Introduction

Banks, telecoms, and energy companies have faced numerous public scandals during the last decade (O’Riordan and Fairbrass 2014). Freeman (1984, p. 107) had already emphasized that “corporate survival depends in part on there being some ‘fit’ between the values of the corporation and its managers, the expectations of stakeholders in the firm and […] societal issues.” In fact, an increasing number of companies such as WalMart (Sethi 2014), Royal Dutch Shell (Hennchen 2014), Philip Morris, Kraft, Nestlé (Smith 2012), and Coca-Cola (Gill 2009) have lost profits because of societal challenges. Although stakeholder theory has received attention for decades, disastrous business incidents still happen between firms and their stakeholders. Companies can encounter various challenges in their efforts to acquire or maintain legitimacy for business activities such as resource exploration, natural water usage (Falck and Spangenberg 2014), the tobacco trade, infant formula, and processed foods production (Smith 2012). Risks entail stakeholders’ threats to the company (Rowley and Moldoveanu 2003), Internet media attacks, and criticism concerning the exploitation of workers, communities, or customers. Such conflicts demonstrate that society is increasingly having a say in how and if businesses’ operations are legitimized. If stakeholders force companies to break with their daily business routines in order to deal with the challenges of societal groups’ interests, the results are loss of profits and opportunities (Wilburn and Wilburn 2011).

Stakeholders such as local communities have emerged as increasingly important players for companies, demanding increased involvement in business operations and decision-making processes. There is growing recognition in the literature that a number of companies need to reconsider their stakeholder-management and engagement approach in order to avoid potentially costly conflicts and exposure to societal or legal challenges and to secure their legitimacy (Dobele et al. 2014; Edwards and Lacey 2014; Gill 2009; King 2007; Kroeger and Weber 2014; Mumford and Fried 2014; Nelsen 2006; Prno and Slocombe 2012; Kwon and Adler 2014; van der Voort and Vanclay 2015; Wilburn and Wilburn 2011).

Stakeholder theory provides several frameworks for classifying stakeholders into legitimate and non-legitimate groups (Mitchell et al. 1997; Phillips 2003). From the opposing perspective, stakeholders have the power to contribute to companies’ legitimacy or illegitimacy for their operations. Dobele et al. (2014) noted that efforts by a company to create legitimacy are doomed to failure if they are not built on the recognition of the importance of stakeholders and their relationships with them. Engagement activities provide stakeholders as well as companies with an opportunity to learn about each other’s interests and activities, potentially negative impacts, and even benefits for one or both. Companies and stakeholders can engage on different levels to voice concerns, discuss potential challenges, identify new opportunities for cooperation, and grant or withdraw trust (Prno and Slocombe 2012).

In the literature, different industries have been investigated in order to study companies’ stakeholder-engagement activities and measures to ensure business legitimacy (Corvellec 2007; Edwards and Lacey 2014; Richert et al. 2015). To delve more deeply into stakeholder engagement within another vital but controversial industry, we selected the natural mineral water bottling industry for our investigation.

Water is vital and one of the most important resources available on Earth. The literature has already documented that stakeholders identify risks and interests as they learn about the growing stress on the world’s water resources and about the activities of companies sourcing and selling communities’ natural water resources (LeFanic 2010). The industry is a significant global player, as bottled water is one of the world’s most popular beverages. Approximately one thousand plastic bottles of water are sold every second in the US and about four thousand bottles worldwide (Young 2010). Research relating specifically to actual stakeholder-engagement activities within this industry is scarce. This is even more unsettling as the international water bottling industry has faced several stakeholder challenges in the past. We present brief examples from Coca-Cola, PepsiCo (Aiyer 2007; Ravi Raman 2010), and Fiji Water (Kumar 2010) that emphasize that economic activities related to water are precarious and can be polarizing. An increasing number of European countries face challenging developments within the industry: The European Citizens’ Initiative of 2014 states that “Water and sanitation are a human right! Water is a public good, not a commodity” (European Union Right2Water 2014). The initiative aims to ensure that all EU citizens enjoy the right to water as a public good and to exclude water supply and management of water resources from internal market rules and liberalization. As many as 1,884,790 EU citizens signed the initiative, thereby proclaiming their interest (European Commission 2014b). This presents a challenge for companies in the European water-resource industry. A growing number of stakeholders have begun to question the legitimacy of their operations. With our study, we hope to contribute to the current discussion and develop an explanatory framework that may then be applied to the natural mineral water bottling industry in Austria to investigate if and how mineral water bottling companies engage with their stakeholders.

The article starts with a comprehensive review of the literature on stakeholder engagement. Based on the literature review, we suggest an explanatory framework that integrates stakeholders’ interests and engagement activities and company behavior. We then investigate whether companies in the Austrian sourcing and natural mineral water bottling industry disclose stakeholder-engagement activities. Following a practice-focused study from Maon et al. (2015), we investigate the number and type of actual engagement initiatives within the industry. The analysis provides several central findings on information, communication, and community measures taken by Austrian natural mineral water bottling companies toward their stakeholders. We then draw conclusions regarding the current stakeholder-engagement activities of the companies and the likely consequences for their operational legitimacy today and in the future.

Literature Review

Sustainable Development, CSR, and Stakeholder Theory

A complex interplay exists between companies’ business activities and their external relationships (Cennamo et al. 2012; Jones 1995; Zollo et al. 2013). Cook (1977, p. 77) asserted that: “No single theoretical perspective will enable us to explain everything about organizational interaction.” Companies are legal and social constructs operating within frameworks of company laws, legal licenses, regulations, and even codes of stock exchanges. These set the normative paradigms of what each company is about and for whom each one exists, and they may also explain a company’s motivations and priorities (Newborne and Mason 2012).

Presently, numerous stakeholders are demanding that companies align themselves more closely with principles based on sustainable development (Prno and Slocombe 2012). The sustainable development movement, and therefore many claims of societal groups, stem inter alia from the UN Report of the World Commission on Environment and Development: Our Common Future, also known as the Brundtland Report, an appeal to society, governments, and businesses to “[meet] the needs of current generations without compromising the ability of future generations to meet their needs and aspirations” (United Nations 1987, p. 15). Generations can include present and future company stakeholders and their management of companies in order to consider societal interests (Posch and Steiner 2006; Shrivastava and Berger 2010; United Nations 1987). Wilburn and Wilburn (2011, p. 4) suggest that “companies meet sustainable development expectations by focusing on the needs and concerns of the communities in which they operate.”

Another popular research stream focuses on literature related to corporate social responsibility (CSR). CSR can be viewed as applying stakeholder theory to different stakeholder groups. Compared to stakeholder theory, less emphasis is placed on satisfying stakeholders such as owners or stockholders and more emphasis is placed on non-traditional stakeholders with a potentially adverse effect on company operations (Freeman 1984). De Jong and Van der Meers (2015) and Maon et al. (2015) highlight that there is also no universally accepted definition of CSR. De Jong and Van der Meers (2015) identify two features that differentiate CSR activities from other actions: the initiatives partly or entirely benefit society and/or general interests, and they are not obligated by law. Syn (2014) suggests that individually declared CSR principles are often aligned with and dictated by company goals and terms. CSR initiatives can have positive effects on stakeholder relationships and be based on substantial engagement measures, but they are decided upon voluntarily by institutions and are not directly connected to the approval of company operations by stakeholders (Syn 2014). Greenwood (2007) suggests that stakeholder engagement must be seen as separate from but related to corporate responsibility. The engagement activities may coincide with the moral treatment of stakeholders, but they can also be based on amoral or even immoral motives. The author further proposes that “corporate irresponsibility occurs when the strategic management of stakeholders does not remain responsibility-neutral practice but becomes an immoral practice based on the deception and manipulation of stakeholders” (Greenwood 2007, p. 324). This research shows that the type of activity pursued for stakeholder engagement depends upon corporate responsibility or actual irresponsibility and illegitimacy.

Stakeholder Theory and Stakeholder Engagement

Clarkson (1995, p. 106) emphasizes that “stakeholders are persons or groups that have, or claim, ownership, rights, or interests in a corporation and its activities, past, present, or future. […] Stakeholders with similar interests, claims, or rights can be classified as belonging to the same group such as employees, shareholders, or customers.” Competitors, consumer advocates, customers, employees, environmentalists, governments, institutions, community organizations, media, neighbors, suppliers, and even the natural environment are qualified to be actual or potential current or future stakeholders of companies, with interests, claims, or rights (Freeman 1984; Mitchell et al. 1997; Sachs et al. 2011; Wilburn and Wilburn 2011). In this article, we refer to stakeholders as having “interests,” possibly compromising claims and/or rights in regard to the undertakings of companies.

Theory related to stakeholder management emerges from a long research tradition. Freeman (1984) emphasized the necessity for an organization to manage stakeholders in an action-oriented and strategic manner. Archambeault et al. (2008) reviewed stakeholder theory based on information asymmetry literature. Information asymmetry research emphasizes conditions where one party has certain information that another party probably does not have, but the exchange of such information has advantageous or disadvantageous consequences for one or both parties (Epstein and Mealem 2013). Managers usually have access to detailed internal information, but many stakeholders lack access to direct information about current or planned business activities and changes. These information asymmetries influence the relationships between a company and its stakeholders (Archambeault et al. 2008).

In order to decrease information asymmetries and, therefore, the likelihood of conflicts, the literature provides several stakeholder-management tools for the identification, classification, and engagement of stakeholders; Freeman (1999, p. 235) concluded, “happily, for surely there is more than one way to be effective in stakeholder management.” Stakeholder management usually includes the identification of a company’s individual stakeholders and their stakes. This is followed by the evaluation or even development of stakeholder–company relationships (Freeman 1984; Steiner 2008). Positive aspects in favor of a well-developed corporate stakeholder management may include a company’s ability to predict or control the external environment, higher levels of operating efficiency, fewer incidents of damaging moves by stakeholders, fewer conflicts with stakeholders and fewer legal suits, more favorable legislation or regulations for the company, higher entry barriers for new competitors, and/or higher levels of trust from communities and increasing profitability (Harrison and Caron 1996; Minoja et al. 2010).

Stakeholders such as communities have multiple interests in defining what is acceptable within their area of influence. Thus, even consultation that informs stakeholders must start with the ability to identify the various stakeholder groups, along with their expectations and interests (Hall 2014). Managers face complexity when identifying and prioritizing external individuals and entities. The literature presents measures and tools designed to distinguish company stakeholders from non-stakeholders. Mitchell et al. (1997) and Clarkson (1995) propose a set of stakeholder identification principles. Clarkson (1995) divides stakeholders into two types: primary and secondary stakeholders. Primary stakeholder groups are essential; a company cannot survive without their continuing participation, and these groups include clients, suppliers, employees, and shareholders. Secondary stakeholders are not engaged in transactions with a company and thus are not essential to its survival; however, they may create public opinion about a company and may demonstrate or rebel. Examples of secondary stakeholders include the media and special interest groups (Clarkson 1995).

Stakeholders can also be classified as external and internal groups. External stakeholders are not integrative part of companies’ internal operations, such as communities or media, whereas internal stakeholders include managers, employees, and company owners (Ayuso et al. 2011; Miles et al. 2009).

As proposed by the cited authors, companies can vary substantially in their stakeholder identification processes, their stakeholders’ specific interests, and their commitment to certain stakeholder relationships (Schaltegger et al. 2013; Zollo et al. 2013). Freeman (1984) highlights that companies that do not engage with their stakeholders are not socially viable and can experience operational turbulence. However, companies can also face turbulence that results from the types of stakeholder-engagement activities they pursue (Greenwood 2007).

Greenwood (2007, p. 317) provided a definition of stakeholder engagement as “practices that the organization undertakes to involve stakeholders in a positive manner in organizational activities.” Companies’ motives for engagement activities can be based on forces that urge them to consider certain claims. Other forces encourage companies to consider certain interests for market success. Stakeholders such as investors or consumers can demand certain products or services from corporations (Ditlev-Simonsen and Midttun 2011; Harrison and Caron 1996; Schaltegger et al. 2013; Steurer et al. 2005).

Companies that effectively manage their relationships with stakeholders can shield themselves from different uncertainties. Depending on the type, some relationships are designed to stabilize and predict environmental influences and to extend the company’s boundaries. Other relationships are partnering activities; companies build bridges with their stakeholders in the pursuit of common goals. According to Harrison and Caron (1996), relationship types indicate the level of engagement activities undertaken by a company. Engagement measures can be community activities, which require context-dependent engagement (Dobele et al. 2014); information activities, which reveal to stakeholders facts about the company that are provided by the company (Oxford University Press 2015a); or communication activities, which refer to the imparting or exchange of information by some type of medium or social contact (Oxford University Press 2015b). Examples are interventions, charitable activities, reputational activities, and activities that tackle specific risks, interests, rights, or claims at the company’s core business operations or sphere of influence. How far engagement activities with stakeholders go is both company and context dependent (Newborne and Mason 2012).

According to Freeman (1984), companies can choose among four basic modes of how to interact with changing environments and engage with stakeholders: inactive, reactive, proactive, or interactive. The mode that is appropriate depends on the interests of stakeholders and the particular situation. Inactivity ignores external changes and stakeholder interests; a company continues business as usual, and no engagement activities are undertaken. Reactive management waits for changes or claims and then responds with activities. Proactive management predicts external changes and stakeholder interests, and attempts to be in a favorable position to respond to these effectively prior to their occurrence. Interactive management seeks active involvement with external stakeholders and participation in future creation (Freeman 1984). Outside or external events are connected to internal progress in three of the four basic modes. Whether an inactive management style over time is a theoretical or actual option for companies today can be questioned.

In addition to engagement activities, the phrase engagement may also “be seen as a mechanism for consent, as a mechanism for control, as a mechanism for co-operation, as a mechanism for accountability, as a form of employee involvement and participation, as a method for enhancing trust, as a substitute for true trust, as a discourse to enhance fairness, as a mechanism of corporate governance” (Greenwood 2007, p. 318). Greenwood (2007) suggests that the engagement of stakeholders is an under-theorized area. Besides the number of activities, the specific type and quality of the engagement activity is also crucial. Irresponsible engagement practices can have negative effects on stakeholders and are naturally counter to their interests. In that sense, more engagement would even be disadvantageous (Greenwood 2007).

Explanatory Framework—Stakeholder Engagement at the Transactional Level

We have elaborated on stakeholder theory, the identification of stakeholders, engagement activities, and modes of how to cope with interest of stakeholders. A core challenge for companies is meeting the interests of their stakeholders in accordance with their own interests and applying appropriate engagement activities (Bundy et al. 2013; Fiss and Edward 2006; Zollo et al. 2013). Without opportunities for participation, stakeholders such as communities are much less likely to offer their approval and support for a company’s operations (Prno and Slocombe 2012).

The following framework illustrates core activities within the transactional process between a company and its stakeholders: (i) the identification of stakeholders’ interests, (ii) stakeholder-engagement activities, (iii) the internal management of stakeholders’ interests, and (iv) companies’ response activities. Stakeholder-engagement activities as well as the response of companies to interests affect information asymmetries between the parties (Fig. 1).

Fig. 1
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Explanatory framework—engagement activities at the transactional level

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The identification of stakeholders’ interests can be based on frameworks from Clarkson (1995), Mitchell et al. (1997), Miles et al. (2009), Steiner (2008), or Schaltegger et al. (2013) in order to take stakeholder identification, classification, and prioritization measures.

The environment and internal management activities are connected through engagement activities (Prno 2013). Central activities are information (Hall 2014) and communication (Prno and Slocombe 2012) measures. Each company chooses the engagement activities it wishes to pursue and the mode it will use to cope with the changing environment. The evolving processes between companies and stakeholders can start with one-way activities (such as providing information) but can become mutual exchange highways (such as interactive workshops).

The next stage within the presented framework focuses on internal management activities. These activities are disconnected from the environment and are, therefore, more or less disconnected from stakeholder observations. Depending on a company’s capabilities to manage its stakeholders’ interests internally, the company responds adequately to previously identified interests. This last stage of response is capable of connecting a company with its environment, depending on the form of response chosen. Companies can acknowledge interests and maintain their current positions. By contrast, companies can respond with change efforts toward identified interests. Changes themselves can be based on defensive measures, where activities are driven by stakeholders, or offensive measures, whereby stakeholders have high cooperative potential with the company and their interests are of specific relevance (Freeman 1984).

Both sophisticated engagement activities and response measures counter information asymmetries. The previous Black-Box interests of stakeholders become visible to the company. Additionally, because of engagement activities, company details can become ascertainable by stakeholders. Corporate response activities can also reduce Black-Box phenomena if stakeholders verify them as addressing their articulated interests. In accordance with the literature findings, reducing information asymmetries can reduce the likelihood of conflicts between companies and their stakeholders (Archambeault et al. 2008) and increase legitimacy for company operations. However, if response activities do not comply with stakeholders’ expectations, the identified interests may have been ignored, misunderstood, or irresponsibly addressed, which can nurture previous and new interests as well as potential conflict. The framework suggests negative consequences for companies if they miss essential activities within the process of managing stakeholder interest. This can lead to increasing information asymmetries and decreasing legitimacy of operations.

The International Water Industry

Natural mineral waters are one kind of water intended for human consumption and are often characterized by a certain high level of purity at their source (European Commission 2014c). Within the bottled water industry, several multinational companies have faced challenges resulting from stakeholder conflicts. In 2006, local communities of Kerala, India, forced the Coca-Cola Company and PepsiCo to stop sourcing groundwater for bottling their drinks. Because of strong stakeholder resistance, both companies lost their business legitimacy and even their legal licenses in the region. All their products were banned from the market of Kerala for a month, leading to financial and reputational losses as well (Aiyer 2007; Ravi Raman 2010). Another stakeholder movement between 2000 and 2006 was the Killer Coke Campaign in Colombia, where stakeholders from several countries mobilized against practices in Colombian Coca-Cola bottling facilities. Gill (2009) presents extended research on the conflict’s origins, the main stakeholders involved, and on the campaign’s development. The campaign focused on human-rights violations, the company’s connections with illegal paramilitary organizations, and the terrorizing and murder of trade unionists at the corporation’s Colombian bottling facilities. Subsequently, the company faced lawsuits in Miami, Florida’s district court, a large consumer boycott, and an attack on its brand image. Stakeholders forced the soft-drink giant to change its behavior. No consent was reached, and in 2007 the campaign petered out (Gill 2009). Coca-Cola is a big player compared to local Colombian stakeholders, as it operates in more than 200 countries through some 300 bottling partners. Still, Coca-Cola lost profits as a result of stakeholder pressure between 2001 and 2007 (Newborne and Mason 2012). Another example involves FIJI WATER. In July 2008, the cabinet of the country of Fiji approved a US $0.10/liter export duty on selected mineral waters. However, bottling companies refused to pay the tax and forced the government to reverse its decision. Today, Fijian stakeholders identify a need for the development of rules to limit the extraction of the country’s water by companies. Claims of stakeholders for engagement activities still exist (Kumar 2010) and may erupt in the future, subliminally and continuously threatening company operations.

Vedeld (2001) provides a positive example of stakeholder engagement in the Indian water-management industry. The author shows the importance of commitment and empowerment of social groups to improve the irrigation sectors in Andhra Pradesh, India. After decades of dysfunctional irrigation management, the operations were transferred to affected stakeholders in newly founded water associations. The immediate effects of this reorganization included more equitable water distribution, a substantial increase in the area to be irrigated, and the resolution of past water conflicts. Initiatives taken to support the transformation toward new systems were proactive workshops with stakeholders, the participation of all affected parties in the project planning phase, public hearings, and extensive consultation between preparation teams and stakeholders (Vedeld 2001). Vedeld (2001) concludes that consulting with stakeholders and the need to create awareness and commitment among broader stakeholder groups are essential for the success of projects and businesses.

The examples above demonstrate that even internationally successful water bottling companies have faced challenges during their business operations, but that a positive example of stakeholder-engagement activities has led to successful institutions in the past. Our literature review revealed a significant lack of theory and empirical data relating to stakeholder-engagement activities in the natural mineral water bottling industry. Hence, in our empirical research, we focus on the types of stakeholder-engagement activities undertaken by all Austrian natural mineral water bottling companies.

Empirical Research

We conducted a practice-focused study to analyze how companies from the Austrian natural mineral water bottling industry engage with their stakeholders from an external perspective. We offer insights into the types and states of actual engagement activities of these companies.

Within the last decade, online media have begun to profoundly change the way information and communication activities are pursued. Companies are confronted with multiplying channels for creating and diffusing information (Besiou et al. 2013). Besiou et al. (2013) contrast stakeholder media and company media. The instrument stakeholder media is used by stakeholders to increase their influence on companies. Company media can be official web pages or financial reports that are utilized to increase the influence of companies on stakeholders. We were interested in activities officially communicated from companies to stakeholders in order to decrease information asymmetries and to connect the environment to company operations.

The full assessment of the extent to which stakeholder-engagement activities have been integrated into companies’ internal initiatives requires access to detailed internal information. However, that information is not available to several external stakeholders. Therefore, we sought to identify publicly accessible data on companies’ official web pages, published by the companies themselves and functioning as signals for us and for all stakeholders. These signals could serve as proxies to determine whether stakeholder engagement has been considered for company activities. Additionally, we identified the financial statements of the companies to assess their financial capabilities and to position them within the Austrian natural mineral water market.

Data and Method

We utilized a website-based content analysis of all companies sourcing natural mineral waters in Austria and officially recognized by the European Commission (2014c) and the Austrian government. The Austrian government has faced challenges to protect water quality in the past. The European Commission took the Austrian government to court after it failed to ensure adequate protection for the Schwarze Sulm River. A proposed power plant was approved by the authorities despite its negative impact on the region’s water quality and its noncompliance with Directive 2000/60/EC of the European Parliament. The EU Water Framework Directive obliges member states to protect and restore all bodies of ground and surface water. The waters are expected to show as few traces of human impact as possible (European Commission 2014a). Therefore, Austrian authorities have already experienced conflicts in the field of legal water-policy licensing. Austrian companies have to follow these water policies and licenses, but their stakeholder-engagement measures are not part of official regulations and therefore not officially recognized or monitored.

The Austrian natural mineral water market is stagnating, with sales of about 773 million liters of water in 2013. The average consumption is 91 L per person per year (Official Commercial Register of Austria 2015). We identified all companies registered within the “List of Natural Mineral Waters” recognized by the European Union member states, published and updated within the Official Journal of the European Union in 2013 and 2014 (European Commission 2014c). Additionally, we compared the list with the official list from the Austrian government on natural mineral water sourcing from 2014 (Federal Ministry of Health 2014). Both lists provided the same trade names and water sources. We listed all natural mineral waters within Austria, followed by an online identification of the companies sourcing from these waters. This step led us to a complete list of all eleven companies that source and bottle natural mineral water in Austria.

In the next step, we collected data on the types and numbers of current stakeholder-engagement activities in Austrian companies. To identify the engagement activities, a qualitative content analysis was conducted. We followed Milne and Adler’s (1999) use of analyzing corporate documents. According to Milne and Adler (1999, p. 237), “Content analysis is a method of codifying the text (or content) of a piece of writing into various groups (or categories) depending on selected criteria” and their context. In a directed content analysis, the categories derived from the literature research (information, communication, community) were utilized for raw data sorting. The content analysis seems to be an appropriate method for providing an inventory of official stakeholder-engagement activities in the industry and connected relationships pursued.

A first list of categories was determined deductively: the companies’ engagement measures were identified, listed, and classified according to the three categories derived from the literature review. Subsequently, the companies were screened specifically for activities within the predefined clusters. Two measures were taken to ensure the reliability and validity of data. Based on the categories derived from the literature, coding was conducted two times, 6 months apart, to verify the categorization of data. A second coder identified the engagement activities within the same texts in a second procedure and essentially ended up with the same list of activities. Subsequently, one researcher attributed the activities to the clusters and the three categories.

Second, the engagement activities of companies were also screened two times, 6 months apart, from each other, to make sure that the typologies found would also cover new data. The interval times between the research activities were randomly chosen to allow the authors to reconsider prior and next steps. Findings were critically reviewed and discussed among the authors. The result was that some activities were found missing at the second round, but typologies did not change. Data were adapted and the findings analyzed.

List of Stakeholder-Engagement Activities

All official websites of the companies were reviewed in order to list all measures that link the company with external stakeholders and decrease information asymmetries. Examples are the publication of contact information, workshops with stakeholders, quality measures, standards, certificates, community programs, cooperation, partnerships, and recycling activities (Appendix Table 4). The final list contained 63 different measures published by at least one company. Some measures were stated by only one or two companies (e.g., sustainability reports). In order to have meaningful and comparable results, we created 16 clusters with the 63 measures. The clusters are separated into two groups. The first group includes 13 clusters based on a list of measures indicating several similar activities on stakeholder engagement: standards, certificates/awards, contact details, quality conscientiousness, social activities, ecological activities, new media, workshops, meetings with stakeholders, external partner, local community activities, international community activities, and charity. Standards were clustered as written definitions that are approved and monitored for compliance by an authoritative agency or professional, recognized body, such as ISO or IFS. Certificates and awards were defined as written attestations of formal procedures by accredited or authorized bodies to verify characteristics, such as quality or status of the products, in accordance with established criteria. Contact details as a cluster refer to the sum of information provided in order to contact the company. Activities of quality conscientiousness are defined as voluntary measures taken to communicate the quality characteristics of products to stakeholders; the activities are not connected to requests from official authorities or institutions for further evaluation. This is also true for the defined clusters of social activities, ecological activities, and new media. Each of these three clusters focuses on activities communicated by the company that are voluntary, independent of official and legal or non-legal commitments, and that anticipate stakeholders´ interests in social, ecological, or new media activities. Workshops and meetings were clustered based on planned events, and intensive online or offline exchanges between companies and stakeholders. External partner, local, and international community activities and charity are clustered according to the clear naming of partners on the home page, stated involvement activities in the surrounding areas or from the location of the company’s distinct international areas where stakeholders interact. Charity activities were clustered as voluntary initiatives to give money or distinct products to groups or individuals in need.

The second group includes three clusters of single values: a home page for the specific product, sustainability/CSR reports, and open house days. The item of a specific home page for the product was selected as an important information activity but not suitable for further subdivision. Open house days were selected as an important interactive communication activity, as the company opens usually limited or non-accessible areas for public visiting and observations. Sustainability/CSR reports were accepted as information materials issued by companies to inform stakeholders regarding sustainability efforts. The reports were registered within the study according to the denomination provided by the companies.

The 16 clusters are assigned to one of the three stakeholder-engagement categories, i.e., information, communication, or community. These engagement activities connect the company to its environment. Information refers to data published by the company to inform stakeholders about the specific products, sustainability reports, standards, and certificates or awards published. Communication refers to the possible exchange of information from a managerial, operational external perspective on specific, potentially challenging stakeholder issues. The third main stakeholder-engagement measures are community activities. The clusters focused on partners presented by the company, local community activities (for instance, local fire brigade event meetings, community education activities, street promotion for clean water), international community activities (such as water-supply projects in foreign countries or waste-free ocean projects), and charitable events (also focusing on donations).

The engagement activities found per company, the clusters developed, and the main stakeholder-engagement categories (information, communication, community) are summarized in Table 5 in the Appendix and show the activities of each Austrian natural mineral water bottling company. In order to decide whether or not to assign a company activity to a cluster, the companies’ home pages and reports were analyzed and ‘N’ was recorded for no and ‘Y’ for yes, if companies had information, communication, or community activities that were accessible.

Findings and Discussion

Within the empirical research, 32 natural mineral water trade brands were identified, the total of all Austrian natural mineral water trade brands recognized by the European Commission and the Austrian Government (European Commission 2014c; Federal Ministry of Health 2014). We excluded seven trade brands, as they were no longer in business (for instance, Markusquelle, Sulzegger Styrianquelle); we had no accessible information regarding their existence (for instance, Hofsteigquelle, Sonnenberg Quelle, or Wellness); or they were registered as drinking water sourcing but used for completely different economic purposes (Bad Tatzmannsdorfer). The resulting 24 trade descriptions of bottled waters led to 11 companies behind the descriptions of natural mineral waters. These companies bottle different brands from Austrian mineral water sources. The companies are as follows: Rieder’s Quellenbetriebe Ges.m.b.H, Starzinger GmbH & Co KG, Gasteiner Mineralwasser Gesellschaft m.b.H., GÜSSINGER Beverages & Mineralwater GmbH, Peterquelle—Waterplus Vertriebs Gmbh, Privatquelle Gruber GmbH & Co KG, Preblauer Heil- und Mineralwasser GmbH, Römerquelle Trading GmbH, Waldquelle Kobersdorf Ges.m.b.H., Hubertus Bräu, and Vöslauer Mineralwasser AG.

According to the annual financial statements of the companies submitted to the Austrian fiscal authority in 2013 (the most recent data available), all of these companies belong to the group of small- and medium-sized enterprises in terms of employees (Eurostat 2015). On average, a company has 55 employees and a revenue of 20 million Euro (Official Commercial Register of Austria 2015).

Peterquelle—Waterplus Vertriebs Gmbh, Preblauer Heil- und Mineralwasser GmbH, GÜSSINGER Beverages & Mineralwater GmbH, Rieder’s Quellenbetriebe Ges.m.b.H, and Gasteiner Mineralwasser Gesellschaft m.b.H compiled minimum disclosure documents for legal registration. Waldquelle Kobersdorf Ges.m.b.H., Privatquelle Gruber GmbH & Co KG, Starzinger GmbH & Co KG, Vöslauer Mineralwasser AG, and Römerquelle Trading GmbH each provided an additional statement regarding their business situations. Only Hubertus Bräu provided no statements and no financial material.

Financial data are dependent on the company structure and additional business activities. The firms do not provide separate data regarding their revenues and employees specifically for bottled natural mineral waters. For example, Römerquelle Trading GmbH is part of the Coca-Cola group and its operations focus on efficient production measures. On the other hand, Starzinger GmbH & Co KG is a family business that produces additional products such as beer in-house. We focused on stakeholder-engagement measures but offer several insights into legally registered economic data.

Waldquelle Kobersdorf Ges.m.b.H, increased its revenue by 5 % in 2013. The management identifies no current business risks in its local environment but plans to introduce a new local brand to meet current market needs (Official Commercial Register of Austria 2015). Privatquelle Gruber GmbH & Co KG states that competition within the Austrian natural mineral water market increases yearly. Therefore, stakeholder orientation and a long-term perspective are crucial. The Starzinger GmbH & Co KG produces a wide range of refreshment products. This family business emphasizes the positive impact of public relations on its stakeholders and plans to launch further stakeholder initiatives to secure market share and growth. Vöslauer Mineralwasser AG is part of an Austrian group of companies but is an independently operating subsidiary. Revenues increased by 3.3 % in 2013. The company emphasizes its strategic orientation toward environmentally friendly, premium-quality, and organic products. It states a range of certificates and implemented human risk management measures. In order to secure its future operations and to remain competitive, the company invests in premium quality. Römerquelle Trading GmbH is the only subsidiary of a major global group, Coca-Cola Company Atlanta, USA. The company is the market leader in the Austrian mineral water industry, with 21 % market share. It emphasizes the impact of new media on public relations and efforts to increase its environmental performance to hold and increase its current market share (Official Commercial Register of Austria 2015).

The following radar chart depicts the findings of the screening process on information, communication, and community activities, as presented by the identified companies (Fig. 2).

Fig. 2
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Engagement activities in 11 Austrian natural mineral water bottling companies

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The data show that 10 of 11 companies provided stakeholders with a specific home page for their bottled natural mineral water. One company, Vöslauer Mineralwasser AG, published a sustainability report. Six companies did provide a standard for their bottled water, such as the International Food and Safety Standard (IFS). Another six companies did not provide certificates or awards to inform stakeholders about the natural mineral water sourced and bottled.

Second, we identified the measures of companies in the area of communication activities. All companies provided contact details with their name, address, email address, and telephone number for stakeholders to voice interests. Nine companies signaled quality consciousness with data on products’ composition of mg/L ingredients, product quality measures, or quality management systems. By contrast, only two companies revealed information concerning the social internal activities they pursue, such as internal health and safety measures, flexible working hours, or gender equality initiatives. Seven companies presented ecological activities for bottling mineral water on their home pages, with measures such as recycling activities or photovoltaic panels in the case of GÜSSINGER Beverages & Mineralwater GmbH. Six companies used new media channels to communicate with their stakeholders. Activities focused on newsletters (for instance, Römerquelle Trading GmbH), Facebook pages (GÜSSINGER Beverages & Mineralwater GmbH, Starzinger GmbH & Co KG, Gasteiner Mineralwasser Gesellschaft m.b.H., Peterquelle—Waterplus Vertriebs Gmbh, Vöslauer Mineralwasser AG), or twitter accounts (for instance, Vöslauer Mineralwasser AG).

Nine companies had no accessible information regarding open house days. Furthermore, ten companies did not provide information on workshops where they meet with stakeholders. Only GÜSSINGER Beverages & Mineralwater GmbH presented workshop activities in which they interact with stakeholders. Six companies promoted meetings with stakeholders at social events.

Six companies presented partnerships on their websites. Four companies presented no community activities at all. Another four companies fulfilled at least three of the four criteria in the community cluster: GÜSSINGER Beverages & Mineralwater GmbH, Waldquelle Kobersdorf Ges.m.b.H., Hubertus Bräu Johann Kühtreiber, and Vöslauer Mineralwasser AG all pursued local community activities, such as educational activities, fire department cooperation, or product-related local events. At the international level, nine companies had no accessible information related to international community activities. Only two companies, GÜSSINGER Beverages & Mineralwater GmbH and Vöslauer Mineralwasser AG, presented activities in this field of interest. Four companies presented charity activities, such as donations to certain community projects.

In summary, more than two-thirds of the 11 companies engaged stakeholders by a specific home page for their bottled natural mineral water (10), provided contact details (11), and communicated quality consciousness (9). Less than one-third of the 11 companies provided data and engaged with stakeholders with sustainability reports (1), social internal activities (2), open house days (2), workshops (1), or international community activities (2).

Hence, it becomes apparent that all companies provided contact details for stakeholders to voice interests, and all companies communicated quality consciousness to stakeholders. Only two companies listed internal social measures within their companies. The cases introduced above demonstrate that a lack of social internal activities can lead to internal and external turbulence. Coca-Cola Company faced challenges in bottling plants in Colombia because of internal social conflicts regarding working conditions. It raises the question why Austrian natural mineral water bottling companies do not have or do not present activities in this area. Furthermore, in three out of four community activities, the majority of companies are not active. In particular, international community activities are rare, with only two companies presenting measures in this field.

From a resource-based perspective, larger financial capabilities suggest greater investment potential for engagement measures. A critical review of the number of stakeholder-engagement activities compared to financial capabilities leads to two major findings. Preblauer Heil- und Mineralwasser GmbH has the lowest annual revenue and is among the two least active companies in terms of engagement measures. Likewise, Vöslauer Mineralwasser AG reports the highest annual revenue and also communicated the largest number of engagement activities. These findings support a resource-based perspective on financial capabilities and engagement activities. However, some of the identified engagement efforts are also counterintuitive to financial data. Römerquelle Trading GmbH has the highest revenue per employee, and the second-highest total revenue per year. Still, CSR or sustainability reports were missing during our study, and the company was not among the top four companies in terms of engagement activities. GÜSSINGER Beverages & Mineralwater GmbH has the third lowest revenue but is among the top two companies in terms of engagement activities. The reasons for these findings could be borrowed from Freeman (1984), who suggests that the influence of executives and managers critically determines stakeholder-management practices beyond financial capabilities.

Quality consciousness was one of the major concerns communicated. This seems to be reasonable, as drinking water is seen as a necessity for life and should therefore have a standard of high quality. We were surprised by the fact that almost all companies lacked a CSR or sustainability report. Russo and Tencati (2009) found that a number of companies seem to approach CSR as an attempt to secure operations within their community, and CSR reports are also one of the most utilized market-oriented tools for securing operations in branches such as the mining industry (Carroll 1991). In fact, increasing stakeholder pressures in the water bottling industry might be, in part, beneficially counteracted by such reports. Most companies were lacking in the area of communication activities with their stakeholders, namely open house or workshop measures. These activities would facilitate the identification of stakeholders’ interests with direct, active exchange processes between the company and external stakeholders. As Freeman (1984) suggests, a lack of interactive measures indicates low stakeholder-management capabilities. Active involvement with external interests would create a common future for the company and concerned stakeholders (Freeman 1984).

Moreover, most companies lacked signals concerning community activities, especially on an international level. In light of the increasing stress on global water resources as identified by the United Nations and the European Union, there is potential for increasing engagement activities in local and international communities to secure operations.

We would also like to acknowledge the limitations of our analysis. The categorization of engagement activities is based on primary text content research within a specific industry. Other industries might need to focus on different categories and developments. Additionally, the number of cases is very limited because of the small number of companies active in the Austrian natural mineral water bottling industry—it is a census of all companies registered and currently operating in the market. However, we provide the first research on publicly accessible, online stakeholder-engagement activities using the case of the Austrian natural mineral water bottling industry.

It should be noted that our research was limited to companies’ own statements and reports about their activities. We used their own descriptions of engagement activities to cluster the findings. Another limitation involves the exhaustiveness of the three cluster categories. Still, and according to our literature research, it seems plausible that the clusters we distinguished will cover the majority of stakeholder-engagement activities in practice. Of importance but beyond the scope of the current article were the vertical qualities of each company’s activities, which impact further stakeholder-engagement capabilities. Our data advance the possibility for further qualitative research of the reasons behind the selected activities and the depth of activity application in upcoming studies. The depth of corporate engagement toward each activity has a lot of potential for future qualitative case studies. Each company could be a case and could compared with other cases to present a thorough analysis of the reasons behind the selection of stakeholder-engagement activities and connections to diverse financial capabilities. Additionally, the Austrian industry could be compared with other countries’ industries using similar radar charts.

Conclusion

This article has explored the construct of stakeholder engagement and its application within the Austrian natural mineral water bottling industry. It has offered an explanatory framework that integrates stakeholder theory and the information asymmetry concept. The framework is followed by empirical findings on a census of the Austrian natural mineral water bottling industry. The possibly polarizing activities of sourcing and selling community water resources is an increasingly critical issue, as the EU Water Initiative of 2014 confirms. The initiative warns companies about the alienation from stakeholder interests that can result in negative reputations, increased costs, and/or decreasing shareholder values.

Meaningful stakeholder engagement is increasingly important for companies in order to secure their legitimacy in various industries. The logic of this argument is based on literature findings that company managers can secure operations by identifying the interests of their relevant stakeholders, engaging with them, incorporating selected interests, responding adequately to stakeholders, and thereby reducing information asymmetries within the process. The type of engagement activity can depend upon corporate responsibility or actual irresponsibility and illegitimacy.

Findings within the Austrian mineral water industry showed that most companies implemented a very limited number of engagement activities. A critical look by the managers in charge of their stakeholder-engagement activities would be highly advisable, particularly as increasingly challenging business environments in the field of sourcing and bottling natural mineral waters emerge. The findings show that the majority of companies have implemented a very limited number of communication and community measures. Passive measures hinder the active identification of stakeholders’ interest. This can lead to surprising moves by stakeholders and abrupt claims within the industry, which could have been mitigated or anticipated based on more active stakeholder engagement in workshops, open house days, or international community activities.

We are convinced that future research regarding water sourcing and its economic distribution is essential as water is a basic need of all living things and perhaps the most vital resource on the planet that all people have a stake in.