Ethics of social responsibility to indirect stakeholders: a strategic perspective

Abstract

The responsibilities of organisations to their stakeholders have gained a strategic importance over the last decades. Following the literature on stakeholder management, a firm's stakeholders can be grouped into three classes on the basis of their positions in organisational environment, as internal, direct and indirect stakeholders. Whereas internal and direct stakeholders attract increasing attention from corporate managers, indirect stakeholders have usually been neglected by the practitioners. The purpose of this study is to provide an ethical approach on how a business organisation can conceptualise its responsibilities to indirect stakeholders and suggest strategic steps to adopt this approach for long-term competitive advantage. In tandem with its conceptual framework, the study classifies existing implications of responsible corporate action towards indirect stakeholders among cost leadership, differentiation and focus strategies.