Stakeholder Management Theory, Firm Strategy, and Ambidexterity

Stakeholder theory scholars have recently addressed two crucial calls: the first is for the integration of strategy and ethics, of stakeholder theory and strategic management, and the second call is for the development of a dynamic approach to stakeholder management. I have attempted to answer these calls by developing a theoretical framework that links together stakeholder management, stakeholder commitment to cooperate with the firm, key decision makers’ ethical commitment, and firm strategy. Starting from the basic assumption that managers cannot meet all stakeholders’ demands immediately and in a tailored manner, I contend, first, that an ambidextrous approach to stakeholder management is conducive to stakeholders’ commitment to cooperate for the sustainable well-being of the firm and, second, that firm strategy and key decision makers’ ethical commitment moderate the relationship between an ambidextrous stakeholder management and stakeholder commitment to cooperate. Furthermore, drawing on this theoretical framework, I attempt to address the call for the integration of strategy and ethics by proposing a three-level conceptual model that distinguishes the objectives, the field, and the levers of integration. Finally, I outline a set of propositions that, taken together, represent a first attempt to develop a dynamic approach to stakeholder management.

[1]  Harry J. Sapienza,et al.  The Role of Relational Trust in Bank–Small Firm Relationships , 2004 .

[2]  C. Fombrun,et al.  Corporate Citizenship: Creating Intangible Assets Across Institutional Environments , 2006 .

[3]  A. Wicks,et al.  Corporate and Stakeholder Responsibility: Making Business Ethics A Two-Way Conversation , 2007 .

[4]  Simone de Colle,et al.  Stakeholder Theory: The State of the Art , 2010 .

[5]  R. E. Freeman,et al.  Stockholders and Stakeholders: A New Perspective on Corporate Governance , 1983 .

[6]  Shawn L. Berman,et al.  Does Stakeholder Orientation Matter? The Relationship Between Stakeholder Management Models and Firm Financial Performance , 1999 .

[7]  P. Drucker,et al.  What makes an effective executive. , 2017, Harvard business review.

[8]  F. Hoy,et al.  INTEGRATING CORPORATE SOCIAL POLICY INTO STRATEGIC MANAGEMENT , 1984 .

[9]  Susan S. Harmeling,et al.  Innovative Stakeholder Relations: When 'Ethics' Pays (and When it Doesn’t) , 2006 .

[10]  M. Zollo,et al.  Stakeholder cohesion, innovation, and competitive advantage , 2010 .

[11]  L. Preston,et al.  The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications , 1995 .

[12]  R. Edward Freeman,et al.  Stakeholder Theory and "The Corporate Objective Revisited" , 2004, Organ. Sci..

[13]  C. Prahalad,et al.  To revitalize corporate performance, we need a whole new model of strategy. Strategic intent. , 1989, Harvard business review.

[14]  Henry Mintzberg.  Musings on management. Ten ideas designed to rile everyone who cares about management. , 1996, Harvard business review.

[15]  M. Tushman,et al.  Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change , 1996 .

[16]  Howard Thomas,et al.  STRATEGIC RENEWAL AND THE INTERACTION OF CUMULATIVE STRESS AND INERTIA , 1992 .

[17]  D. Jamali.  A Stakeholder Approach to Corporate Social Responsibility: A Fresh Perspective into Theory and Practice , 2008 .

[18]  R. Freeman.  Strategic Management: A Stakeholder Approach , 2010 .

[19]  Ronald K. Mitchell,et al.  Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of who and What Really Counts , 1997 .

[20]  Daniel A. Levinthal,et al.  The myopia of learning , 1993 .

[21]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[22]  Michael L. Barnett.  Stakeholder Influence Capacity and the Variability of Financial Returns to Corporate Social Responsibility , 2005 .

[23]  Dennis A. Gioia,et al.  Practicability, Paradigms, and Problems in Stakeholder Theorizing , 1999 .

[24]  A. Wicks,et al.  What Stakeholder Theory is Not , 2003 .

[25]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[26]  Joseph E. Coombs,et al.  Stakeholder management as a predictor of CEO compensation: main effects and interactions with financial performance , 2005 .

[27]  P. Ghemawat.  Strategy and the Business Landscape , 1999 .

[28]  M. Lubatkin,et al.  Ambidexterity and Performance in Small-to Medium-Sized Firms: The Pivotal Role of Top Management Team Behavioral Integration , 2006 .

[29]  Antonio Argandoña,et al.  Fostering Values in Organizations , 2002 .

[30]  R. Freeman,et al.  Corporate Strategy and the Search for Ethics , 1988 .

[31]  M. Zollo,et al.  Towards an internal change management perspective of CSR: evidence from project RESPONSE on the sources of cognitive alignment between managers and their stakeholders, and their implications for social performance , 2009 .

[32]  C. Argyris.  Reasoning, learning, and action : individual and organizational , 1982 .

[33]  Sydney Finkelstein,et al.  Why smart executives fail: Four case histories of how people learn the wrong lessons from history , 2006 .

[34]  L. Paine.  Managing for Organizational Integrity. , 1994 .

[35]  Andrew C. Inkpen,et al.  The Corporate Objective Revisited , 2001, Organ. Sci..

[36]  Anne Sigismund Huff,et al.  Industry influences on strategy reformulation , 1982 .

[37]  G. Rusconi,et al.  Ethical Thinking in Traditional Italian Economia Aziendale and the Stakeholder Management Theory: The Search for Possible Interactions , 2009 .

[38]  Jeffrey H. Dyer,et al.  Relation‐specific capabilities and barriers to knowledge transfers: creating advantage through network relationships , 2006 .

[39]  A. Hillman,et al.  Shareholder value, stakeholder management, and social issues: what's the bottom line? , 2001 .

[40]  Charles W. Hofer,et al.  Strategic management : a new view of business policy and planning , 1980 .

[41]  M. Porter.  What is strategy , 2000 .

[42]  S. Zadek.  The path to corporate responsibility. , 2004, Harvard business review.

[43]  J. Harrison,et al.  Managing for Stakeholders, Stakeholder Utility Functions, and Competitive Advantage. , 2010 .

[44]  Philip L. Cochran,et al.  Integrated and Decoupled Corporate Social Performance: Management Commitments, External Pressures, and Corporate Ethics Practices , 1999 .

[45]  C. Prahalad,et al.  Serving the world's poor, profitably. , 2002, Harvard business review.

[46]  D. Melé,et al.  Corporate Social Responsibility Theories: Mapping the Territory , 2004 .

[47]  J. Birkinshaw,et al.  Organizational Ambidexterity: Antecedents, Outcomes, and Moderators , 2008 .

[48]  Tyson B. Mackey,et al.  Corporate Social Responsibility and Firm Performance: Investor Preferences and Corporate Strategies , 2007 .

[49]  M. Minoja,et al.  Strategizing Corporate Social Responsibility: Evidence from an Italian Medium-Sized, Family-Owned Company , 2007 .

[50]  Sumantra Ghoshal,et al.  Changing the Role of Top Management: Beyond Strategy to Purpose , 1994 .

[51]  K. Goodpaster.  Business Ethics and Stakeholder Analysis , 1991, Business Ethics Quarterly.

[52]  Clayton M. Christensen,et al.  Disruptive innovation for social change. , 2006, Harvard business review.

[53]  C. Markides,et al.  Competing with dual business models: A contingency approach , 2004 .

[54]  C. Seelos,et al.  Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategic View , 2007 .

[55]  S. Velamuri,et al.  A New Approach to CSR: Company Stakeholder Responsibility , 2008 .

[56]  Graeme Auld,et al.  The New Corporate Social Responsibility , 2008 .

[57]  L. L. Rodrigues,et al.  Corporate Social Responsibility and Resource-Based Perspectives , 2006 .

[58]  Samuel B. Graves,et al.  The corporate social performance-financial performance link , 1997 .

[59]  M. Clarkson.  A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance , 1995 .

[60]  Robert A. Phillips,et al.  Stakeholders, Reciprocity, and Firm Performance , 2009 .

[61]  Nathan T. Washburn,et al.  Unrequited Profit: How Stakeholder and Economic Values Relate to Subordinates' Perceptions of Leadership and Firm Performance , 2008 .

[62]  L. Preston,et al.  Managing the Extended Enterprise: The New Stakeholder View , 2002 .

[63]  Sybille Sachs,et al.  Toward Dynamic Corporate Stakeholder Responsibility , 2009 .

[64]  J. Moon,et al.  Corporate Social Responsibility in Management Research: Focus, Nature, Salience and Sources of Influence , 2006 .

[65]  Jared D. Harris,et al.  New Directions in Strategic Management and Business Ethics , 2010, Business Ethics Quarterly.

[66]  Michael Maccoby.  El poder de la transferencia: por qué la gente sigue al líder , 2004 .

[67]  J. D. Margolis,et al.  Misery Loves Companies: Rethinking Social Initiatives by Business , 2003 .

[68]  Gregory A. Bigley,et al.  Ethical Theory and Stakeholder-Related Decisions: The Role of Stakeholder Culture , 2007 .