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Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?

Author

Listed:
  • Franck Brulhart

    (Aix-Marseille Univ, LEST, CNRS)

  • Sandrine Gherra

    (Montpellier Business School and Montpellier Research in Management)

  • Bertrand V. Quelin

    (HEC Paris)

Abstract

The impact of socially responsible corporate behavior on economic performance is a major preoccupation of managers today. This article explores the links between narrowly defined constructs: stakeholder orientation, environmental proactivity and profitability, from the perspectives of stakeholder theory and resource-based theory. We collected data on the food and beverage, and household and personal products industries. Using structural equation modeling, this paper makes two contributions. We found a negative link between companies simply having a higher stakeholder orientation and profitability. Importantly, however, environmental proactivity not only had a positive impact on profitability, but also appeared to mediate the relationship between stakeholder orientation and profitability. In other words, if a company is more environmentally proactive, it will be more attentive to a broad array of stakeholders, and this will in turn contribute positively to profitability.

Suggested Citation

  • Franck Brulhart & Sandrine Gherra & Bertrand V. Quelin, 2019. "Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?," Journal of Business Ethics, Springer, vol. 158(1), pages 25-46, August.
    • Handle: RePEc:kap:jbuset:v:158:y:2019:i:1:d:10.1007_s10551-017-3732-y
    DOI: 10.1007/s10551-017-3732-y
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    More about this item

    Keywords

    Environmental proactivity; Firm profitability; Resource-based theory; Stakeholder theory; Stakeholder orientation;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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