Over the past decade convergent trends gutted the mainstream news media (or MSM) in the OECD countries, and set the stage for an unexpected competitor. Concentration of ownership fed the rise of politically biased media networks, whose claims of fairness and balance merely convinced a majority of the public that no news media are fully credible. Simultaneously, downsizing sharply reduced the human capacity of the industry, leaving a content hole that was filled by PR. The public looked elsewhere: Broadband Internet and social media enabled news consumers to follow the influencers most aligned with their values and to view the content that resonates most with them.  Much of that content, and the power over opinion and response that goes with it, now belongs to “stakeholder media”.

Stakeholder media comprise channels and formats controlled by communities of practice and interest – brand communities, user forums, activist websites, and many others. They may include Facebook pages or Twitter feeds, but they are hardly about being “liked.” These media exist in order to inform, defend and advance the objectives of particular groups, and to exert influence on organisations, in particular governments and firms. Our new papers in California Management Review and The Journal of Business Ethics demonstrate how they achieve those goals.

The power of stakeholder media

We show that media controlled by NGOs like Greenpeace, responsible shareholders, user forums, corporate employees and watchdog websites can cement coalitions that support, disrupt or even cripple management strategies, whether or not mainstream media are paying attention. The key to our work is system dynamics – a tool used to study how different forces combine in unexpected ways over time to impact the outcomes of management strategies.

In one of our new papers, we followed the protests of ecologists over Arctic drilling, as they built de facto coalitions with workers at BP. The result can be compared to a gigantic trap, which tightened progressively on BP even before a series of catastrophic accidents shattered the firm’s reputation. In the nother, we compared three cases of corporate crises drawn from our work over the past decade, and found that they participate in a common system of stakeholder interaction. We modelled that system – a first step toward predicting how specific crises may develop, and how they might be better managed.

There is an irony in our work, because we are conceptualising and mapping phenomena that were hiding in plain sight. The Internet began as a community of government-funded university researchers, and its growth was fuelled by the creation and expansion of stakeholder communities since 1992, when a user group for reporters, the “J-Forum”, appeared on Compuserve. Nor is the Internet the only channel for stakeholder communities to exercise influence through media. The explosive rise in the US of Christian broadcasting, the precursor of Fox News, began in the 1970s, in parallel with the development of direct mail as a conservative political marketing tool. The history of media is replete with actors who built their own channels to get their messages past the dominant powers of their time.

The end of MSM hegemony

Yet until midway through the past decade, the “hegemony” of large media groups over the public agenda was taken as a given by many scholars, organisational leaders and activists. They were right, to a certain extent. The research on agenda-setting showed that most people thought about what “the media” told them to think about, though they did not always think exactly what the media told them they ought to think. Research on social movements confirmed that activists focused on gaining traction through mainstream media coverage. Other media, it seemed, didn’t matter. The rare scholars who said they did were rarely followed, so far as the literature can tell us – at least, not until threads from stakeholder theory, social movement theory and agenda-setting theory began to coalesce into a new stream, of which we are part.

At the end of the 1990s stakeholder theorists observed that stakeholders used their own media to influence management and other stakeholders. Around that time we observed that France’s extreme right movement, the National Front, had built its own media channels after the mainstream media (MSM) shut the movement out, and continued growing. In 2006-8, our INSEAD case study of a boycott that targeted Danone SA found that financial analyst newsletters battered the company’s market capitalisation in a moment of MSM indifference. If the MSM really determined what people pay attention to, such phenomena could not have occurred. Contemporary organisational leaders must never forget that their stakeholders, from employees to end users, have the means to make their voices heard, whether or not the mainstream media notice them.

Stakeholder media are also business allies

We found other cases, including happy ones. Reverend Musical Instruments, a small firm that we studied in the highly competitive, multi-billion dollar electric guitar market, would have vanished if its customers had not spontaneously used online forums to promote its products and counsel newcomers. Likewise, we saw that recent scholarship unpacked how the nascent wind power industry was supported for decades by homegrown media that the MSM disdained to notice. Most exciting, our recent case studies indicate that stakeholder media play a vital role in creating shared value, by linking values-based enterprises to their suppliers and their customers in virtuous circles.

Our work also offers hope to the news industry – or at least, the part of the industry that sees its audience as active allies, instead of mere customers or competitors. Even now, news professionals sometimes express outright disdain for stakeholder media makers who cannot afford or do not accept professional ethics or production values. This is a grave mistake: The news industry wasted years deriding bloggers as amateurs, before it began hiring them in hopes of regaining lost audiences. We see stakeholder media as a “disruptive news technology”, resetting ethical and professional standards, and also as a crucial partner for news media. We are exploring how such collaboration might work in case studies and working papers on new business models, in collaboration with WAN-IFRA (the world association of newspapers) and the Aga Khan University.   

The Stakeholder Media Project would not have been possible without Johnson & Johnson, who largely funded our most fundamental research. That was visionary, because our research does not fit easily into the marketing categories that dominate media studies at any business school. Our current research focuses on how an online forum inflicted $US 500 million in damages on a unit of a multinational firm. Our agenda here is to precisely map the network of information and influence that feeds to and from a central stakeholder media – taking us a step closer to the day when we can help organisational leaders avoid crises, rather than running after them. We welcome inquiries from organisations and individuals who want to work with us.     

Luk Van Wassenhove is a Professor of Technology and Operations Management and The Henry Ford Chaired Professor of Manufacturing at INSEAD. He also directs the Management in the Humanitarian Sector programme, part of INSEAD’s portfolio of executive education programmes.

Mark Lee Hunter is an Adjunct Professor and Senior Research Fellow at the INSEAD Social Innovation Centre, where he is a founding member of the Stakeholder Media Project.
 

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