Abstract

Due to increasing stakeholder activism, several firms have recently been driven into a conflict with stakeholders resulting in unexpected consequences. Based on an in-depth case study of a conflict between a forest industry company and environmental activist groups, we develop a framework for analysing the emergence and consequences of a stakeholder conflict. We argue that a conflict ina stakeholder relationship effects not only to this particular stakeholder relationship, but it also evokes dynamic changes in the stakeholder network of the firm including the emergence of new pressuring stakeholders, the complication of the original conflicting issue, and the emergence of new conflicts in the stakeholder network. We contend that the network effects of stakeholder conflictescalation are particularly critical issue in the relationships with activist groups and other “secondary” stakeholders