Does morality explain stakeholders’ reactions to firms’ stakeholder management?
A defining features of stakeholder theory is its argument that business and morality cannot be separated. Moreover, stakeholder theory has long argued that stakeholder-oriented firms will be able to create more value than shareholder-oriented firms by upholding moral standards when managing their stakeholders. However, there is little, if any, empirical evidence about the role morality plays in how stakeholders react to firms’ stakeholder management. We therefore set out to study moral emotions as potential mechanisms explaining the impact of firms’ stakeholder management on stakeholders’ value-creation behaviors. Across two vignette-based experiments and a survey, we show that stakeholder-oriented firms are more likely to elicit value-creation behaviors in their stakeholders because they trigger more positive moral emotions, and that shareholder-oriented firms are less likely to elicit value-creation behaviors because they trigger more negative moral emotions. In addition to contributing to the theoretical development and empirical testing of stakeholder theory by hypothesizing and finding a role for stakeholders’ moral emotions in explaining value creation, we also contribute to making stakeholder theory more amenable to empirical analysis by validating scales to measure firms’ stakeholder and shareholder orientation.
AUTHORS: Flore Bridoux, Corentin Hericher, JW Stoelhorst
Flore Bridoux is a Professor of Stakeholder Management at the Rotterdam School of Management, Erasmus University. She holds a PhD from the Catholic University of Louvain, Louvain-la-Neuve, Belgium. She worked as at Erasmus (Strategic Management Department) from 2007 to 2009 and then at the University of Amsterdam. She came back to Erasmus in August 2019.
Flore’s current research focuses on the management of stakeholders and human capital. In particular, she studies how to organize firms and stakeholder-firm relationships to motivate stakeholders, and employees in particular, to cooperate with the firm and with each other. She is also interested in stakeholders’ reactions to the tradeoffs firms make among the interests of different stakeholder groups and in the dynamics that characterize firms-stakeholders interactions. Her work has been published in, among others, Academy of Management Review, Journal of Management, Journal of Management Studies, and Strategic Management Journal.
She serves as Associate Editor for Organization & Environment, is on the editorial board of the Academy of Management Review and Strategic Organization, and acts as ad-hoc reviewer for many journals and conferences.