Analytic hierarchical process (Ahp)-based prediction of stakeholder salience from selected stakeholder groups among firms in Nigeria

Abstract

Firms that are rational in their approach to stakeholder salience may perform better because they are able to prioritize their socially responsible actions to the various stakeholder groups. However, not many firms adopt rational approach. Therefore, this study investigates relevant environmental factors that are predictive of stakeholders’ salience among selected firms in Nigeria using analytic hierarchical process (AHP). Cross-sectional research design was used for the study. Quota, simple random and convenient sampling techniques was employed to obtain responses from a sample of 225 corporate affairs personnel in various quoted companies on the Nigeria stock exchange (NSE). Responses were analysed by obtaining the weight estimates of respondents’ perception of stakeholder salience ordered on a 3 × 3 matrix for the stakeholder groups using expert choice analytical tool. It was found that socio-cultural (0.250) and economic (0.250) stakeholder groups was much lower (half) the priority accorded political constituencies (0.500) This result suggest that majority of the socially responsible actions amongst firms in Nigeria were politically motivated. Alternative priorities for the three dimensions of stakeholder salience were also higher for legitimacy (0.47311) and power (0.46815). The result suggests that firms in Nigeria tend to place greater emphasis on both legitimacy and power of stakeholder groups, and lesser priority on urgency (0.05874). The implication is that firms should concentrate their socially responsible effort on stakeholder group that will make the greatest impact on their corporate performance. Concerted effort should be made to provide broad based regulatory framework and benchmark for socially responsible behaviour among firms operating in Nigeria. Mechanisms for reporting, monitoring, auditing, setting standards and enforcing compliance should also be put in place. Key words: Stakeholder salience, analytic hierarchy process, corporate governance, corporate social responsibility, Nigeria.