A stakeholder synergy perspective of ecological value creation

Abstract

Firms are increasingly being considered a central actor in both causing the underlying problems of grand challenges, such as global climate change, as well as facilitating efforts to potential solutions. Through their commitment to various stakeholder groups, firms may create different types of value, not just monetary, in appeasing expectations. Recent theoretical perspectives posit the balancing of multi-attribute utilities of essential stakeholders group within a business system to co-create value in ways that overcome the conventional trade-off narrative discussed in traditional literature on stakeholder value creation. However, the relevance and boundary conditions as it relates to firm impacts on the natural environment is missing. This distinction, as crucial as it is for the current perspective, is still lacking in in both conceptualizing and empirical attestations in extant literature. We bridge this gap by empirically testing the conditions under which firms are more likely to create ecological value amidst the utility sources of shareholders. Findings from a panel of 3,182 firm-year observations (2012-2016) generally support our arguments related to the external conditions in which groups exert both direct and indirect pressure on firms to address environmental issues.