Firm-Stakeholder Networks

The role of the corporation in society is continually evaluated in a search for the balance between conduct aimed at maximizing economic profit and conduct aimed at maximizing social welfare. In this age of the postindustrial enterprise, theorists of firm behavior have suggested that the firm should be subject to forces of society, not separate from them. Although laws and regulations have delineated specific standards for compliance with societal expectations, voluntary compliance with societal expectations is an enigmatic phenomenon. Predicated on the unstable ground of ethical and instrumental rationales, the mechanisms that compel the firm to consider societal interests are not well understood. It is the goal of this study to examine the conditions that generate firm efforts to respond to societal interests. These interests are represented by particular groups called stakeholders. The conditions are derived from social influence external to the firm and from the philosophy held by the firm’s top management. This leads to the following questions: