Deregulation and the stakeholder model

Abstract

PurposeThe aim of this paper is to analyze how deregulation affects different stakeholder groups, such as customers, employees, suppliers, creditors, the community and the environment. A distinction has been made between industries with and without network structures.Design/methodology/approachThe approach is based on literature review in order to formulate propositions.FindingsDeregulation has not always benefited the stakeholder groups analyzed. Consumers and employees have been able to profited from new entries, but the effect on prices and wages, respectively, is not always conclusive. Suppliers can increase their negotiating power, but on the other hand, creditors might find it difficult to get loans repaid. Deregulation in itself does not affect the environment, nor the ethical behavior of the firm.Originality/valueThis study provides an insight on how deregulation affects different stakeholder groups. The regulator can benefit from the findings in order to improve the methods of deregulation. Particularly, deregulation of industries with network structures, such as electricity, natural gas, telecommunications give rise to some specific problems pointed out in the study, which the regulator ought to take into account. Consequences in other industries are also mentioned, which can help the regulator avoid errors made in the past.