Research Seminar by Flore BRIDOUX

Research seminar by Flore BRIDOUX, Associate Professor, University of Amsterdam.

How do stakeholders react to a firm’s orientation towards its stakeholders?

Stakeholder theory has gained a strong foothold in the strategy field, yet there is little empirical work testing the mechanisms that stakeholder theorists have proposed to explain individual stakeholders’ reactions to a firm’s treatment of its stakeholders. We combine a survey and an experiment to fill this gap. Specifically, we first conceptualize two orientations that firms can adopt in their dealings with stakeholders: a profit orientation and a stakeholder orientation. We then propose three causal pathways to explain why a firm’s orientation may influence stakeholders’ behavior: an instrumental, socio-emotional, and deontic pathway. With a new measure (for the survey) and a manipulation (for the experiment) of a firm’s profit and stakeholder orientation, we test the effect of these orientations on (prospective) employees’ and customers’ intention to join the firm, intention to leave the firm, and pro-organizational behavior. Our findings support the central claim of instrumental stakeholder theory, as well as our conceptualization in terms of three causal pathways, but also call into question some of the ideas in the theoretical literature about how a stakeholder orientation influences stakeholders’ behavior.