Tourism exists as a powerful economic force in the development of both community-based and global markets. Today, its activities comprise the worlds largest industry with over three trillion dollars in revenues produced (Clegg 1994). Despite its economic significance, debate continues as to whether or not tourism truly benefits all entities involved in its system. At a most basic level, two schools of thought exist regarding its role in community and/or market development (Lea 1988). The political economy view posits tourism as an exploitative force which emanates from the desire of affluent middle classes in metropolitan countries (Lea 1988). This somewhat fatalistic view suggests that residents of a destination have little, if any, voice in the developmental process of the tourism function and, as a result, can only react to its consequences on their home environment. Indeed, the industry is often criticized for its rather imposed planning decisions on the local population from outside groups or planning bodies (Keogh 1990).

Alternatively, the functional view approaches tourism as a proactive force which, if developed appropriately, seeks to maximize positive returns to a communitys overall growth while minimizing the costs to the environment and culture. A functional approach suggests that all parties—or stakeholders—interested in or affected by this business within a particular market or community should collectively manage the tourism system. This co-operative approach toward its development is advocated in research involving collaboration and development (Keogh 1990). Jamal and Getz define these collaborative efforts as a process of joint decision-making among autonomous, key stakeholders of an inter-organizational, community tourism domain [designed] to resolve planning problems of the domain and/or to manage issues related to the planning and development of the domain (Jamal and Getz 1995:188). The purpose of this article is to extend this research base by conceptualizing how multiple stakeholder interests can be managed in tourism development and planning processes.

2. Managing stakeholder interests

In the recent tourism literature, more and more researchers argue the need for increased collaboration in the planning process (Hunt 1991; Jamal and Getz 1995; Keogh 1990; Long 1991; Marsh and Henshall 1987). Although some try to present a definitive argument as to the impact of tourism on community development (i.e., promotes or destroys the overall quality of life), the most basic argument presented in much of the literature is the need to more actively involve all persons affected by proposed development (Jamal and Getz 1995). Such a position is similar to the underlying premise of stakeholder theory.

2.1. Stakeholder Theory

The stakeholder theory, pioneered by Freeman 1984, suggests that an organization is characterized by its relationships with various groups and individuals, including employees, customers, suppliers, governments, and members of the communities. According to Freeman, [a] stakeholder in an organization is (by definition) any group or individual who can affect or is affected by the achievement of the organizations objectives (Freeman 1984:46). Thus, a group qualifies as a stakeholder if it has a legitimate interest in aspects of the organizations activities (Donaldson and Preston 1995) and, thus, according to Freeman, has either the power to affect the firms performance and/or has a stake in the firms performance.

The fundamental basis of the stakeholder theory is normative. It redefines an organization as a stakeholder interests co-ordinating and optimizing entity which requires the firm to accept two key concepts:

[First], Stakeholders are persons or groups with legitimate interests in procedural and/or substantive aspects of corporate activity. Stakeholders are identified by their interests in the corporation, whether the corporation has any corresponding functional interest in them. [Second], The interests of all stakeholders are of intrinsic value. That is, each group of stakeholders merits consideration for its own sake and not merely because of its ability to further the interests of some other group, such as the shareowner (Donaldson and Preston 1995:67)

.Each stakeholder group, it is further reasoned, has a right to be treated as an end in itself, and not as means to some other end, and therefore must participate in determining the future direction of the firm in which [it has] a stake (Donaldson and Preston 1995:73). Similarly, this theory submits it is the responsibility of managers, and the management function, to select activities to obtain optimal benefits for all identified stakeholder groups, without giving priority to one stakeholders interests over another. Consideration should be given to each stakeholder group, regardless of the relative power or interest held by each. Likewise, management must proactively seek out inputs from all groups, as some will have stronger voices than others and this should not determine the priority of managements attention. Under this philosophy, the entire purpose of the firm becomes the co-ordination of stakeholder interests. Since the theory presumes that managers act as if all interests have intrinsic value, the recognition of this value and the resulting obligations to the stakeholder grants the theory its normative core. This does not preclude the descriptive or instrumental power of the theory. Indeed, researchers argue that its overall managerial worth stems from the fact that the normative, descriptive, and instrumental aspects of the theory are mutually supportive. Arguably, however, the theorys dominant role is its ability to provide moral and philosophical guidelines for the management of an organization (Donaldson and Preston 1995).

From a managerial perspective, the stakeholder theory posits that the various groups can and should have a direct influence on managerial decision-making (Jones 1995).As most succinctly stated by Freeman, To be an effective strategist you must deal with those groups that can affect you, while to be responsive (and effective in the long run) you must deal with those groups that you can affect (Freeman 1984:46). As such, effective management demands synchronous attention to the genuine interests of all appropriate stakeholders (Donaldson and Preston 1995). Clarkson (1995) emphasizes this premise and cautions that failure to retain participation of even a single primary stakeholder group will result in the failure of the organization.

An organization that effectively manages its stakeholders must understand three key concepts: identification of the stakeholder and their respective perceived stakes, the processes necessary to manage the organizations relationships with its stakeholders, and management of a set of transactions or bargains among the organization and its stakeholders (Freeman 1984). In short, an organization with Stakeholder Management Capabilities has organizational processes to take these groups and their stakes into account routinely as part of the standard operating procedures of the organization and which implements a set of transactions or bargains to balance the interests of these stakeholders to achieve the organizations purpose. . . (Freeman 1984:53).