Stakeholder Orientation: Proactive and Responsive Components and Firm Performance

Abstract

Recent news headlines question corporate motivations. Major multinational banks have been fined billions for LIBOR rate fixing. HSBC has been scrutinized intensely because of money laundering concerns. The Deepwater Horizon explosion resulted in unprecedented environmental devastation and billions fines and reparations to affected Gulf shore communities. Incidents like this raise an important question: Are executives and corporations too focused on profits? Advocates of stakeholder theory posit that a balanced approach to managing stakeholders ensures long-term sustainability. Management and marketing scholars have called for the integration of market orientation and stakeholder theory, as well as inclusion of proactive and responsive components for core stakeholders. In response, several scholars have recently developed and validated scales to assess stakeholder orientation, with all demonstrating that stakeholder orientation is positively correlated with firm performance. The current study – based on a ...