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Is stakeholder orientation relevant for European firms?

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  • Patel, Vijay K.
  • Manley, Scott C.
  • Hair, Joseph F.
  • Ferrell, O.C.
  • Pieper, Torsten M.

Abstract

Stakeholder theory suggests firms should be sensitive to a broad group of stakeholders and their needs, with balanced trade-offs that are fundamental to achieving sustainable competitive advantage, and ultimately survival. Market orientation (MO) scholars also consistently call for inclusion of a broader group of stakeholders than the widely studied customer and competitor groups to better understand the impact of multiple stakeholders on firm performance. In response, this study expands the traditional domain of MO and defines overall stakeholder orientation as including customers, competitors, employees and shareholders, designating them as ‘core and essential stakeholders.’ Scholars have also advocated the inclusion of more forward-looking, proactive considerations in the conceptual framework to complement the usual responsive aspects of MO. Measures for both proactive and responsive orientations for the four core stakeholder groups, representing overall stakeholder orientation, were developed and validated. Findings show that for European firms proactive considerations are potentially more impactful than responsive, and overall stakeholder orientation is a significant predictor of improved financial and non-financial performance.

Suggested Citation

  • Patel, Vijay K. & Manley, Scott C. & Hair, Joseph F. & Ferrell, O.C. & Pieper, Torsten M., 2016. "Is stakeholder orientation relevant for European firms?," European Management Journal, Elsevier, vol. 34(6), pages 650-660.
    • Handle: RePEc:eee:eurman:v:34:y:2016:i:6:p:650-660
    DOI: 10.1016/j.emj.2016.07.001
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    Cited by:

    1. Egidio Riva & Mario Lucchini, 2018. "Firm performance: taxonomy of European companies using self-organizing maps," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(1), pages 457-477, January.
    2. Qitong Yu & Zili Lin & Chang Deng, 2018. "Executive Incentives and Maximization of the Value of Stakeholders ¡ª¡ªRegulating Effects Based on the Independent Director," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(9), pages 1-46, September.
    3. Danso, Albert & Adomako, Samuel & Lartey, Theophilus & Amankwah-Amoah, Joseph & Owusu-Yirenkyi, Diana, 2020. "Stakeholder integration, environmental sustainability orientation and financial performance," Journal of Business Research, Elsevier, vol. 119(C), pages 652-662.
    4. Tobias Rebs & Daniel Thiel & Marcus Brandenburg & Stefan Seuring, 2019. "Impacts of stakeholder influences and dynamic capabilities on the sustainability performance of supply chains: a system dynamics model," Journal of Business Economics, Springer, vol. 89(7), pages 893-926, September.
    5. Sarstedt, Marko & Hair, Joseph F. & Cheah, Jun-Hwa & Becker, Jan-Michael & Ringle, Christian M., 2019. "How to specify, estimate, and validate higher-order constructs in PLS-SEM," Australasian marketing journal, Elsevier, vol. 27(3), pages 197-211.
    6. Marina Gigliotti & Andrea Runfola, 2022. "A stakeholder perspective on managing tensions in hybrid organizations: Analyzing fair trade for a sustainable development," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3198-3215, November.
    7. Fatma Sonmez Cakir & Zafer Adiguzel, 2020. "Analysis of Leader Effectiveness in Organization and Knowledge Sharing Behavior on Employees and Organization," SAGE Open, , vol. 10(1), pages 21582440209, March.

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