Applications of Stakeholder Theory in Information Systems and Technology

Abstract

Stakeholder theory has its origins in management literature. Preston (1999) traces the notion of stakeholders back to the great depression in the United States (1929-1941), when the General Electric company defined four major stakeholder groups - shareholders, employees, customers, and the general public. Stakeholder management has become an important tool to transfer ethics to management practice and strategy. Few management topics have generated more debate in recent decades than the underlying notion, the model and the theories surrounding stakeholders (Donaldson and Preston, 1995; Gibson, 2000; Wolfe and Putler, 2002; Friedman and Miles, 2006). The visual power of the stakeholder model and its high simplicity are seen as contributors to the success of the stakeholder concept (Fassin, 2008). An increasing interrelation is observed between the concepts of stakeholder theory, corporate responsibility, and business ethics (Valor, 2005; Garriga et al., 2004). The stakeholder approach in the organization integrates stakeholder relationships within a company's resource base, industry setting, and socio-political arena into a single analytical framework (Susniene & Sargunas, 2009). Mumford (1979) is one of the early researchers in supporting the involvement of end-users as a component of effective information systems development and implementation, using essentially the stakeholder concept in this domain. It has been proved that end-users and managers are very important towards successful system implementation. As more interorganizational information systems are developed which usually involve strategic decisions, a yet wider range of stakeholders needs to be involved (Pouloudi, 1999). In these systems the attention may switch from end-users and focus on those parties that are external to the organization, but who can also be associated in decision making at a managerial or strategic level (Pouloudi & Whitely, 1997). One of the most thorough investigations of the stakeholder concept in information systems research that relates information systems stakeholders with implementation failure was made as an early work by Lyytinen and Hirschheim (1987, 1988). They argue that failure is conditional on the capability of information system to meet the expectations of different stakeholders - i.e. to say an information system may be considered successful by some stakeholder but a failure by others. The concept of stakeholder represents a progression from developer - and user - centered problems to organization-wide and inter organizational information system problems. This is a sign of maturity of information systems research to show how holistic representation of the parties involved in the more complex systems currently developed (Pouloudi, 1999). Stakeholder theory proposes an ethical use of stakeholder concept in Information systems as ethical considerations and professional conduct is a significant issue in information system. The stakeholder theory is extensively used in management in investigating organizational ambiance, strategic management, ethical concerns, business planning process, e-government, project management, environment management, etc. Recently stakeholders are also seen as means to more successful information and communication technologies and information system development and implementation issues. The paper presents stakeholder theory, its origin and applications in Information Systems (IS) field in the literature. The main objective of this research is to build up the knowledge body of stakeholder applications in information systems and technology areas.