The problem of imposing risk and the procedural dimension of stakeholder management

Abstract

The case Caprica Energy and Its Choices concerns a fictionalized energy corporation choosing between three potential drilling sites. According to the published Teaching Note, the case is an exercise in the stakeholder approach to business: it requires balancing profit considerations with potential harm to those who live near those drilling sites. Though unintended, the case raises a further question not addressed in the case or in the Teaching Note: what gives Caprica Energy the right to impose risk on members of the communities surrounding its drilling sites? The first section of the present article argues that, in such cases, management can only justify imposing risk on the local community by securing those stakeholders' consent. The second section outlines the implications for stakeholder theory and stakeholder management. The third section outlines one connection between this material and recent literature on the imposition of risk and moral theory; that section offers an account of what make this particular instance of imposing risk morally problematic, with reference to the directedness of the imposition. 414 | COHEN