VIOLATIONS OF THE SOCIAL LICENSE TO OPERATE -How can management regain the social license?

Abstract

The social license is a critical aspect of a company's reputation and success, as it reflects the ongoing support and acceptance of its stakeholders and society at large. To maintain and protect the social license, companies must operate responsibly and transparently, build trust with the community, and promptly address any issues that may arise. However, with the increasing expectations and standards for corporate behavior, the risk of violating the social license is also rising. Therefore, this thesis aims to contribute to the discussion on change management after the social license has been violated. Specifically, it aims to address the research question of how to regain the social license once it has been compromised. To address this question, we have conducted a comprehensive literature review and interviewed stakeholders to gain their perspectives on the social license concept and the effectiveness of different change management strategies.

Within our study, we have identified change initiatives that organizations should carefully consider. These initiatives revolve around enhancing the company's legitimacy by aligning its values and actions with those of its stakeholders and society. Furthermore, improving credibility is crucial, and this can be achieved by fostering transparency and authenticity in communication and reporting. Building trust is another vital aspect that can be accomplished through active stakeholder engagement and collaboration. Additionally, it is essential for organizations to develop effective response strategies that clearly demonstrate their commitment to addressing the issue at hand and implementing preventive measures to ensure its non-recurrence.

By considering the perspectives of stakeholders, our study provides a more comprehensive grasp of the social license concept and its influence on corporate behavior. Companies that take a strategic and proactive approach to the social license can not only avoid costly incidents and reputational damage but also build stronger relationships with their stakeholders and ensure long-term success.