Stakeholder management practices at Mondi South Africa : a case of the forestry division

Abstract

All over the world, there is a growing conviction that business relationships, particularly with communities, lead to financial performance and increased shareholder value creation. In South Africa, large corporations in sectors such as mining, agriculture and forestry quickly found themselves having to define their relationships with stakeholders other than their shareholders. Furthermore, those corporates with large land holdings had to deal with the uncertainty of land claims implemented by the government after 1994 which immediately transformed communities into influential stakeholders. Consequently, critical stakeholder issues, particularly in relation to social stakeholders who are non market in nature both in theory and practice are now at the forefront of corporate relationships. This study investigated and reviewed various stakeholder management practices currently employed by Mondi SA, (Forestry Division) a JSE-listed company operating in South Africa. The study further explored the various aspects of stakeholder relationships for Mondi in order to establish if these practices have any influence on Mondi’s growth and business stability. The study examined Mondi's stakeholder engagement practices and their integration into business strategy by applying both quantitative and qualitative research methods in a mixed-method approach, using non-probability purposive sampling. Using a sample of 42 respondents, representing a population of 265 employees, the study used both quantitative and qualitative approaches. The study further explored how stakeholder management, as a strategy contributes to business stability for the Forestry division. The data was analysed using SPSS for quantitative inquiry and Nvivo for the qualitative element. Stakeholder theories and management have been applied in the interpretation and analysis of this research. Critical theories of systems and organisational thinking have been used to analyse stakeholder management practice and its dynamics of power between Mondi and stakeholders, with reference to communities. The study established that Mondi’s stakeholder management practices are implemented from a risk mitigation point of view. With stakeholder engagements and socio-economic projects delivered to stakeholder communities, the findings also suggest that the practice is intentional, and planned. The results, therefore, confirm that Mondi Forestry’s stakeholder management practice is strategically managed to maintain industrial peace to ensure that operations are not affected. In addition, the stakeholder management practice is necessary to maintain compliance which also influences the smooth running of the operations within legal and industry standards. Arguing from the standpoint of the various studies that have explored the challenges and benefits of stakeholder influence in business, this research empirically investigated whether stakeholder management and engagement influences business performance and stability in South Africa, using Mondi Forestry division as a pilot.