Stakeholder Salience Theory Research Articles

Sustainability diffusion in the Chinese semiconductor industry: A stakeholder salience perspective

The semiconductor sector plays a crucial role in shaping national strategies and driving economic growth; however, it faces significant challenges prompting a shift towards sustainable development. This study aims to investigate whether sustainability initiatives of the focal firm can diffuse throughout the semiconductor supply chain, leveraging stakeholder salience theory and archival data from listed firms in China. Methodologically, we conduct a regression analysis using STATA 17.0 to examine the impact of the focal firm's sustainability disclosure on supply chain sustainability. Findings indicate a positive correlation between the focal company's sustainability disclosure and enhanced sustainability performance of its key suppliers and customers. This relationship is strengthened when the focal firm demonstrates significant market power, sustainability legitimacy, and urgency in addressing sustainability concerns. Our study contributes to the sustainable supply chain management literature by elucidating sustainability diffusion from a stakeholder salience perspective and offers practical insights for semiconductor managers and policymakers striving to foster sustainable practices within the sector.

Harnessing stakeholder engagement for sustainable agricultural intensification: contemporary evidence from northern Ghana

This article analyses the indispensable role of sustainable agricultural intensification practices (SAIP) in meeting the needs of a burgeoning human population with limited planetary resources and examines the role of various stakeholders in the adoption of these practices by local farmers. The study setting is the Upper West, a semi-arid region of Ghana. The study employs a stakeholder salience theory and a mixed-method design. Firstly, qualitative data were collected and analysed as a basis for formulating a structured questionnaire administered to beneficiary farmers, which were then analysed using marginal effects from logistic regression. Notably, the study found four sustainable crop cultivation practices and three eco-friendly crop storage methods promoted in the area. Furthermore, the engagement of stakeholders like selected farmers, Traditional authorities, and implementing NGOs had statistically significant effects on the adoption of SAIP. However, these effects were smaller when compared to the direct involvement of all beneficiary farmers in the planning and implementation of the intervention. This suggests that while technocrats and authorities are important, they alone cannot achieve the desired impact of development interventions. Beneficiary farmers are the most critical stakeholders in adopting and promoting SAIP. The article further proposes a conceptual framework for implementing SAIP in agro-based rural communities. This research therefore underscores the importance of sustainable agricultural intensification practices in a resource-constrained world and emphasizes the central role of beneficiary farmers in driving the success of such initiatives.

Investigating the varying relevance of CSR dimensions on firm leverage: The implications for internationalized firms

We empirically investigate the varying role of CSR dimensions such as community, diversity, employee relations, environment, human rights, and product on US firms’ leverage. Overall CSR performance and dimensions relating to diversity, employee relations and environment are negatively associated to firm leverage, implying easier access to equity financing. Contrastingly, the human rights dimension is positively associated to firm leverage. For internationalized firms, particularly operating in non-environmentally sensitive industries, the relationship is however reversed for overall CSR performance and dimensions related to diversity, employee relations and environment, while community performance is negatively associated to firm leverage. Drawing on the stakeholder theory of capital structure and stakeholder salience, we highlight the heterogeneous consequences of CSR dimensions as channels that both enable and limit access to equity financing. Our results are robust to alternative explanations and proxies and highlight the need for managing specific CSR dimension performance, the more so when operating multi-nationally.

The integration of education for sustainable development into accounting education: stakeholders’ salience perspectives

PurposeThis paper applies a stakeholder salience theoretical framework to facilitate the understanding of the roles salient stakeholders can have in the integration of education for sustainable development, one of the important Sustainable Development Goals (SDGs), into Jordan’s university accounting education.Design/methodology/approachWe used stakeholder salience theory to inform our study. This study adopted a qualitative research method. The study used semi-structured interviews to collect qualitative, open-ended data that explored the salient stakeholders’ thoughts, beliefs and feelings about their roles in influencing the integration of education for sustainable development into the Jordanian accounting curriculum.FindingsThe results indicate that education for sustainable development in accounting is important; however, most Jordanian salient stakeholders indicate their inability to integrate sustainable education into the accounting curriculum due to their lack of power to do so. The findings show that there is currently an inappropriate distribution of power, legitimacy and urgency amongst the salient stakeholders, who indicate that a progressive education solution is required in the critical area of education for sustainable development in accounting. This research indicates that a significant number of salient stakeholders would like the Jordanian government to provide power, legitimacy and urgency to enable accounting educators to become definite stakeholders as this will enable them to integrate sustainable education into the accounting curriculum.Research limitations/implicationsThe study is limited to Jordan only. The paper draws attention to the need for an appropriate distribution of power, legitimacy and urgency amongst salient stakeholders in Jordan.Practical implicationsThis paper provides evidence that the salient stakeholders in this emerging economy want to make changes in their education system to address climate change concerns, an important SDG, through a better education curriculum for sustainable development in Jordanian universities.Social implicationsAccounting educators should be given the power to make changes in the accounting curriculum, such as integrating education for sustainable development.Originality/valueThere is an inappropriate distribution of power, legitimacy and urgency amongst the Jordanian salient stakeholders and this imbalance hinders the integration of education for sustainable development into the accounting curriculum.

Climate change disclosure and evolving institutional investor salience: Roles of the Principles for Responsible Investment

AbstractThis study investigates the relationship between climate change disclosure and institutional investors. A particular focus of the present study is the question of if and how the relationship is affected by the Principles for Responsible Investment (PRI). A relevant context to the question is shareholder engagement, where institutional investors' legitimacy affects the outcomes. Thus, this study examines Japan, where shareholder engagement is the main pathway for institutional investors to convey their ESG‐related influence to investee companies. Using the stakeholder salience theory as a theoretical framework, the empirical results of analyzing 17,604 firm‐year eXtensible Business Reporting Language (XBRL) documents of listed Japanese companies provide evidence for the following. First, institutional stakeholders' holding ratio has positively influenced corporate climate change disclosure (power). Second, the positive influence of institutional investors is more significant when PRI‐signed institutional investors are present (legitimacy). Third, the aforementioned relations gained statistical significance gradually during the analysis period (urgency). Fundamentally, this study shows that the stakeholder salience theory contributes to a deeper understanding of the relationship.

Sustainability Disclosure in The Malaysian Construction Sector: The Effect of Community and Media Legitimacies

"Research Aims: The objective of the study is to examine the effects of stakeholder pressure on sustainability disclosure (SD). The study includes the effect of community on SD when the company considers the media as one of the legitimate stakeholders. Design/Methodology/Approach: Stakeholder legitimacy is evaluated using SD via content analysis based on panel data samples from the construction and property sectors. Research Findings: It was found that legitimacy is an antecedent and has a positive relationship with SD. Furthermore, this relationship between community legitimacy and SD is stronger when mediated by media legitimacy. Theoretical Contribution/Originality: This study shows the effects of the legitimacy attribute on SD instead of the influence of stakeholders in general (regardless of the legitimacy concept) and the incremental value for companies to include the interest of the media in SD apart from the communities alone. Managerial Implications in the South East Asian Context: It guides managers in forming a comprehensive stakeholder engagement plan and budget to increase company value. This illustrates to the managers the motivation behind making disclosures about the media in the SD more so in this rapid social media where fake and misleading information threatens the public trust in Southeast Asia. Research Limitations & Implications: The study does not include power and urgency factors along with legitimacy. Keywords: Stakeholder Legitimacy, Stakeholder Salience Theory, Stakeholder Theory, Sustainability Disclosure, Construction, Endogeneity"

Green supply chain management and firm sustainable performance: The awareness of China Pakistan Economic Corridor

This study examines the impact of four main dimensions of Green Supply Chain Management (GSCM) i.e., Internal Environmental Management (IEM), Green Purchasing (GP), Eco-design (ED), and Collaboration with Suppliers and Customers (CSC) on firms' Sustainable Performance (SP) - (environmental, social, and economic). The study collected data through an adopted structured questionnaire from 190 respondents of the manufacturing firms located in the Khyber Pakhtunkhwa (KP) province of Pakistan. By employing Structural Equation Modelling (SEM) through SmartPLS, it is revealed that IEM, GP, and ED have a significant positive while CSC has an insignificant positive impact on firms' SP. By dividing the sample into China-Pakistan Economic Corridor (CPEC) aware and unaware groups, it is confirmed that IEM, GP, and ED have a significant positive while CSC has an insignificant association with firms' SP in the former group only as none of the other GSCM dimensions, except the significant positive coefficient of GP, has any significant relationship with firms' SP in the latter group. Besides enriching the literature, especially by exploring the role of CPEC awareness, the study also contributes to the theory by testing the assumptions of the rarely examined stakeholder salience theory in the nexus of GSCM-SP. The study also contributes to the practice by updating all the key stakeholders including the local industry, government, and CPEC authority that GSCM (IEM, GP, and ED) is a comprehensive and effective strategy for boosting firms’ SP and CPEC influencing their association positively.

Stakeholder Power And Sustainability Disclosure: Stakeholder Salience Perspective

Research Aims: This study tests the effects of different stakeholder power (shareholders, employees, customers, business partners, community, government, NGOs, and media) on sustainability disclosure using stakeholder salience theory. Extending from this perspective, this study makes separate assumptions for each stakeholder and determines which one had the most power over sustainability disclosure. Design/Methodology/Approach: The study adopts a journalism (i.e., news framing) approach and observes the element of power in sustainability disclosure using content analysis. The sample comprises of panel data of 140 listed firms in the construction and property sector in Malaysia. Research Findings: The results show that the employees, community and media power are positively related to sustainability disclosure. This study improves our understanding of the factors determining firms' disclosure by demonstrating that market stakeholders (shareholders, employees, customers and business partners) are not perceived as necessary by managers concerning sustainability disclosure. Theoretical Contribution/Originality: Common studies view all stakeholders to be taken homogenously into consideration in business decision making. Few studies focus on the power of stakeholders in influencing disclosure is lacking. Managerial Implication in the South East Asian Context: This study gives insight on which stakeholder is the most important in rank and the finding informs managers to draft a stakeholder management plan and budget, given that such activities can increase firm value. Research Limitation & Implications: This research however did not investigate the dynamics of stakeholder power along with the existence of other salience factors, i.e., the legitimacy and urgency factors. Keywords: Construction, Stakeholder, Power, Salience Theory, Sustainability Disclosure

Layoffs in SMEs: The Role of Social Proximity.

Abundant research exists on the restructuring operations of large, publicly listed firms. However, little is known about the antecedents of layoffs in small and medium-sized enterprises (SMEs). Building on the stakeholder salience theory and arguments on social proximity, this study posits that SMEs are less likely to dismiss employees than large firms. We argue that the existence of strong interpersonal ties between employees and managers makes it hard for SME owners and managers to dismiss employees. Empirically analyzing a large sample of European Union firms, the results confirm that the likelihood of layoffs is lower in SMEs than in large firms, even when performance declines.

Emergent stakeholders: Using multi-stakeholder issue networks to gain legitimacy in corporate networks

Multi-stakeholder issue networks (MSINs) are models of cross-sector cooperation dedicated to resolving a specific issue. Research to date has not demonstrated the reasons for collaboration (Sun et al., 2021). This paper merges public relations and organizational communication scholarship to theorize that MSINs are one way that marginalized groups achieve salience in corporate networks. Stakeholder salience theory (SST) states that corporations balance stakeholder claims using a manager-defined calculus of legitimacy, urgency, and power. Because these attributes are defined by managers in relation to corporate interests, corporations deny legitimacy to historically, socially, and geographically marginalized groups. MSINs that emerge to highlight the needs of these marginalized groups decenter corporations by constraining corporations’ ability to ignore the needs of groups previously dismissed as nonstakeholders. As MSINs become more active within the corporate ecology, they further limit corporate activity and encourage management to not only to see the legitimacy, urgency, and power of emergent stakeholder claims, but to act upon them. Examples in case-based studies illustrate the emergent stakeholder concept.

Exploring Stakeholder Salience Perspective of Firm Reputation: Evidence From Malaysia

This paper aims to explore the components of a firm reputation based on public information disclosure and its relationship with the stakeholder salience model. The firm reputation components are analysed using content analysis of the firm's annual report. The study collects data on the firm reputation components from 200 annual reports of Malaysian public listed companies over a period of 4 years (2016-2019). The results of the study found that there are seven (7) components that can be used to reflect on the firm reputational aspects as disclosed in the firm's annual report. The components include performance, product and service quality, innovation, workplace, governance, citizenship/CSR, and leadership. The findings also reveal three highest components which are product and service quality, performance, and workplace, are supported by the stakeholder salience theory. Our analysis provides evidence that power, legitimacy, and urgency become crucial attributes in determining the key stakeholders of the firms (customers, employees, and shareholders) when the firms have different types of stakeholders. Operatively, our evidence can help regulators, investors and researchers to better understand firm reputational components as per information disclosed by the firms, especially for the firms operating in developing and emerging markets. Further, this study is among the earliest that provide the interrelation between firm reputational dimension and stakeholder salience.

The impact of stakeholder orientation on tax avoidance: Evidence from a natural experiment

AbstractWe study the effect of stakeholder orientation on corporate tax avoidance. Using the staggered passage of constituency statutes across U.S. states between 1983 and 2006, we show that greater stakeholder orientation results in increased tax avoidance. We further find greater tax avoidance among firms with limited financial resources and that employees benefit from the change. Our results are consistent with stakeholder salience theory that resource‐constrained managers prioritize the claims of salient stakeholders, such as employees, at the expense of secondary stakeholders, such as the government.

An Assessment of Water Supply Governance in Armed Conflict Areas of Rakhine State, Myanmar

This study aims to analyze the actors and institutions for public water supply governance in armed conflict areas of Rakhine State, Myanmar. Using Stakeholder Salience Theory and Institutional Analysis of data collected from four participatory workshops and interviews with 160 water stakeholders from the four townships in Rakhine State, the findings revealed that although the water supply system is managed and governed by the state water authorities with the involvement of many administrative, political, and sectoral technical agencies and organizations, the non-formal community organizations such as ethnic armed military and religious institutions also have a strong interest in water supply and are considered dangerous actors in the water supply governance process. Diverse water actors held different perspectives and perceptions of water supply quality and quantity because of their different power holdings and political and economic interests. The state actors seemed biased on their positive performance, demonstrating their satisfaction with the current water supply governance, while community, private sectors, and household water users instead showed their dissatisfaction with the quality and quantity of the current water supply system, but they stayed neutral about the water supply governance performance. The research showed the complexity and dynamics of water actors’ powers and interests in armed conflict areas. In addition, there is a lack of socio-technical and financial capacity for the investment and maintenance of water distribution and collection infrastructure and facility, as well as water quality and quantity monitoring and evaluation. The study appeals to the development and peacebuilding organizations working in conflict areas to promote adaptive governance for community learning and adaptation to social-political and environmental change over time.

The Performance of Environmental and Social Activities in a Crisis

The financial crisis induced by covid-19 pandemic presents a unique exogenous setting to test the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP). We analyze this relationship in the travel and leisure industry, being the most affected during this period, using both stock returns and risk measures. Consistent with stakeholder salience theory, our results suggest that the effect of CSR activities on financial performance depends on the salience of the stakeholders involved. Firms that invest more in activities that benefit the most salient stakeholders (i.e., customers and the environment) have higher stock returns and lower idiosyncratic risk. On the contrary, pre-crisis investments in human rights actions and community engagement are negatively related to firm value. Moreover, we find a concave relationship between CSR and CFP suggesting an optimal level of CSR. These two results provide an explanation for the mixed findings in the literature, in fact, when we exclude the two hypotheses of a contingent and non-linear relationship, we find a neutral relationship, consistent with recent articles

Role of Principles for Responsible Investment in Strengthening Institutional Investors and Its Influ

This research investigates the relationship between climate change disclosure and institutional investors from the perspective of the stakeholder salience theory (Mitchell1997) with particular focus on institutional investors' signing the Principles for Responsible Investment (PRI). Using dataset of 11,862 firm-year from Japan, the empirical results of this paper provide evidence for the following: First, institutional stakeholders' holding ratio has a positive influence on corporate climate change disclosure (power). Second, the the positive influence of the institutional investors is greater when at least 1% of the total share was held by PRI signed institutional investors (legitimacy). Third, the aforementioned relations gained statistical significance gradually during the period of the analysis (urgency). Thus, this research explores contemporary arena for stakeholder salience theory, and addresses the question of whether one of the PRI's goals pertaining to disclosure is realized.

Stakeholder Salience: Corporate Responses During a Public Health Crisis

Prior research provided great insights for crisis management, especially in the cases of accidental crises and preventable crises which are largely within the organization’s control. The COVID-19 pandemic is a public health crisis in which corporates are likely to be perceived as victims. With weak crisis responsibility from the organization, we find that the managerial attention is shifted to increase corporate social responsibility (CSR) which is rarely discussed in the crisis management literature. The purpose of this study is to apply the stakeholder salience theory and explore the factors that contribute to corporate COVID-19 responses during the public health crisis of the COVID-19 pandemic. Built upon the stakeholder salience framework, we propose and test the hypotheses that are derived from societal stakeholders’ power, legitimacy, and urgent claims during the pandemic by utilizing a sample of large public firms in the U.S. We reveal several corporate responses that address multiple stakeholders’ interests, including customers, shareholders, community, suppliers, and employees. Specifically, corporations with a larger number of employees, representing power, and larger social media followers, representing legitimacy, tend to adopt more corporate responses that address various stakeholders’ concerns. However, the extent of the COVID-19 impact on the industries, representing urgency, presents opposite effects of stakeholder salience on corporate responses. In the highly impacted industries, there is an increased influence of social media followers on the customer-related corporate responses; on the other hand, in the same highly impacted industries, there is a decreased influence of employees on the employee-related corporate responses.

Stakeholder salience and environmental stewardship among hotels in Malaysia

PurposeThis study aims to investigate the influence and impacts of stakeholders on the awareness and attitudes towards environmental management practices (EMPs) among hotel managers in Malaysia.Design/methodology/approachA total of 159 hotel managers participated in the survey. Structural equation modelling using the partial least squares (PLS) technique was used to test the hypotheses.FindingsOwners and regulators influence hotel managers' environmental awareness and attitudes and their adoption of EMPs. Managers with a greater environmental awareness are more likely to adopt basic EMPs, while those with a greater environmental attitude are more likely to adopt advanced EMPs. In addition, stakeholder influence on managers' awareness and attitudes differs for hotels with and without an environmental policy.Research limitations/implicationsOther types of accommodation and stakeholders, demographic variations of hotels and different data collection methods could provide additional insights into the hotel sustainability issue.Practical implicationsCoercion may be needed to translate hotel managers' environmental awareness and attitudes into practices. Therefore, regulators should provide rules and penalties to enforce mandatory requirements and incentives to encourage environmental sustainability initiatives.Social implicationsThe joint effort among stakeholders could create a societal norm that appreciates and maintains a sustainable environment and tourism industry.Originality/valueThis study emphasises the importance of stakeholder salience theory to understand the association between stakeholder influence on managers' awareness and attitudes and the adoption of EMPs by hotels in Malaysia. It is one of only a handful of studies that focuses on stakeholders' influence on environmental stewardship from managers' perspectives.

The heterogeneity of institutional investor activists and their counterintuitive tactical interactions

PurposeFollowing the traditions of stakeholder salience theory, this paper aims to contend that some institutional investor activists and tactics have more power, legitimacy and urgency than others.Design/methodology/approachThe author undertakes an empirical test of a saliency table looking at the effects of institutional investor heterogeneity on portfolio firm responses using ordinal logistic regression.FindingsThis study found heterogeneity for institutional investor type to drive firm responses but not tactic type raising the importance of the attributes of each type of investor activist. The author found a rank ordering of public pension plans, hedge funds and then private multiemployer funds in saliency to portfolio firms. In addition, the use of proxy-based tactics did not help or hurt each investor type. Both findings challenge prior empirical work.Originality/valueThe rank ordering based upon the heterogeneity of institutional investor activists and their tactical interactions are tested providing empirical evidence of the most influential activist investors and tactics in one study, which is rare in the literature.

Post-secularism muting controversy: school-NGO interactions in Israel through the prism of stakeholder salience theory

ABSTRACT Elaborating on stakeholder salience theory, this study aims to explore the different agendas and modus operandi of non-governmental organisations (NGOs) within the Israeli public education system. This article is part of a larger study, focused on NGOs that offer services within the secular state education sector in the field of ‘Jewish (religious) identity.’ Through a case study of one such organisation in particular comprised of several units, we attempt to understand the different processes, actors and interests at play, based on data from semi-structured interviews with NGO representatives, school leadership and parents. Using a dynamic view of stakeholder salience theory, we identify the different actors involved and classify their roles in the various relationships. The complex Israeli context and focus on religious NGOs offer us a unique perspective on the role of organisations offering services within the Israeli school system and society in general. We find the expected controversy over these NGOs’ presence in secular schools to have been muted by a convergence of opinions resulting from Israeli ‘post-secularism.’

The Heterogeneity Of Institutional Investor Activists And Their Tactical Interactions

Research Question: Institutional investor activism is a powerful, yet not fully understood phenomenon that has had equivocal findings in prior research. This study introduces a novel theoretical framework that examines the heterogeneity of institutional investor activists and their tactics to elicit positive firm responses from their portfolio firms. Research Findings: I undertake an empirical test of a novel framework looking at the effects of institutional investor heterogeneity on portfolio firm responses using ordinal logistic regression. The author found predicted support for hedge funds and public pension funds to receive favorable firm responses. In addition, private multiemployer funds found support for the counter-intuitively predicted negative favorable responses, and proxy-based tactics negatively impacted the influence of public pension funds. The latter two items are counter to most research. Theoretical Implications: Following the traditions of stakeholder salience theory, the author contends that some institutional investor activists and tactics have more power, legitimacy, and urgency than others. Counter-intuitively, their interaction terms can result in negative, not additive effects as the author incorporates refinements of stakeholder salience theory. Practical Implications: Institutional investors activists may be better served to focus on non-proxy-based activism as proxy-based activism may have inconsequential or negative effects in their attempts to influence portfolio firms.