Social protest action, stakeholder management, and risk: Managing the impact of service delivery protests in South Africa

• Published date: 01 September 2023
• Author: Albert Wöcke,Robert Grosse,Morris Mthombeni,Stefan Pfeffer
• Date: 01 September 2023
• DOI: http://doi.org/10.1111/basr.12327

ORIGINAL ARTICLE

Social protest action, stakeholder management,

and risk: Managing the impact of service

delivery protests in South Africa

Albert Wöcke

1

| Robert Grosse

2

| Morris Mthombeni

1

|

Stefan Pfeffer

1

1

Gordon Institute of Business Science,

University of Pretoria, Sandton,

South Africa

2

Thunderbird School of Global

Management, Arizona State University,

Phoenix, Arizona, USA

Correspondence

Albert Wöcke, Gordon Institute of

Business Science, University of Pretoria,

PO Box 787602, Sandton 2146,

South Africa.

Email: wockea@gibs.co.za

Abstract

Stakeholder management is an important method for

reducing business risk. Recent decades have seen the

growth of a new type of stakeholder: social protest stake-

holders, individuals engaging in protest action which is

directed at other unrelated parties, often the govern-

ment. However, the actionsof social protest stakeholders

may negatively affect companies located nearby. This

stakeholder category has not received any formal atten-

tion in the literature, and this article addresses the

knowledge gap by exploring the effects of community-

driven protest action in South Africa and the strategies

that firms adopt to mitigate the negative consequences

of such protests. A multiple case study analysis was used

to describe this type of stakeholder group and the man-

agement of the consequences of social protest action.

Eight manufacturing companies in the Gauteng prov-

ince participated in the study, the companies varied in

size and industry. Among the key findings are that com-

panies need to be highly adaptable if they are to mitigate

the impact of protest action. We make practical sugges-

tions about how companies may manage these risks,

including the recommendation that companies engage

Received: 26 July 2021 Accepted: 7 July 2023

DOI: 10.1111/basr.12327

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits

use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or

adaptations are made.

© 2023 The Authors. Business and Albert P. Viragh Institute for Ethics in Business at Duquesne University.

436 Bus Soc Rev. 2023;128:436–458.

wileyonlinelibrary.com/journal/basr

more directly with social protestors to manage risks. The

study makes an important contribution to the literature

by identifying an additional key category of stakeholder

and proposing a risk management approach to avert or

minimize loss and damage.

KEYWORDS

protest risk management, service delivery protests, social

protests, stakeholder management

1|INTRODUCTION

Stakeholder management (SM) is a management approach that requires an understanding of

how different types of stakeholders influence companies and organizations and, on the basis of

this knowledge, enhancing relations with those stakeholders (Pedrini & Ferri, 2019). SM focuses

on the methods that companies and organizations use to build and sustain relationships with

groups of people who have an interest in their activities and can influence their operations,

such as shareholders, employees, customers, labor unions, environmental protection groups,

governments, and local communities (Kline & McDermott, 2019).

Many companies regard the management of stakeholders as an important business function,

with a number of scholars (e.g., Kolk & Pinkse, 2007) highlighting the benefits of sophisticated

SM processes and strategies. In some quarters, SM is seen as the systematic process of building

relationships with various stakeholder groups and integrating their needs and expectations into

the company's business strategy (Pedrini & Ferri, 2019). Some studies (e.g., Godfrey et al., 2009)

have examined how the effective adoption of SM can reduce a company's risk, especially given

that a core component of the SM approach is the identification of stakeholders and their strate-

gic importance to the company. There are two main approaches to stakeholder management,

the instrumental approach and the normative approach. The instrumental approach is used

when the company engages with stakeholders for the financial benefit of the company or to

reduce risk of disruption of commercial activities. The normative approach to stakeholder man-

agement is more concerned with social responsibility and ethical stakeholder management.

This approach is underpinned by the view that moral/ethical SM practices protect a company's

reputation and shareholder wealth. However, the normative approach makes it somewhat more

difficult to identify which secondary stakeholders to manage. Preble (2005) suggests that stake-

holders are important if they have a moral interest in the company's activities, and/or the power

to influence the company's behavior and performance, and/or a legitimate claim for swift action

to be taken by the company. A moral interest could include the impact of the company's activi-

ties on the environment or fair labor practices.

But what about individuals and groups that do not have an interest in the company's activi-

ties, such as protestors engaged in disruptive actions against government or a part of society?

Individuals and groups involved in social protest actions sometimes create collateral damage to

the operations of companies who have a negligible relation to the target of these protests. In

many cases, the affected companies may even sympathize or support the cause of the social pro-

testors. The phenomenon of protestors involved in social protests creates problems for stake-

holder theory and stakeholder management. There is no universally accepted definition of a

WÖCKE ET AL.437