakeholders engagement.
Through the Sustainable Stakeholders Management
approach the firms may generate new knowledge and
innovative solutions [57,58] to complex issues such us
reduction of poverty and environmental deterioration.
Sustainable stakeholder management provides a “moral”
and “instrumental” solution to the issue of conflicting
stakeholder interests (or CSR domains). Following, [59]
When the interests of various stakeholder groups differ,
Copyright © 2011 SciRes. JEP
Adaptability, Entrepreneurship and Stakeholder Integration: Scenarios and Strategies for Environment and Vulnerability1379
the key to settling those discrepancies lies in identifying
which social and environmental approaches allow a bet-
ter use of a company’s resources and have a better set of
impacts on the interests of the different stakeholder grou-
ps—in our case on the interests of groups imprisoned in
environment-poverty traps. The focus has moved from
stakeholders’ claims to stakeholders’ needs and interests;
and from stakeholders’ management to new models of
interaction between firms and stakeholders. In order to
confront the problems of poverty and environmental de-
terioration, therefore, changes must take place implying
adaptation to new situations, from the point of view of
firms both and their stakeholders.
It follows that current challenges for sustainable stake-
holders management are: a) ho w to identify the needs of
stakeholders, b) how to elucidate what social and envi-
ronmental approaches will maximise the social and en-
vironmental impacts of a company’s resources and, c)
how can stakeholders and companies adapt to the new
roles they must pla y in order to combine traditional ma n-
agement goals with sustainable strategies for the reduc-
tion of poverty and environmental deterioration.
Our framework proposes that theories on adaptation
and ability to adapt, can help our understanding of strate-
gies addressing such complex challenges.
Adaptation and Ability to Adapt
Investigations in poverty and sustainability underline the
importance of the concepts of adaptation and ability to
adapt [7,60].
The concept of adaptation is different in natural sci-
ence and in social science and although adaptation can be
reinforced through adequate planning, it requires social
systems to have ability to adapt [61].
A social system’s capacity to adapt can be defined as
the ability to plan and implement adaptation processes, or,
more generally, as the capacity of a human system to mo-
dify itself in order to improve, or at least maintain, its
member’s quality of life against a range of disruptions
(present or future) in their physical or social environ-
A human systems’ capacity to adapt depends to a great
extent on coordinated collective and institutional actions
thro ugh whic h effi cienc y can be enha nced b y develo ping
social capital (mutual trust, social integration, commu-
nity ne t work, rule s, c onse nsus and info rmati o n flo w use d
by individuals both to their own benefit and that of the
community) [62]. Other factors are influential such as
income level, saving capacity, technology and infra-
structure, knowledge and abilities, equity, quality and
power of the institutions, access to credit, insurances and
Taking base on the works of [35,63,64] identified se-
ven aspects of adaptation capacity which, following sus-
tainability guidelines, relate to the different types of ca-
pital existing in the socio-economic planetary systems:
human, technological, environmental, man made, social,
financial, instit utional and nat ural [65]. Full develop ment
of all these adaptive capacities will empower vulnerable
stakeholders to emancipate from vicious circles of pov-
erty and environmental deterioration.
The role of the company in the development of these
dimensions of adaptive capability is clearly paramount,
and it becomes necessary, for example, to work towards
increasing the cooperation between global and local ap-
proaches; to offer wider information about the most vul-
nerable areas and groups [66]; to make investments aimed
at improving access to drinking water and sanitary infra-
structure [64]; to develop innovative approaches in order
to reinforce saving capacity and access to micro credits;
to invest in the development of technologies adapted to
natural resources, etc.
Thus, a “normative” criteria to stakeholders manage-
ment will demand two conditions in all firm-stakehold-
ers’ relations: “Doing no-harm implies that none of the
stakeholders see their adaptive capabilities harmed by the
firm’s actions. “Doing good requires preventing the
deterioration of stakeholders’ adaptive capabilities by im-
pacts outside of the companies [29].
So far, our framework has identified the central criteria
that sho uld guide stakehol ders’ mana gement t o assure its
moral goals. The problem is that good intentions and
aims are not always translated into successful strategies
and outcomes. Thus, we need a third pillar in our theo-
retical framework to help us conceptualise what condi-
tions are required if firms and communities to succeed in
the development of dimensions of adaptive capability.
We argue that a most important condition is entrepre-
Adaptation theories emphasise the central role of so-
cial capital and the importance of social entrepreneurs to
enhance social capital. In turn, as we will see in the next
section, entrepreneurship is the key to mobilise the stra-
tegies and alliances required to unleash adaptive capa-
bilities in firms and their stakeholders.
3.2. Entrepreneurship
Entrepreneurship is universally acknowledged as playing
a leading role in economic growth [12] and there is growing
evidence to suggest that there is a significant causal rela-
tions hip b etween e ntrep reneur ship, e cono mic gro wth and
poverty reduction [67].
Entreprene ursh ip is a promising field o f researc h which
has its framework in the relationship between opportuni ty
and the entrepreneur [68]. However, [69] pointed out that
the progress of this field has found prob lems of definition
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Adaptability, Entrepreneurship and Stakeholder Integration: Scenarios and Strategies for Environment and Vulnerability 1380
because researchers often try to analyse a phenomenon
that cannot properly be defined. As a result, much entre-
preneurship research is fragmentary and focuses nar-
rowly on particular aspects of entrepreneurship.
[70] suggest a continuum of entrepreneurial opportuni-
ties ranging from codified to tacit. They find that rela-
tively more codified opportunities are more likely to be
discovered through systematic searches, whereas more
tacit opportunities are more likely to be identified due to
prior experience. Collaboration with local communities
and stakeholders may help to acquire this tacit knowl-
edge [71]. T his knowled ge is the b asis of entre prene urial
opportunities that are context specific and are difficult to
imitate [70].
The economic exploitation of these opportunities may
reduce poverty problems [72]. Moreover, this knowledge
gives rise to greater corporate proactivity. Proactivity
recognised in the literature as an essential component of
entrepreneurship [73] has been closely linked to the de-
velopment of proactive environmental strategies [32]. It
has been claimed that Entrepreneurship reduces both
environmental degradation [74] and social problems [41].
Accordingly, reformulating a definition used by [74] to
include social aspects, sustainable entrepreneurship can
be defined as the process of discovery, evaluation and
exploitation of the economic opportunities present in the
market flaws which hinder sustainable development, in-
cluding those related to environmental and social issues.
Such a definition provides a theoretical link between
risk, vulnerability and entrepreneurial activity. [65] note
that for entrepreneurs to be able to exploit the opportuni-
ties arising form a shock, there must exist certain barriers
that prevent other (for instance, large firms) from making
use of those opportunities. [66] explain that, in vulner-
able social systems, such barriers are the lack of informa-
tion within large firms about the social systems in the
affected communities; perceptio n of ris k, capacity to adapt,
and social acceptation are key points to define the accep-
tance of a new product.
[41] recommends that the private sector contributes to
the development of entrepreneurs’ initiatives through
empowerment2, offering education and training, invest-
ing in basic services projects and facilitating access to
natural and financial resources (safe credits). [75] believe
that private companies interested in entering markets
where the poor are the majority, must constitute strategic
alliances with stakeholders who have access to the hu-
man and social capital of the vulnerable communities,
particularly NGOs or micro companies set up by local
entrepreneurs, but also SMEs and local authorities in
what is called the new “social compact”. Additionally,
[75] suggest that it is for the company to integrate envi-
ronmental issues within the framework of its alliances
and support for entrepreneurs.
A tendency of many managers to filter market signals
that imply a necessity for change, particularly in envi-
ronmental issues can negatively affect the performance
of alliances [77], hence, companies must at the same time
try to promote internal environmental entrepreneurship.
Likewise, political and institutional obstacles can frus-
trate the exploitation of opportunities, increasing transac-
tional costs (intermediaries, corruption, bureaucracy) and
also in this case, institutional entrepreneurs (technologie s
such as the “chemical digital fingerprint”, which provide
evidence of the originator of a communication, or law-
yers who can collectively represent all those affected by
an environmental catastrophe) or politicians (government
employees who can modify subsidy or tax systems) who
can influence the political and economic systems, are the
most adequate stakeholders to integrate within the com-
pani es ’ ma na ge me nt.
To sum up, the third contribution of this framework is
the necessary emphasis in promoting a sustainable entre-
preneurship as a link and lever between the companies and
their stakeholders within proactive managerial strategies.
4. Scenarios in Sustainable Relationships
In order to better understand a firm’s strategy on poverty
and the natural environment, we define a matrix to look
at different actuation scenarios in connection with two
axis. One Axis reflects the “Stakeholders” dimension of
our holistic framework (The company’s Stakeholders In-
tegration Focus). The second reflects the “Adaptation”
dimension of our framework (Engagement Capability of
Communities where the firms operates). These axis con-
dition the type of strategy adopted by the company and
their effect on sustainability. The Entrepreneurship di-
mension of our framework is intimately related to both
axis. Entrepreneurship is a driving force of engagement
capabilities but it is also an important influence in the
development of stakeholders i ntegration focus.
The Sustainable Stakeholders Integration Focus axis
contains the intensity and scope of the firm stakeholder’s
integration strategies a nd it also reflects t he intensity and
scope of the firms environmental and social intervention
strategies. The Engagement Capability of Communities
is measured by their adaptive capabilities and entrepre-
neurship skills along with the intensity and scope of the
relationships among them. Although both dimensions
may be a continuum, we adopt a simplified scheme that
classifies each of them in two categories: high and low.
The strategies associated with each possible scenario would
2Empowerment: ability of people, in particular the least privileged to a)
have access to productive resources that enable them to increase thei
earnings and obtain the goods and services they need, b) participate in
the development process and the decisions that affect them, c) have
access to info r m ation [76].
Copyright © 2011 SciRes. JEP
Adaptability, Entrepreneurship and Stakeholder Integration: Scenarios and Strategies for Environment and Vulnerability
Copyright © 2011 SciRes. JEP
be Monitoring Strategies, Defensive Strategies, Mentorship
st rateg ies and Integ r ation str ateg ies (see Figure 2).
Monitoring Strategies: These emerge when a co mpany
lacks the capacity or interest for implementing sustain-
able stakeholders management, and the stakeholders do
not set up alliances, or lack entrepreneurship and any ca-
pacity to adapt to improve environmental and social con-
In this context, the effectiveness of voluntary actions
in solving complex social problems is limited. There is
no communication, the company does not understand or
does not want to understand the justification or legiti-
macy of stakeholders’ claims, and lack the ability to
make their necessities heard. This is the case of the so
called “marginalized stakeholders” [78] describing the
Australians aborigines’’ attempts to prevent their land
fro m bei ng u sed for mini ng. [79 ] a rgues t hat the inab ili t y
to act arises from a lack of mobilization structures, that is,
a lack of adaptive and entrepreneurship capabilities.
Defensive Strategies: When a company does not have
a focus on the integration of community stakeholders, but
communities have high levels of adaptive capabilities
and entrepreneurship, the company’s strategy will respond
to the intensity of pressure exerted by communities, and
the resulting scenario will be one where the main efforts
go towards issues related to those community stake-
holders with stronger power over the company. Since
there are multiple stakeholders with multiple interests,
whom interests prevail will depend on the relationships
of power and influence strategies [38]. Not taking stake-
holder demands into account and considerations at an
early stage may cause problems regarding a lack of in-
formation. On the one hand, a firm may miss possible
opportunities, and on the other side, certain drawbacks
(e.g. possible environmental problems) may not become
apparent until the negative consequences have appeared
and the cost of solving them is very high.
The case of the mining company Meridian Gold in the
locality of Esquel (Argentina) had far more adverse con-
sequences for the firm. Meridian Gold had neither strate-
gies nor any willingness to integrate their stakeholders or
to adapt their practices to address the community’s con-
cerns about the use of cyanide in the mines. However,
they confronted a community which was well organised
and educated, with high social and human capital built
around a local economy based on activities other than
mining (agriculture, tourism, services). As a result, not
only did the firm have to leave the country, but also the
use of cyanide in mining was legally prohibited in the
The limited effort in stakeholder integration may also
result in missing tacit entrepreneurship opportunities [70].
Although the stakeholder integration initiative is usually
based on the enterprise level, some firms may be sur-
Figure 2. Strategies for the firm.
Adaptability, Entrepreneurship and Stakeholder Integration: Scenarios and Strategies for Environment and Vulnerability 1382
prised by stakeholder collaboration and cooperation that
result in the creation of news firms to exploit these op-
portunities (e.g. the microcredits and the development of
the Grameen Bank). In early stages the new firms are not
operating in the same market as existing enterprises, but
these new firms may evolve and become serious com-
Mentorship Strategies: If the firm is strong in its sus-
tainable stakeholder integration focus, but the communi-
ties are weak in adaptation capacity and entrepreneurship,
the company will be capable to guarantee the stake-
holders’ integration in the dialogue, but the stakeholders
will not be able to fully benefit from such integration.
The company has to use its capacity to strengthen the
stakeholders through tangible and intangible capital, trai-
ning, foundations, and maybe product stewardship with
local suppliers and also through an active search for stake-
holders q uali fied to co ntrib ute to this ta sk ( NGO s, U n i v e r -
sities, and commercial associates). In these cases, the
firm has the initiative to enga ge local co mmunities which
may benefit from an improvement in their social out-
comes (public health, emergency relief…) and the firm
may as a result acquire some benefits such us improving
risk management, increasing social legitimacy and better
employee attractiveness [80]. However, there is a danger
of developing a dependency of the firm resource and that
the areas of improvement are mainly firm oriented.
The selection of practices will be based on necessity/
legitimacy interpretation internal criteria, and it is possi-
ble that, initially, the efforts aimed at improving the en-
vironmental impact will be more developed, due to the
positive effect over performance (for example in produc-
tion), because the company can more clearly see the ef-
fect over performance on environmental initiatives than
on initiatives linked to social vulnerability.
A successful example of mentorship strategy is the al-
liance established by British Petroleum (BP) with three
micro-credit companies in India for the distribution of a
portable oven which uses both liquid fuel and biomass.
The innovative device responded to a need of poor com-
munities to switch to bio -mass in economic scarcit y, while
avoiding toxic fumes release. BP was responsible for in-
troducing environmental, hygiene and security standards
as non negotiable requirements, while at the same time
providing the necessary training to their local partners
through a partnership with community’s NGOs. The mi-
cro-credit companies on the other hand, once empowered
by training, maximised their ability to bring in the part-
nership their knowledge of local needs and resources, in
turn enabling BP to design suitable solutions and make
the product available to isolated rural communities [75].
Integration Strategies: If the capacities of both compa-
nies and communities are strong, the conditions exist for
a society with full integration of community stakeholders
within a firm, and with the firm acting as just another
stakeholder for solving complex social problems, using
its experience and knowledge to develop entrepreneurial
projects with local stakeholders and to invest in sustain-
able entrepreneurs or the acquisition of natural capital.
When more powerful community stakeholders form
coalitions, there is a risk of marginalizing those who are
more vulnerable or who remain excluded from the coali-
tion. In this case, the company must carefully organise
mechanisms to adequately search consensus in order to
minimize the effects of relationships of power and influ-
ence strategies and, at the same time, try to strengthen
the weaker or marginalised stakeholders. Under these cir-
cumstances, there is a possibility of attaining a balanced
intervention strategy that proposes integral solutions for
social vulnerability or environmental impact combining
the capacities of all the involved stakeholders.
These type of strategies may result in stable joint be-
nefits to firms and communities. The main benefit is
usually a shared accountability of the problem and shared
vision of solutions, but sometimes it is possible to trans-
form the problem domain itself or to generate new
knowledge resulting in new product development or effi-
ciency improvements [58,80].
[14] shows the success of an ecotourism initiative to
protect the environment and preserve the livelihood of
local communities: The Shark Reef Marine Reserve in
Fiji. It involves the local communities and all relevant
stakeholders in an area where marine rights are finely
subdivided into small units. The local villages have ex-
changed their traditional fishing rights in the marine re-
serve for a new source of income through diver user fees.
The strategies outlined in the previous paragraphs are not
static; on the contrary, they could be seen as phases of a
process in which the integration strategy represents the
result of sustainable development. The continuity of this
process requires education and training of companies and
stakeholders in order to understand the importance of
promoting entrepreneurship, reinforcing adaptation ca-
pacities and working towards the integration of stake-
holders, aimed at searching consensus.
5. Discussions and Policy Recommendations
More vulnerable sectors, although underprivileged, are
not unimportant for firms; quite the opposite: They some-
times become key allies for the success of numerous ini-
tiatives [22]. Our first recommendation is aimed at guar-
anteeing the participation of all the stakeholders. We
introduce so me general considerations in ord er to increase
the integration of this non financial stakeholder (employ-
ees, supplies, customers, communities):
Promoting engagement and mutual knowledge be-
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Adaptability, Entrepreneurship and Stakeholder Integration: Scenarios and Strategies for Environment and Vulnerability1383
tween firms and stakeholders (especially commu-
nity stakeholders, those more underprivileged and
Promoting the use of dialogue and communication
tools between the main agents responsible for envi-
ronmental pollution and those groups who are espe-
cially vulnerable.
Improving the capacity to implement activities and/
or projects in those areas that are more vulnerable to
environmental impacts and to adverse socio eco-
nomic condi tio ns.
Setting up adaptation mechanisms for both firms
and stakeholders, in an attempt to reconcile their
interests and objectives in the short and in the long
Including the promotion of sustainable entrepre-
neurship within an organization and in the social
and institutional context as a part of the strategic vi-
sion of the firm’s sustainability. Sustainable entre-
preneurs are seen here as leverage for the develop-
ment of proactive company strategies.
Secondly, a company must identify issues of interven-
tion while managing the multiple and, occasionally,
“quasi” incompatible demands of different stakeholders
[42]. As mentioned above, there are certain strategies
which intend to manage the negative impacts of the firm
(doing no harm) and other strategies destined to solve
generic problems which are not created by the firm (do-
ing good).
Our suggestion is that the “No harm approaches must
change so as to follow the precautionary principle and
not carry out activities unless it is guaranteed that they
will not cause harm, instead of reactively discontinuing
activities only when it becomes scientificall y proven that
some harm has been caused. On the other hand, “Doing
Good” strategies ought to be selected on three successive
criteria to increase their effectiveness:
Contribution to the reinforcement of social cohe-
Better “fit” with the organizational culture.
Selection of those strategies that make a more effi-
cient use of the companies’ resources.
The criteria of “fitting in with the organization’s cul-
ture” and of a more efficient use of the company’s re-
sources, lead us to suggest that a higher effectiveness of
voluntary actions would be reached by focusing the
company’s voluntary intervention on the market model
and, in particular, in the formation of alliances with
stakeholders and the creation of new markets through
supporting entrepreneurs, both within the company and
in the social systems where social and environmental
vulnerability prevail3 [41] In this sense, we mention
some gener al recommendations:
a) To mini mize the co mpany’s nega tive impacts while
selecting areas for intervention, in order to provide solu-
tions whereby the company can maximize the use of its
available resources, organizational capacity and exper-
b) To build relationships with local stakeholders, and
integrate local and global stakeholders in the firm’s deci-
sions and strategies.
c) To improve channels of communication and to im-
plement innovative mechanisms aiming at a democratic
search of consensus among stakeholders4.
d) To improve the quality of investments generating
added value in the country without affecting the envi-
e) To develop new Technologies and practices that
adapt to the resources available for the more vulnerable,
and to move from the provision of goods to the provision
of services [82].
f) To cooperate in the diffusion of sustainabilit y values,
offering information and practical i mplementation guide-
lines for those stakeholders identified as priority either
because of their vulnerability or because of their capacity
of leverage .
g) To integrate local entrepreneurs in the above strate-
gies, and to encourage processes of sustainable entrepre-
neurship within the companies and in economically and
socially vulnerable communities.
Mechanisms and enforcement of compliance with
compromises, comparabilit y in the infor mation, and stan-
dards and implementation of mechanisms for the access
of the least powerful stakeholders to deliberation. This
requires the firm to have a clear vision and politics, de-
veloping standards and systems of environmental and
social performance monitoring and specific leadership,
organization and dialogue capacities.
Likewise, all the stakeholders and, in particular, the
most vulnerable ones, along with NGOs, must have a
capability of adaptation to join into dialogue with the
company [83]. In this context, adaptation capability is
redefined as the “ability of the social actor to comple-
ment, and utilize the expertise of, th e company in pursuit
of the partnership goals” [13,84].
All of the above reinforces the idea that stakeholder
management, beyond any rhetorical considerations, is a
3We do not exclude that the company can at the same time profit
th rough th ese in terven ti ons, but th e point i s that th e main goa l must not
be economic or Pub lic Relations p r ofit.
4An example of this can be the use of the Delphi methodology, which
was designed in the first instance to overcome the difficulties found
with traditional forms of consensus through conduct of a round table
discussion [81]. Within Delphi, consensus can be sought through send-
ing a quant itat ive an alysis of th e resu lts back to resp ondent s and a sking
thos e respondents who give an an swer ou tside of the mean res ponse to
either change their forecast estimation, or to provide justification for
their stance.
Copyright © 2011 SciRes. JEP
Adaptability, Entrepreneurship and Stakeholder Integration: Scenarios and Strategies for Environment and Vulnerability 1384
necessary element for the long-term survival of organisa-
tions, even more so in situations in which poverty and
environmental degradation are pressing problems. Nev-
ertheless, there is a long way to go in this respect, since
many firms focus on visible aspects of Stakeholder Ma-
nagement and CSR rather than on the true impact of their
actions on society.
The model of micro-credits which has been success-
fully implanted (initially in poorer countries and later all
over the world) is a good example of the possibilities that
entrepreneurship and stakeholder management offer to
solve the problem of poverty. However, it is not enough
to develop corporative citizen behavior
However, in order to maximize the results of the stake-
holders management, the company must create a delib-
erative environment where there is transparency in the
discourse, monitoring which implies progressing from
doing no harm” to “doing good [85]. There is a need
for the explicit inclusion of protection of the natural en-
vironment in which corporate activity is developed to
enable the long-term sustainability of socio-economic
systems. On the one hand this may mean a restriction in
the areas of activity in which collaboration is possible,
but it also opens up business possibilities, since the resi-
dues of one firm may provide the main input for another
one. This occurs, for example in the systems of industrial
ecology which have been implanted in developed econo-
mies [86].
As [15] points out, the change of economic models to
escape poverty can only come about with a change in the
mindset of the agents involved to accept and take on
board these values. Likewise, these aspects can be ex-
trapolated to the relationship between poverty and envi-
ronment [35].
6. Conclusions
Poverty and the natural environment have a two-way re-
lationship. On the one hand, natural environment affects
poverty situations in three ways: by providing sources of
livelihoods to poor people, by affecting their health and
by influencing their vulnerability [19]. On the other hand,
poverty may also induce societies to downgrade the na-
tural environmental in various ways: forcing poor people
to degrade environment, encouraging countries to pro-
mote economic growth at the expense of environment,
and stealing resources from the protection of the natural
environmental [2,87].
The stakeholder theory is the umbrella under which we
develop strategies to break this vicio us circle. Firm’s strate-
gies promoting integration and engagement of stakeholders,
especially local communities, can help to overcome this
situation. However, the success of the strategies depends
also on the existence of stakeholder adaptation capability
and entrepreneurship. The combinations of these ele-
ments in a double entrance matrix configure four differ-
ent scenarios. Each scenario is defined by a specific type
of corporate strategy: Monitoring, Defensive, Mentorship
and Integration Strategies. The latter represent the only
scenario where synergies between community and com-
pany can be unleashed and applied to destroy vicious
circles poverty-environmental deterioration.
This inspires some of our recommendations (and com-
mentaries): a smart mix of “doing no harm” and “doing
good” criteria to be applied as guidance to reinforce the
adaptive capabilities of firms and stakeholders; invest-
ment in company initiatives promoting entrepreneurship
in a variety of forms (in the company, in society, in re-
search) and investments to develop stakeholders en-
gagement skills within the company but also in the com-
7. Acknowledgements
The present paper is part of the theoretical development
made within the International Investigation Pr oj ect called
“Environmental impact of companies, social vulnerabil-
ity and poverty in Latin America: Interaction analysis
and diagnosis of areas potentially at risk”, financed by
the Spanish Agency of International Cooperation (AECI)
(reference A/017735/08). This work has been partially
funded by the Spanish Ministry of Science and Education
and the European Fund for Regional Development (ref-
erence ECO2008-03445/ECO).
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