Instrumental Stakeholder Theory has begun to suffer from what might be termed “mission drift.” Despite its initial success in creating a foothold for ethics in managerial decision-making, the efficiency arguments which now dominate this research stream have become counterproductive to the original goal of connecting ethics and capitalism. We argue in this paper that the way forward is by re-centering contingency, conversation, and inefficiency in stakeholder theory. To start this process, there needs to be a reckoning of some unintended impacts (...) of the success of the instrumental stream of stakeholder research. For a contrasting approach, we draw on Richard Rorty’s pragmatism and its foundation of ethical “irony,” a state of continuous doubts about the utility of one’s moral vocabulary. We offer a Rortian approach to stakeholder theory, unearthing the possibility for new corporate target functions in the goals of harm reduction, solidarity, and social mobility, the foundational building blocks of an ironist ethical perspective. (shrink)

It is generally assumed that a corporate purpose aiming to benefit all stakeholders has a positive effect on employee motivation and engagement, but no empirical studies into these specific effects were found. To examine this assumption, a corporate mission and vision matching the definition of a higher purpose were tested in two subsequent studies. The first study (N = 270) was a cross-sectional self-report study. The second study included a longitudinal design (N = 56) modeling purpose, motivation, and engagement in (...) a cross-lagged panel design over three time-points. The results associated purpose with motivation and engagement. The subsequent longitudinal analysis confirmed the presumed directionality from purpose to engagement, but not to motivation. Hence, while a corporate purpose can be added to the list of antecedents to work engagement, the relationship with motivation, despite the significant association with purpose in the cross-sectional study, remains more complicated. The present study adds to the knowledge of the beneficial effects of a broader purpose and responds to the current surge of interest in purpose as an instrument for sustainable business. (shrink)

Stakeholder theorists have traditionally objected to the neoclassical conception of the firm as a vehicle for maximizing profit or shareholder wealth, thus opening up space for controversial engagement with neoclassical economics. The present paper fills some of this space by elaborating the parallels between stakeholder theory and classical institutional economics, a heterodox school of economic thought that has long been critical of a broad range of neoclassical ideas. Rooted in the writings of Veblen and Commons, classical institutional economics explores how (...) the social provisioning process is coordinated or hindered by real-world business institutions. From this standpoint, stakeholder theory highlights the possibility of overcoming the institutionally ingrained conflicts and trade-offs for the sake of realizing common human interests in organizing the social provisioning process in an orderly and reasonable way. This argument not only illuminates the relationship of stakeholder theory to the wider societal context of modern capitalist economies but also elaborates novel aspects of the moral nature of stakeholder management. (shrink)

Stakeholder theory has largely been anthropocentric in its focus on human actors and interests, failing to recognise the impact of nonhumans in business and organisations. This leads to an incomplete understanding of organisational contexts that include key relationships with nonhuman animals. In addition, the limited scholarly attention paid to nonhumans as stakeholders has mostly been conceptual to date. Therefore, we develop a stakeholder theory with animals illustrated through two ethnographic case studies: an animal shelter and Nordic husky businesses. We focus (...) our feminist reading of Driscoll and Starik’s (J Bus Ethics 49:55–73, 2004) stakeholder attributes for nonhumans and extend this to include affective salience built on embodied affectivity and knowledge, memories, action and care. Findings reveal that nonhuman animals are important actors in practice, affecting organisational operations through human–animal care relationships. In addition to confirming animals are stakeholders, we further contribute to stakeholder theory by offering ways to better listen to nontraditional actors. (shrink)

The paper builds on the stakeholder salience framework and applies a social identity approach to explain family firm dynamics and how these could impact on family firm governance and ethics. In particular, we consider the family as the main stakeholder for family firms and we refer to the recent approaches to stakeholder theory based on ‘names-and-faces’ and on social identity to focus on family members at the individual and organizational level. Family businesses offer an opportunity to study stakeholder salience in (...) settings with multiple logics. Our paper acknowledges how the attributes of legitimacy, power and status, for family business members, can derive from three different institutional settings (family, business and local community) and how these attributes are assigned and gained by family members on the basis of the stakes they put (or could put) on the business. From the analysis of these dynamics specific ethical considerations emerge. (shrink)

The objective of this article is to create an understanding of how the UN sustainable development goals can be used to steer stakeholder engagement for transformative change, meeting global challenges, and navigate a new business-societal practice driven by a values-based business model. The article is a conceptual study with case studies of the role that the SDGs play in multi-stakeholder dialog via the kind of sustainable business-societal practice that takes corporate social responsibility to the next level, where it is embedded (...) in a values-based business model, creating a new meaning to effect real business-societal transformation. Multi-stakeholder dialog implies interactive and communicative engagement with the full range of stakeholders in order to create value for all, employing a societal perspective and using the value network as a basis for effective decision-making. We explain our methodological approach by presenting multi-stakeholder dialog in practice, in the form of multiple case studies. These empirical settings consisted of two values-driven privately owned companies with a strong reporting mechanism and a clear transformation agenda based on the SDG challenges: IKEA and Löfbergs. The empirical study provides the basis for our proposed model. This article makes an original contribution to the study of the use of SDGs in management and service research. It investigates steering and navigating processes in specific contexts in order to determine what should be subject to legal enforcement and what comprises moral and/or ethical value, particularly at the societal level. (shrink)

We predict multistakeholder benefits as a measure of organizational performance from the perspective of important organizational stakeholders. Specifically, we identify the relative importance of theoretical antecedents that affect the different dimensions of stakeholder benefits. Offering the first empirical synthesis of multistakeholder benefits to date, we assess the statistical explanatory power of different theories in the literature, focusing on the extent to which their suggested antecedents of organizational performance may lead to improvements in multiple dimensions of stakeholder benefits. Based on 110 (...) empirical studies since 1990 to date concerning any two of four stakeholder groups (investors, customers, employees, and community /environment), we find no evidence for any single theory to have sufficient explanatory power in predicting benefits concerning all four stakeholder groups. Thus, we cannot reduce different mechanisms leading to multistakeholder benefits to a grand model or theory but need to resort to a multi-theoretical synthesis. Taking stock of the meta-analysis, we suggest future studies should fill three gaps: multiple dimensions within a stakeholder benefit, causal complexity, and inequality of stakeholder benefit creation. (shrink)

I examine the career advancement facilitators of organizational stakeholders who may be identified as simultaneously “core” and “fringe” in this article, via the insights of 21 leaders with disabilities. To navigate barriers and advance their careers, these leaders benefited from three categories of facilitators, including career self-management strategies, social networks, and organizational and societal factors. Facilitators are synthesized with a metaphor, the three-legged stool, which depicts three foundational pillars that underlie the leaders’ success. Focusing on an understudied element of the (...) social networks pillar, I examine how leaders’ external networks (family, friends, acquaintances, and role models) facilitated their career advancement. Findings point to the role of strong and weak ties in developing leaders’ career self-management strategies as well as their access to core stakeholder positions. Last, contributions, implications, and limitations of this article are discussed. (shrink)

The first goal of this paper is to develop a theoretical and practical framework which can help to measure the emotional value generated by organizations in quantitative terms. Its second goal is to use data obtained from the UCAN in Spain as a case study to illustrate the quantification of the emotional value generated, with a view to factoring that value into a social accounting system. Ever greater recognition of the social role of organizations in recent years has led to (...) a need for a consistent definition of the concept of socio-emotional value, and for instruments that can be used to measure that value in terms of generic social accounting. Taking the current lack of standardization in such models and instruments, especially those that deal with emotional value as its starting point, the paper proposes a new instrument for measuring that value quantitatively in such a way as to overcome some of the limitations of earlier proposals. The underlying perspective is that the monetary values identified in market and non-market transactions do not accurately account for all the value generated for different stakeholders, and that adjustments are required through a correction factor applied to the value variables identified. The quantification of the socio-emotional value generated by an organization is seen as a more comprehensive indicator of its performance, given that it provides more information and takes into account the value generated for stakeholders as a whole in all dimensions. (shrink)

A central claim in stakeholder theory is that, if we see stakeholders as human beings, we will attribute higher moral standing or show more moral consideration to stakeholders. But would the same hold for firms? In this paper, I apply the concepts of humanization and moral standing to firms, and I predict that individuals attribute higher moral standing to stakeholder-oriented than to profit-oriented firms, because individuals attribute more experience to stakeholder-oriented than to profit-oriented firms. Five experiments support these predictions across (...) different operationalizations of stakeholder and profit orientations. The analyses show that moral standing attributions are not fully explained by attributions of agency to firms, or by attributions of experience or agency to human stakeholders. By unearthing the importance of experience attributions for moral standing attributions to firms, this work provides novel insights in ongoing legal, philosophical and public debates related to firms’ moral standing. The findings also bring the debate about firms’ moral standing to the heart of stakeholder theory, and lead to new normative and descriptive research questions about the interests of firms and their stakeholders. (shrink)

Can business humanize its stakeholders? And if so, how does this relate to moral consideration for stakeholders? In this paper we compare two business orientations that are relevant for current business theory and practice: a stakeholder orientation and a profit orientation. We empirically investigate the causal relationships between business orientation, humanization, and moral consideration. We report the results of six experiments, making use of different operationalizations of a stakeholder and profit orientation, different stakeholders, and different participant samples. Our findings support (...) the prediction that individual stakeholders observing a stakeholder-oriented firm see the firm’s other stakeholders as more human than individual stakeholders observing a profit-oriented firm. This humanization, in turn, increases individual stakeholders’ moral consideration for the firm’s other stakeholders. Our findings underscore the importance of humanization for stakeholders’ moral consideration for each other. This paper contributes to a deeper understanding of the firm as a moral community of stakeholders. Specifically, we move away from a focus on managers, and how they can make business more moral. Instead we direct attention to stakeholders, and how business can make these stakeholders more moral. (shrink)

To mitigate risk, should companies signal a broad range of environmental, social, and governance initiatives or instead focus on only a few ESG issues? Drawing on signaling theory, we propose that a broad array of ESG initiatives generates not only signal consistency but also accelerating signal costs. Our empirical results support the resultant hypothesis of a curvilinear relationship between ESG scope and equity risk. In addition, this U-shaped curve seems to become steeper when firms face multiple media-reported ESG controversies. Overall, (...) our study qualifies the conventional wisdom that firms can reduce equity risk by attending to a wide variety of stakeholders and highlights the moderating impact of the firm’s media environment. (shrink)

The world is not on track to achieve Agenda 2030—the approach chosen in 2015 by all UN member states to engage multiple stakeholders for the common goal of sustainable development. The creation of the 17 Sustainable Development Goals (SDGs) arguably offered a new take on sustainable development by adopting hybrid and principle-based governance approaches, where public, private, not for profit and knowledge-institutions were invited to engage around achieving common medium-term targets. Cross-sector partnerships and multi-stakeholder engagement for sustainability have consequently taken (...) shape. But the call for collaboration has also come with fundamental challenges to meaningful engagement strategies—when private enterprises try to establish elaborate multi-stakeholder configurations. How can the purpose of businesses be mitigated through multi-stakeholder principle-based partnerships to effectively serve the purpose of a common sustainability agenda? In selecting nine scholarly contributions, this special issue aims at advancing this discourse. To stimulate further progress in business studies, this introductory essay, furthermore, identifies three pathways for research on multi-stakeholder engagement processes in support of the Decade of Action along three coupling lines: multi-sector alignment (relational coupling), operational perception alignment (cognitive coupling) and goal and strategic alignment (material coupling). (shrink)

Digital business has marked an era of transformation, but also an unprecedented growth of cyber threats. While digital explosion witnessed by the banking sector since the COVID-19 pandemic has been significant, the level and frequency of cybercrimes have gone up as well. Cybercrime officials attribute it to remote working—people using home computers or laptops with vulnerable online security than office systems; malicious actors relentlessly developing their tactics to find new ways to break into enterprise networks and grasping defence evasion; persons (...) unemployed during the pandemic getting into hacking; cloud and data corruption; digital fatigue causing negligence; etc. This study adopts a case-based approach to explore the importance of business ethics, information sharing and transparency to build an information-driven society by scouting the case of Punjab and Maharashtra Co-operative (PMC) Bank, India. PMC defaulted on payments to its depositors and was placed under Reserve Bank of India’s directions due to financial irregularities and a massive fraud perpetrated by bank officials by orchestrating the bank’s IT systems. The crisis worsened when panic-stricken investors advanced their narrative through fake news peddled via social media channels, resulting in alarm that caused deaths of numerous depositors. It exposed several loopholes in information management in India’s deposit insurance system and steered the policy makers to restructure the same, thus driving the country consistent with its emerging market peers. The study further identifies best practices for aligning employees towards ethical behaviour in a virtual workplace and the pedagogical approaches for information management in the new normal. (shrink)

Corporate social responsibility remains a topic of interest for both theory and practice due to its multifaceted avenues and potential for growth. We have chosen embedded CSR and peripheral CSR measures to evaluate how these activities affect the employee turnover intentions via a mediation mechanism of organizational citizenship behavior. In doing so, this study addresses important stakeholder concerns and provides meaningful managerial contributions for the employers to encourage more employee participation toward sustainable corporate performance. This study incorporates four hypotheses that (...) are tested in a structural equation modeling framework by employing Warp-PLS software. Data were collected from 297 employees working in firms that are renowned for their CSR initiatives. We found support for our key hypotheses leading to strong theoretical contributions to the stakeholder theory. We have addressed the main issues of stakeholders’ response to the CSR tradeoffs and have tried to develop a deeper understanding of managers in initiating peripheral and embedded CSR activities for their firms. (shrink)

Will stakeholder theory continue to transform how we think about business and society? On the occasion of this journal’s 60th anniversary, this review article examines the journal’s role in shaping stakeholder theory to date and suggests that it still has transformative potential. We conducted a bibliometric analysis of co-citations in the literature from 1984 to 2020. Reporting these results, we examine the field’s evolving structure. Contextualized theoretically as an accomplishment of institutional work—the creation of a meaningful and innovative field ideology—this (...) structure is remarkable for how it integrates ethical and behavioral arguments, invites engagement from adjacent domains, and arrives at important insights for business and society. We advance a research agenda consistent with this larger institutional project. (shrink)

AbstractIn this extended case study, we examine how business leaders translate a responsible leadership mindset into practice. By studying the leadership team and stakeholders of a large US college dining provider, we found that organization executives leverage the lenient market category of local food to successfully connect with and satisfy the interests of different stakeholder groups. We show that lenient categories, those with ambiguity and unclear boundaries, could be used by organizations as strategic devices to integrate the diverse needs of (...) their stakeholders and foster positive stakeholder relationships. Based on our findings, we develop a theoretical model to illustrate how responsible leaders take advantage of meaning structures of the market category they have adopted to achieve both financial and social benefits for a broad range of stakeholders. (shrink)

A growing body of research has focused on the relationship between board diversity and firm performance. A series of empirical literatures have also examined a significant positive correlation between the two. But these results only demonstrate the relationship between the input of ‘diversity’ and the output of ‘firm performance’. Such research is more of a black box because board diversity must act on certain strategies or decisions to affect firm performance. Some scholars try theoretical analysis with the purpose of opening (...) the black box. In order to verify the relevant theoretical analysis results, this study uses the mediating effect analysis model in the field of psychology, through multiple regression, impulse analysis, variance decomposition and other methods, to thus empirically test the mediating effect of technological innovation in the process of board diversification promoting corporate performance. We found that board diversity can improve firm performance by enhancing the level of technological innovation. Among them, technological innovation has played a complete mediating role in the diversity of board members’ functional and occupational background, and played a partial mediating role in the diversification of directors’ part-time jobs. Technological innovation is a key indicator bridging board diversity and firm performance. This study can explore and explain the inner workings of the significant relationship between board diversity and firm performance, and link research findings on similar phenomena. The research results may make the existing board governance theories more systematic, expand the extension of theoretical research, and provide some empirical research references for academics and practitioners. (shrink)

We theorize that, in the current development of business ethics, there is a fruitful evolution that dissolves the dichotomy between the normative and behavioral research approaches developed, respectively, by philosophers and social scientists; this approach avoids many of the limitations originated by such distinction by reconnecting their two separate narratives. We call this emerging research model Humanistic Business Ethics (HBE) as it emphasizes the centrality of the human dimension of business and the importance of adopting a richer concept of humanity (...) in business ethics research. We argue that this specific research model in business ethics emerges when scholars combine a pragmatist philosophical approach with some key ideas coming from stakeholder theory, which we summarize and connect. By leveraging collaboration across ethics, economics, psychology, and entrepreneurship, HBE can help business and society scholars undertake fruitful inquiries into the way business works (and should work) at its best. (shrink)

Despite recognizing the importance of impact investing in combating complex societal challenges, researchers have yet to examine the capacity of the field to address systemic inequality. While impact investments are intended to benefit vulnerable stakeholders, the voices of those stakeholders are generally overlooked in the design and implementation of such investments. To resolve this oversight, we theorize how the fields’ design—through its tools, organizations, and field-level bodies—influences its capacity to address inequality by focusing on the concept of giving voice, which (...) we define as the inclusive participation of vulnerable stakeholders in decision-making processes. We build from stakeholder engagement research to show how the design of impact investing can address inequality using three illustrative cases: social impact bonds, impact investing funds, and national advisory boards. We conclude with a discussion of how the ethical decision of giving voice to vulnerable stakeholders will determine the capacity of the field to address inequality, as well as provide implications for future research and practice. (shrink)

To shield stakeholders from exploitation, society increasingly expects organizations to engage with stakeholders. While exploitation of stakeholders is of great concern, economic literature points to the costly nature of stakeholder engagement vis-à-vis alternative mechanisms that protect stakeholders, such as competitive markets. When the costs of stakeholder engagement outweigh the benefits, why would organizations engage with stakeholders? Through an analysis of the cooperative enterprise and a comparison with its capitalist counterpart, we theorize two additional reasons why stakeholder engagement is beneficial. First, (...) we explain how stakeholder engagement facilitates long-term organizational resilience and protection of stakeholders in times of crisis, and second, we show how engagement is a decisive ingredient in answering non-economic value requirements of stakeholders. To conclude, we contribute to the broader stakeholder engagement and cooperative literature by stressing that engagement practices, and particularly democratic governance arrangements, are subject to design principles that sometimes favor stakeholders in capitalist firms. (shrink)

This paper examines the effects of employees’ sense that they work for a purpose-driven company on their workplace sustainability behaviors. Conceptualizing corporate purpose as an overarching, relevant, shared ethical vision of why a company exists and where it needs to go, we argue that it is particularly suited for driving employee sustainability behaviors, which are more ethically complex than the types of employee ethical behaviors typically examined by prior research. Through four studies, two involving the actual employees of construction companies, (...) we demonstrate that purpose drives the sustainability behaviors of employees by causing them to take psychological ownership of sustainability. In addition, we show that the sustainability-enhancing effect of purpose is stronger when employees perceive that they have higher autonomy in enacting their sustainability actions and for those employees for whom being moral is more central to their sense of self. (shrink)