Towards a conceptual framework for stakeholder relationship management on South African wine farms

Abstract

The importance of the South African wine industry has grown due to increased access to global markets and its growing contribution to the GDP. The sector contributed R36 billion (1.2%) to the GDP in 2018 and continues to directly and indirectly employ 300 000 people. Therefore, it is of utmost importance that the sector remains stable to drive further development. However, the industry outlook is uncertain. Rising production costs, climate and technological disruption is cause for concern. Wine farms are under pressure as wine production is declining and sustainability at the farm level is increasingly challenging. Sustainability and stabilisation do not simply lie in driving direct sales in regional, national and international markets. It is crucial that the industry comes together to drive inclusive growth which considers the quadruple bottom line of people, planet, profit and purpose. Literature shows stakeholder relationship management (SRM) is a key driver for sustainable and successful businesses across multiple industries. Stakeholder relationships are evident throughout the wine value chain; however, research on wine farms and SRM is limited. Furthermore, literature suggests that the wine industry as a whole should build and maintain resilient relationships. This should lead to mutual value creation which considers a diverse set of needs and wants from small and large wine farms, consumers, customers and other industry role players. The AccountAbility Stakeholder Engagement Standard (2015) is viewed as central for implementing SRM. This study adopted an ethnographic design to qualitatively answer the key question of what the best practices for SRM on South African wine farms could be. An industry body for the South African wine industry and several wine farms participated in this study. Interviews and organisational documents served as the sources of empirical evidence. The evidence suggests that the industry and selected wine farms value SRM as a business function. However, SRM practices are not being used to its full potential despite an understanding of the importance thereof. The major recommendation of this study is a conceptual framework which could enable wine farms to improve SRM practices and thus better identify and meet stakeholders’ legitimate needs and wants. Future research would elevate this framework to a model.