Stakeholder theory is one of the most influential theories in business ethics. It is perhaps not surprising that a theory as popular as stakeholder theory should be used in different ways, but when the disparity between different uses becomes too great, it is questionable whether all the ‘stakeholder research’ refers to the same underlying theory. This paper starts to clarify this definitional confusion by distinguishing between three different ways in which different lines of stakeholder research are connected with descriptive and (...) instrumental stakeholder theory. First, a distinction is made between research connected with descriptive and with instrumental stakeholder theory as defined by Donaldson & Preston in the narrow or broad sense. Second, a distinction is made between research that interprets descriptive and instrumental stakeholder theories as either hypotheses or research areas. Third, a distinction is made between research that interprets Donaldson & Preston’s central concept of ‘stakeholder management’ as either behaviour or rationale. Finally, the paper discusses the implications of these differences for empirical research into stakeholder theory. (shrink)

Building on earlier work on the relationship between corporate social performance (CSP) and a firm’s financial performance, this integrative empirical study supports the theoretical argument that the higher a firm’s CSP the lower its financial risk. Specifically, the relationship between CSP and risk appears to be one of reciprocal causality, because prior CSP is negatively related to subsequent financial risk, and prior financial risk is negatively related to subsequent CSP. Additionally, CSP is more strongly correlated with measures of market risk (...) than measures of accounting risk. Of all CSP measures, reputation for social responsibility appears to be the most important one in terms of its risk implications. (shrink)

This paper focuses attention on the stakeholder attribute of legitimacy. Drawing upon institutional and stakeholder theories, I develop a framework of stakeholder legitimacy based on its three aspects—legitimacy of the stakeholder as an entity, legitimacy of the stakeholder’s claim, and legitimacy of the stakeholder’s behavior. I assume that stakeholder legitimacy is socially constructed by management and that each of its three aspects exists in degree in the manager’s perception. I discuss how these aspects interact and change over time, and propose (...) an agenda for future research on stakeholder legitimacy. (shrink)

This review argues that the role of technology in business and society debates has predominantly been examined from the limited, narrow perspective of technology as instrumental, and that two additional but relatively neglected perspectives are important: technology as value-laden and technology as relationally agentic. Technology has always been part of the relationship between business and society, for better and worse. However, as technological development is frequently advanced as a solution to many pressing societal problems and grand challenges, it is imperative (...) that technology is understood and analyzed in a more nuanced, critical, and comprehensive way. The two additional perspectives invite a broader research agenda, one that includes questions, such as “Which values and whose interests has technology come to emulate?”; “How do these values and interests play out in stabilizing the status quo?”; and, importantly, “How can it be contested, disrupted, and changed?” Any research that endorses green, sustainable, environmental, or climate mitigating technologies potentially contributes to maintaining the very thing that it seeks to change if questions such as these are not being addressed. (shrink)

The aim of this study is to analyse how secondary stakeholders influence managerial decision-making on Corporate Social Responsibility disclosure. Based on stakeholder salience theory, we empirically investigate whether differences in environmental disclosure among companies are systematically related to differences in the level of power, urgency and legitimacy of the environmental non-governmental organisations with which these companies are confronted. Using proprietary archival data for an international sample of 199 large companies, our results suggest that differences in environmental disclosures between companies are (...) mainly associated with differences between their environmental stakeholders’ legitimacy. The effects of power and urgency are of an indirect nature, as they are mediated by legitimacy. This study improves our understanding of CSR disclosure by demonstrating that, next to the well-documented effect of company characteristics, stakeholder characteristics are also important. Besides, it provides scarce empirical evidence that not only primary stakeholders, but also secondary stakeholders are influential with regards to management decision-making. And more specifically, it offers insight into why some stakeholder groups are better able to influence disclosure decisions than other. The results also have important practical implications for managers of both environmental NGOs and large companies. For managers of environmental NGOs the results provide evidence of the most successful tactics for having their environmental information demands satisfied by companies. For company management the results provide insights into the most important stakeholder characteristics, on the basis of which they may develop strategies for proactively disclosing environmental information. (shrink)

The growing popularization of stakeholder theory among management scholars has offered a useful framework for understanding the multiple and interdependent roles of government and business in an increasingly challenging political and regulatory environment. Despite this trend, attention to the role and responsibility of government to protect citizen rights has been limited. To the two traditional stakeholder theory views of government where the focal organization remains the firm, we propose to add two views by pivoting the government’s place and making it (...) the focal organization. We thus describe governments as serving four roles in the business–government–society nexus. For each role, we analyze typical governmental activities/behaviors, relationships with firms’ stakeholders, as well as the challenges and limits to these roles. We also focus on the central notion of salience amplification, as a means of checks and balances across stakeholders in order to safeguard citizen rights and reveal the greater good. (shrink)

In this single industry study, the authors examine relationships between forest products companies in Maine and their stakeholders. The research question, why do firms work with stakeholders, is examined from both instrumental and normative perspectives. Specifically, it is hypothesized that stakeholder power and corporate social responsiveness affect the degree to which firms have working relationships with stakeholders. The study found support for the impact of the firm’s perception of stakeholder power on the strength of its relationships with stakeholders. Most notably, (...) it also found support for the firm’s corporate social responsiveness on the strength of its stakeholder relations, indicating that firms do work with stakeholders from both instrumental and normative bases. (shrink)

This work emerged from funded research examining collaboration among stake-holder organizations present at three U.S. nuclear weapons complex sites. The authors examine issues such as how and why stakeholder groups form collaborative alliances when dealing with the target organization, what leaders of stakeholder organizations actually think about when collaborating to deal with the target organization, and what outcomes result from the collaboration process. Drawing on stakeholder theory and research in interorganizational collaboration, the authors used an inductive, interview-based methodology to build (...) a model of collaboration among nonprofit stakeholder groups. The model contributes to the descriptive stream of stakeholder theory and, in turn, has implications for the instrumental stream. The model also offers implications for future researchers, leaders of stakeholder alliances, and leaders of target organizations. (shrink)

Climate change is one of the most pressing issues facing humanity and has become an area of growing focus in Business & Society. Looking back and reviewing climate change discussion within this journal highlights the importance of time and space in addressing the climate crisis. Looking forward, we extend existing research by theorizing and politicizing the co-implication of time and space through the concept of “space-time.” To illustrate this, we employ the logical structure of “the trace” to advance business and (...) society scholarship on climate change by shifting the focus to a place-bound emphasis on climate impacts and directing scholarship toward climate change’s temporal markers and material effects. By operationalizing “the trace,” we contribute to Business & Society debates in three ways: reimagining complex stakeholder relations, advancing a performative understanding of climate risk, and foregrounding planetary systems and the physical environment. (shrink)

We conceptualise CSR communication as a process of reciprocal influence between organisations and their audiences. We use an illustrative case study in the form of a conflict between firms and a powerful stakeholder which is played out in a series of 20 press releases over a 2-month period to develop a framework of analysis based on insights from linguistics. It focuses on three aspects of dialogism, namely (i) turn-taking (co-operating in a conversation by responding to the other party), (ii) inter-party (...) moves (the nature and type of interaction characterising a turn, i.e. denial, apology or excuse) and (iii) intertextuality (the intensity and quality of verbal interaction between the parties). We address the question: What is the nature and type of verbal interactions between the parties? First we examine (a) whether the parties verbally interact and then (b) whether the parties listen to each other. We find evidence of dialogism suggesting that CSR communication is an interactive process which has to be understood as a function of the power relations between a firm and a specific stakeholder. Also, we find evidence of intertextuality in press releases by six firms which engage in verbal interaction with the stakeholder. We interpret this as linguistic evidence of isomorphic processes relating to CSR practices resulting from the pressure exerted by a powerful stakeholder. The lack of response by ten firms that fail to issue press releases suggests a strategy of ‘watch-and-wait’ with respect to the outcome of the conflict. (shrink)

This research examines how an organization, Thanksgiving Coffee, establishes and maintains its legitimacy with its constituent publics. In line with Boyd’s (2000, Journal of Public Relations Research 12(4), 341–353.) concept of actional legitimacy, Thanksgiving Coffee demonstrates a legitimation strategy addressing social issues and by responding to ethical and political questions. Applying Fisher’s (1984, Communication Monographs 51, 1–18) concepts of narrative fidelity and probability, Thanksgiving Coffee’s policies and communication activities were found to alleviate the social issues to which they were addressed (...) and therefore reinforce perceptions of legitimacy among publics. Viewing the influence of organizations from a different perspective, this study provides an example of how the policies of an organization can have a positive impact on the broader society in which it operates. (shrink)

The purpose of this article is to examine stakeholder identification and prioritization by managers using the power, legitimacy, and urgency framework of Mitchell et al. (Academy of Management Review 22, 853–886; 1997). We use a multi-method, comparative case study of two large-scale sporting event organizing committees, with a particular focus on interviews with managers at three hierarchical levels. We support the positive relationship between number of stakeholder attributes and perceived stakeholder salience. Managers’ hierarchical level and role have direct and moderating (...) effects on stakeholder identification and perceived salience. We also found that most stakeholders were definitive, dominant, or dormant types – the other five types were rare. Power has the most important effect on salience, followed by urgency and legitimacy. Based on our case study, we offer several ways to advance the theory of stakeholder identification and salience. (shrink)

In this paper we investigate whether, and how, corporate management strategically uses disclosure to manage the perceptions of different organizational audiences. In particular, we examine the interactions between the FIAT Group and three of its key organizational audiences—the local press, the international press, and the financial analysts, which are characterized by different levels of salience for the company. We focus on both how management reacts to the optimism level existing within each audience and how the narrative disclosure tone adopted by (...) FIAT influences the ex-post optimism in the local and international press or in the financial analyst community. We investigate the disclosure of the FIAT Group over a 6-year period , during which 70 price-sensitive press releases were published. On the basis of 1,887 news articles published in Italian newspapers and 411 analyst reports, we report evidence of different strategic patterns in the interaction processes between FIAT and its audiences. Our findings also indicate some differences in the way FIAT is affected by, and in turn, affects the sentiment of each audience, thus highlighting that the salience of the stakeholder is an important driver of the adoption of impression management techniques. Taken together, our findings point to issues related to setting the “tone at the top” and potential ethical matters. (shrink)

Although it is widely accepted that corporate reputation influences organization-stakeholder interactions, there is no theoretical framework that conceptualizes this aspect in stakeholders' decision-making processes for establishing various forms of relationships with a firm. By adopting an interdisciplinary approach, this article provides a theoretical model that explains the role corporate reputation has in the process through which stakeholders decide to establish relationships with a firm. It is argued that the stakeholder decision-making process for exchange with a company is based on several (...) exchange rules: corporate reputation, social legitimacy, pragmatic legitimacy, and exchange benefits. The article concludes with a case study of James Hardie Industries in Australia, which illustrates the function of the proposed conceptual model. (shrink)