Robert Edward Freeman, a leading figure in stakeholder theory and a professor at the University of Virginia, has urged the Adani Group to take a deliberate and inclusive approach in redeveloping Mumbai’s Dharavi, Asia’s largest slum. He believes that engaging with all stakeholders, including those with dissenting views, is crucial for achieving a mutually beneficial outcome.
Freeman, often referred to as the ‘father of stakeholder theory,’ emphasizes that redeveloping Dharavi will be a lengthy process. He cautions against rushing the project, as it could lead to a win-lose scenario where some parties are left disadvantaged. Drawing on his experience with the redevelopment of Jakarta’s largest slum, he predicts that building consensus and gaining the support of all stakeholders could take at least 10 years.
He suggests replacing the Adani Group’s stakeholder survey process with in-depth interviews. These interviews should aim to uncover the residents’ needs and aspirations for the project. He highlights the success of a project in Indonesia, documented in his book, where a business family dedicated 10 years to engaging with local residents to address a dengue fever outbreak. Through over 10,000 interviews, the family gained understanding and trust, ultimately leading to an 80% reduction in dengue cases.
While acknowledging the complexities of the Dharavi situation, Freeman insists that meaningful engagement from the start is essential. He argues that imposing development plans without genuine stakeholder input, as seen in China, is incompatible with democratic principles. He emphasizes that a successful redevelopment strategy requires a long-term perspective and a collaborative approach.
Freeman also delves into the challenges faced by businesses in India in terms of employee retention. He attributes high attrition rates in the banking, financial, and insurance (BFSI) sector to a lack of employee autonomy, purpose, and mastery. He believes that a good boss fosters these three elements, enabling employees to feel a sense of purpose and ownership in their work.
Freeman’s insights highlight the importance of prioritizing all stakeholders, not just shareholders, in today’s business landscape. He argues that businesses must go beyond profit-maximization and consider the broader impact of their actions on employees, suppliers, the community, and the environment. He emphasizes the need for creative solutions and a willingness to engage with all stakeholders in a respectful and meaningful way.
He stresses that stakeholder theory, while not a guaranteed solution, offers a more ethical and sustainable approach to business decision-making. He advocates for considering the well-being of all those affected by a project, rather than solely focusing on maximizing profits.
Freeman’s message is particularly relevant in the context of Dharavi, where a delicate balance must be struck between development and the rights of the community. By fostering genuine engagement and dialogue, the Adani Group can potentially achieve a successful and equitable redevelopment that benefits both the community and the investors.
Freeman’s commitment to stakeholder theory and his experience in tackling complex development challenges offer valuable lessons for businesses seeking to operate responsibly and sustainably in an increasingly interconnected world.
