The Impact of Stakeholder Management on Corporate International Diversification

This article explores the relationship between stakeholder management and international diversification. We differentiate between strengths and concerns in stakeholder management to demonstrate the differential effects of the two aspects of stakeholder management. Previous research on stakeholder theory often focuses on the importance of stakeholder relations, trying to build a business case of relational capital that results from strong stakeholder management. Such a relational approach, however, overlooks the process of managing stakeholders, a process that allows firms with strengths in stakeholder management to develop an important capability of managing tensions. In this study, we argue that this capability, an inherent part of stakeholder management, can be critical when firms face increased complexity during the process of international diversification. We therefore propose that strengths in stakeholder management are positively related to international diversification, while concerns in stakeholder management are negatively related to international diversification. Using panel data for 169 US multinational firms over a 10‐year period, we find support that strengths in stakeholder management facilitate international diversification. We discuss the contributions of our findings to stakeholder theory and international business research.     

The Informal Sector: A Review and Agenda for Management Research

Despite its connotations of non‐compliance, illegality, social exploitation and marginality, the informal sector is a substantial contributor to economic life in developing countries and, increasingly, in more technologically advanced activities. Its prevalence in developed economies has also become more widely recognized. In light of its significance, this paper reviews research on the informal sector from a management and organization scholarship perspective, rather than from an entrepreneurship view, as has been the focus until now. It sets out the atypical management practices that are inherent in the sector, explores the under‐researched relationship between formal and informal firms, and highlights definitional, conceptual and other limitations in extant research. As a step in resolving these issues, the authors present a conceptual model of formality and informality in a three‐dimensional framework that highlights an organizational infrastructure dimension, a view of firms operating along a continuum, and a multi‐level analytical context. Building on this, the authors detail opportunities for enhanced appreciation of in situ management and organizational practices in the informal sector and outline tools for pursuing a management and organization scholarship agenda. Overall, the authors argue that management scholarship has great potential to improve understanding of the informal sector, and that the informal sector provides opportunities to advance management theory, research and practice.     

Why do Emerging Market Firms Engage in Voluntary Environmental Management Practices? A Strategic Choice Perspective

In this paper, we investigate firms’ decisions to engage in voluntary environmental management (VEM) practices within an emerging market context. Drawing on the strategic choice and the resource‐based view perspectives, we report results from a survey of VEM practices – a specific form of self‐governance – drawing on a sample of 519 Turkish firms from various industries to identify important strategic antecedents of firms’ decisions to engage in such practices. We find that as firms become more customer focused, more inclined to pursue a differentiation strategy and subject to a higher level of strategy‐oriented stakeholder focus, they tend to implement higher levels of VEM practices, with important implications for research, policy and practice for both emerging and developed markets.     

Discourses about Righting the Business ← → Society Relationship

This article engages the question—what is the right business‐society relationship? We consider three perspectives that seek to address the relationship: corporate social responsibility (CSR), social entrepreneurship (SE), and conscious capitalism (CC). We take a macroapproach considering how commentary about these approaches establishes a direction for corporate practice and its relationship to key stakeholder groups. We argue that these perspectives are ‘D'iscourses that provide arguments for and articulations about the direction of corporate practice and the business‐society relationship. To organize our review of each perspective, and focus our critique, for each we highlight (a) drivers and influencers, (b) core assumptions and defining features, and (c) approaches and exemplars. Although distinct, all emphasize effective business practices as key to meeting social needs. CSR suggests legitimizing business practice; SE relocates business practices; and CC seeks to reimagine/rehabilitate business for social good. Ultimately, we conclude that these Discourses lack a clear communicative focus in terms of decision making within these organizations. We attend to this and other implications, and offer avenues for further research.     

On the emergence and management of paradoxical tensions: The case of architectural firms

Paradoxical tensions are pervasive and unavoidable in the everyday practice of creativity-based contexts, such as architectural firms. Whilst the existing literature has extensively explored both coping strategies and multiple ways of approaching paradoxical tensions, we still have a limited understanding of how individuals engage with paradoxical tensions and how organizations support their members' efforts to sustain such tensions. Accordingly, my purpose here is to explore paradoxical tensions in the context of architectural firms and explain how firms and their members make sense of these tensions. I use a multiple case study to investigate empirically the salient paradoxical tensions central to architectural firms and to develop an understanding of what makes them salient. I explain how triggers evoke latent tensions and make them salient and also outline salient paradoxical tensions prevalent within this context. In exploring how architectural firms and their members make sense of these tensions, I outline and explain the importance of a paradoxical mindset, a paradoxical practice, and supporting organizational arrangements. I conclude by discussing the interplay among mindsets, practices, and arrangements as an organizing platform—a conceptual framework that future studies could explore further.     

The Bind that Ties: Socioemotional Wealth Preservation in Family Firms

A growing body of research shows that family firms are different from other organizations in significant ways. In this paper we review this literature by examining how family firms differ from nonfamily firms along five broad categories of managerial decisions. These categories encompass a set of key organizational choices concerning management processes, firm strategies, corporate governance, stakeholder relations and business venturing. We argue that socioemotional wealth or affective endowment of family owners explain many of these choices. We also examine some contingency factors (namely family stage, firm size, firm hazard, and the presence of nonfamily shareholders) that moderate the influence of socioemotional wealth preservation as a point of reference when making managerial decisions in family firms. Lastly, we explore the firm performance consequences of family ownership.     

Human Resource Development in SMEs: A Systematic Review of the Literature

Human Resource Development (HRD) in small and medium‐sized enterprises (SMEs) is a significant area of scholarship. However, the cumulativeness of research on HRD in SMEs remains relatively low when compared to HRD generally. This paper reports a systematic literature review (SLR) to synthesise research in this area. A disciplined screening process resulted in a final sample of 117 papers published in 31 journals from 1995 to 2014. The synthesis of these empirical and theoretical studies revealed that: (a) the literature utilises a narrow range of theoretical and conceptual perspectives; (b) HRD is being investigated across a variety of SME contexts, themes and units of analysis; (c) researchers define HRD in multiple ways and use a diverse set of measures of HRD activity; (d) there is significant potential for future research across the SME and HRD disciplines, SME settings and beyond existing theoretical perspectives. We offer suggestions for further advancing the development of this area of research in terms of theory, content and methodology.     

Cross-national differences in firms undertaking innovation initiatives: An application of institutional anomie theory

In this study, we seek to explain why firms' innovations vary across countries. Drawing on institutional anomie theory (IAT), we test cross-level hypotheses related to firm innovation. Specifically, we apply the fundamental tenets of IAT to argue that innovation is an outcome of positive deviance. Further, we posit that some social institutions (e.g., education, polity) may moderate the relationships between extant cultural dimensions such as achievement, uncertainty avoidance, and in-group collectivism and innovation. To empirically explore these possibilities, we leverage data from 26,859 firms in 27 countries. Through the use of Hierarchical Linear Modeling techniques, we reveal significant interaction effects of in-group collectivism and education, uncertainty avoidance and political stability, and in group-collectivism and political stability on cross-national levels of innovation. Finally, we discuss the theoretical and practical implications of this research and describe avenues for future scholarship in this area.     

The Effect of Single Rater Bias in Multi‐Stakeholder Research: A Methodological Evaluation of Buyer‐Supplier Relationships

As the global competitive landscape intensifies, firms have looked to their supply chain organizations to improve cost, visibility, and cycle time performance across functions, products, and markets. As a result, the scope of supply chain related operations have increasingly cut across organizational boundaries. To understand and capture such cross‐organizational activities, researchers have broadened the focus of their studies and included multiple stakeholders in their analysis (e.g., integration, sustainability, and buyer‐supplier relationships). However, multi‐stakeholder research has also increased the complexity and effort required to conduct studies across organizational boundaries. Unfortunately, many studies that use multi‐stakeholder constructs fail to fully address their multi‐sided nature during both construct conceptualization and data collection. Several studies suggest that neglecting the multi‐sided nature of certain constructs can affect the research validity and reliability and may invalidate research inferences and results, although such concerns have not been empirically demonstrated. The current study addresses this gap by performing a series of tests using data from 105 matched pairs of buyers and their suppliers to illustrate key methodological considerations for conducting multi‐stakeholder research. This study also offers practical guidance regarding assumptions routinely made in single rater research and proposes when single rater data may be appropriate for multi‐stakeholder research.     

Innovation with field experiments: Studying organizational behaviors in actual organizations

Organizational scholarship centers on understanding organizational context, usually captured through field studies, as well as determining causality, typically with laboratory experiments. We argue that field experiments can bridge these approaches, bringing causality to field research and developing organizational theory in novel ways. We present a taxonomy that proposes when to use an audit field experiment (AFE), procedural field experiment (PFE) or innovation field experiment (IFE) in organizational research and argue that field experiments are more feasible than ever before. With advances in technology, behavioral data has become more available and randomized changes are easier to implement, allowing field experiments to more easily create value—and impact—for scholars and organizations alike.     

Sourcing Strategy,Supplier Relationships and Firm Performance: An Empirical Investigation of UK Organizations

This article conceptualizes and empirically examines buyer–supplier relationships in respect of supply sourcing strategies, relationship characteristics and firm performance. Two sourcing strategies available to organizations are examined, critical and leverage, which in turn, influence the approach to managing the supplier relationship (arms‐length or collaborative). We argue that different relationship approaches are appropriate to achieving different performance outcomes. A structural equation model, using a sample of 142 manufacturing firms based in the United Kingdom, is used to test this hypothesized model. The results indicate that a critical sourcing strategy requires collaborative supplier relationships in order to achieve higher relationship and business outcomes, while leverage sourcing strategies have a direct impact on these same performance outcomes. In addition, a leverage strategy was associated with increased levels of supplier power, though this power was found not to have a significant effect on performance. Our study provides support for the importance of aligning sourcing strategies to particular supplier relationship approaches in order to improve firm performance. Managerial implications of these findings and future directions for research are then offered.     

Paradoxes and Dual Processes: A Review and Synthesis

Paradox and dual‐process theories are used by management and organization researchers in studying a variety of phenomena across a wide range of management sub‐fields. Cognition is a focal point of both of these theories. However, despite their growing importance and shared areas of inquiry, these two theories have developed largely in isolation from each other. To address this lack of integration, the authors conducted a review and synthesis of relevant aspects of the paradox and dual‐process literatures. Focusing bidirectionally on how paradox theory informs dual‐process theory and how dual‐process theory informs paradox theory, they highlight the ‘nestedness’ of intuition and analysis in paradox (a paradox within paradoxical thinking). On the basis of the review and synthesis, they identify four themes (epistemological and ontological assumptions in the relationship between intuition and analysis; psychological and psychometric issues in the relationships between intuition and analysis; managers’ experiences of tensions between intuition and analysis; managers’ approaches to tensions between intuition and analysis) and introduce an integrative framework that assimilates these two perspectives and sets out an agenda for future research and implications for management.     

Socially Responsible Practices: An Exploratory Study on Scale Development using Stakeholder Theory

Socially responsible practices of firms have evolved into an important area of research in operations management; however, it remains challenging to identify specific scales that capture multiple dimensions of such social practices. In this exploratory study, we use stakeholder theory to develop new multi‐item measurement scales linked to multiple groups (i.e., internal, supplier, customer, and community stakeholders). Furthermore, we empirically test a higher order multidimensional construct that collectively assesses the socially responsible practices of a firm. Using these stakeholder‐derived constructs as taxons in a cluster analysis, we identify important patterns in the way that multiple groups of stakeholders are engaged. Finally, we demonstrate that the set of social practices are complementary and concentrating on one group can yield spillover effects to other specific stakeholder groups.     

From I-O Economics' S-C-P Paradigm Through Strategic Groups to Competence-Based Competition: Reflections on the Puzzle of Competitive Strategy

Over the past 20 years one basic question which has occupied the attention of both researchers and practitioners in the strategic management field is ‘with whom and how do firms compete?’ How research in strategy has attempted to answer this question over the past 20 years is the subject of this article. We begin by reviewing the literatures on industrial organization, spatial competition, strategic groups, cognitive communities and networks and examine how each of these theoretical perspectives have been used to answer basic questions of competition and rivalry. We then show how the resource-based view of the firm and the theory of competence-based competition can be used to integrate these perspectives. We conclude by proposing six issues which should motivate future strategy research, and which can help and enhance our understanding of how firms compete.     

Managing stakeholder pressures: Toward a typology of corporate social performance profiles

Why do some firms ignore some stakeholders while courting others? We propose two key drivers of firms' social postures and derive from this analysis a novel typology of corporate social performance (CSP) profiles. Although we expect that other drivers exist, we argue that a useful starting point for understanding any given CSP profile is to consider the pressure exerted on an organization by its stakeholders in conjunction with its level of resource endowment. Our preliminary typology identifies six distinct CSP profiles that reflect different opportunities and risks for stakeholder management: the CSP Vanguard, Opportunist, Generalist, Minimalist, Specialist, and Laggard. All else equal, the first two CSP profiles imply more nonmarket opportunities than risk, whereas we expect Laggards and Specialists to face greater risk in their responses to social and environmental issues. According to our framework, Generalists and Minimalists probably operate between these two extremes of business risk. Our conceptual analysis seeks to advance research and practice for more strategic stakeholder management.     

Exploring the Impact of Social Axioms on Firm Reputation: A Stakeholder Perspective

This study proposes a model of how deeply held beliefs, known as ‘social axioms, moderate the interaction between reputation, its causes and consequences with stakeholders. It contributes to the stakeholder relational field of reputation theory by explaining why the same organizational stimuli lead to different individual stakeholder responses. The study provides a shift in reputation research from organizational‐level stimuli as the root causes of stakeholder responses to exploring the interaction between individual beliefs and organizational stimuli in determining reputational consequences. Building on a conceptual model that incorporates product/service quality and social responsibility as key reputational dimensions, the authors test empirically for moderating influences, in the form of social axioms, between reputation‐related antecedents and consequences, using component‐based structural equation modelling (n = 204). In several model paths, significant differences are found between responses of individuals identified as either high or low on social cynicism, fate control and religiosity. The results suggest that stakeholder responses to reputation‐related stimuli can be systematically predicted as a function of the interactions between the deeply held beliefs of individuals and these stimuli. The authors offer recommendations on how strategic reputation management can be approached within and across stakeholder groups at a time when firms grapple with effective management of diverse stakeholder expectations.     

From Temporary Competitive Advantage to Sustainable Competitive Advantage

Both industrial organization theory (IO) and the resource‐based view of the firm (RBV) have advanced our understanding of the antecedents of competitive advantage but few have attempted to verify the outcome variables of competitive advantage and the persistence of such outcome variables. Here by integrating both IO and RBV perspectives in the analysis of competitive advantage at the firm level, our study clarifies a conceptual distinction between two types of competitive advantage ? temporary competitive advantage and sustainable competitive advantage ? and explores how firms transform temporary competitive advantage into sustainable competitive advantage. Testing of the developed hypotheses, based on a survey of 165 firms from Taiwan's information and communication technology industry, suggests that firms with a stronger market position can only attain a better outcome of temporary competitive advantage whereas firms possessing a superior position in technological resources or capabilities can attain a better outcome of sustainable competitive advantage. More importantly, firms can leverage a temporary competitive advantage as an outcome of market position to improving their technological resource and capability position, which in turn can enhance their sustainable competitive advantage.     

Informality and Formality in Medium‐sized Companies: Contestation and Synchronization

Accounts of managerial practice in small and medium‐sized firms frequently draw upon notions of formality and informality. In this paper, we explore the relationship between these concepts through an analysis of managerial approaches to employment relations practice in six growing, medium‐sized organizations. Drawing on recent conceptual work on informality and formality, we argue that the use of the terms in previous analyses tends to neglect the co‐dependency of both the concepts and managerial approaches to the employment relationship. We present an alternative conceptualization of formalization and informalization processes that emphasizes synchronization through interactional practices. Through this analysis, we suggest that debate in this area can be reframed through thinking of informality and formality as a dualism rather than a dichotomy, and challenge the notion that small firms must, should or inevitably do move from informality to formality. From this, we construct an inclusive model of formality and informality that better reflects practice and enables further analytical development.     

Confucian Stakeholder Theory: An Exploration

Originated in the West, stakeholder theory is normatively anchored in Western value systems. Differences in value orientations and ethical systems in this global age call for culturally pertinent stakeholder theory. In this article, we argue that Confucianism forms an additional normative basis for stakeholder theory, appropriate for a Confucian context. We demonstrate it through application of Confucianism in major stakeholder relationships. The Confucian stakeholder theory provides a meaningful addition to the corpus of stakeholder literature.