Framing Dynamically Changing Firm–Stakeholder Relationships in an International Dispute Over a Foreign Investment

Abstract

Stakeholder literature tends to presume that effective stakeholder dialogue, occurring directly or indirectly, among a focal firm, local communities, governments, and nongovernmental organizations (NGOs) is desirable for successful firm–stakeholder relationships. Even if theoretically desirable, effective dialogue does not always occur. There are two key theory-informing lessons in Botnia’s Fray Bentos successful green field pulp mill investment and start-up in Western Uruguay. First, critics could not halt the project politically supported by Uruguay in an expanding multi-party international dispute. Second, the Botnia corporate communications process did not succeed in building consensus relationships, and attention was not paid to discourse creating shared meanings among all stakeholders. Participatory relationships were few, and successful dialogue was at best limited to supporters. This article uses discursive analysis to examine how newspaper and press release texts and language used therein both shaped and reflected the dynamically changing nature of firm–stakeholder relations in the Fray Bentos dispute. Despite the focal firm’s professed good intentions to create participatory relationships with its stakeholders during the building project, various stakeholders opposed the project and Botnia was caught in the crossfire of heated debate between Uruguay and Argentina. Three different frames changing over time are identified: (a) the investment frame, (b) the conflict frame, and (c) the political frame. The analysis shows that the relationships between the focal firm and stakeholders involved many meanings only partly shared, due in part to a lack of corporate appreciation for the role of language in managing firm–stakeholder relationships.