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We introduce a novel stakeholder-oriented framework that highlights variance in the application and expression of gender bias in the upper echelons. Directed by their relationship with the firm's leadership, we theorize that stakeholders' appraisals of top female leaders map onto a categorical and complex continuum. At the "categorical" end of this continuum, stakeholders neither have access nor are attentive to capability cues from the leader, increasing their reliance on stereotypes and gender biases in their leader evaluations. At the "complex" end of the continuum, stakeholders have access and are attentive to capability cues from the leader, decreasing their reliance on stereotypes and increasing their ability to accurately evaluate the leader. Between these ends, stakeholders evaluate female leaders by applying stereotypes and striving for accuracy to varying degrees. Each region on this continuum is linked to an array of behavioral responses, directed by stakeholders toward a target leader, that differ in valence and intensity. Our framework has significant implications for understanding a variety of social biases beyond gender, and enables the development of tailored strategies that can be used to facilitate accurate leader evaluations by all stakeholders. [ABSTRACT FROM AUTHOR]

We develop a stakeholder theory of corporate governance grounded in classical property rights theory, adopting the view that governance should help free individuals to maximize their collective welfare. In contrast to the agency view of corporate governance, we submit that the central problem in corporate governance is to devise coalitional contracting solutions to the collective action problems inherent in team production and team innovation. Agency problems and other contracting problems resulting from shirking, hold-up, market power, and externalities are best understood in this context. We develop design principles for the allocation of property rights to mitigate each of these contracting problems by reducing stakeholders' vulnerabilities to opportunistic behaviors. We extend earlier efforts to build a stakeholder theory of corporate governance by considering a more comprehensive set of transaction problems and analyzing the comparative efficiency of different governance arrangements for different types of firm–stakeholder relationships and different economic contexts. One conclusion from our theory is that giving primacy to shareholders, or any other group of stakeholders, is a comparatively inefficient solution to governing the modern global and knowledge-driven corporation. We discuss the implications of our theorizing for the debate about the purpose of the firm. [ABSTRACT FROM AUTHOR]

The article offers a comment on the article "Where do stakeholders come from?, " by Sharon A. Alvarez and Sybille Sachs, which appeared within the issue. The authors feel that stakeholder composition is a dynamic process that is generated through the actions of entrepreneurs. They suggest that the strategic management approach is limited and does not take into account the dynamic nature of stakeholder generation. The authors then present an entrepreneurial perspective on stakeholder theory, describing the bidirectional generation of stakeholders and the role of entrepreneurial choice in the formation of a firm's stakeholder composition.

Recent developments in stakeholder theory have refined our understanding of value creation via bilateral reciprocity. Generalized exchange is another important microfoundational mechanism in value creation, but because of the potential for free-riding it is surprising that some stakeholders contribute more resources to a firm's value-creating nexus than would be expected based on contractual obligations, and even beyond what bilateral reciprocity would predict. This paper aims to identify the minimum conditions that promote generalized exchange in a firm's value-creating nexus. Because generalized exchange is causally complex—it can occur in multiple contexts and through various combinations of explanatory factors—a configurational theorizing approach is applied. We identify four combinations of attributes that consistently promote generalized exchange and limit free-riding behavior, such that generalized exchange can make a net positive difference in a firm's nexus: the entrepreneurial logic (high rewards, strong institutional drivers), the conformity logic (powerful sanctions, strong institutional drivers), the influencer logic (powerful sanctions, individual or firm drivers), and the identification logic (high rewards, individual or firm drivers). This work provides an important additional explanation for why stakeholder-oriented firms tend to have higher performance, and can also help managers devise policies for increasing the amount of generalized exchange exhibited among their firm's stakeholders. [ABSTRACT FROM AUTHOR]

Capitalism works when actors are motivated to engage in joint value creation. Stakeholder theorists have long argued that this is most likely when firms “manage for stakeholders,” but have only recently explicitly recognized that stakeholders engaged in joint value creation face collective action problems: situations in which stakeholders may be tempted to pursue their own interest at the expense of maximizing joint value creation. We build on the work of Elinor Ostrom on solving collective action problems to develop theory about how to govern joint value creation when managing for stakeholders. Specifically, we use Ostrom’s design principles to contrast the hub-and-spoke form of governance central to much of the stakeholder literature with two alternative governance forms (lead role governance and shared governance) that we derive from Ostrom’s work, and we discuss the comparative effectiveness of these three governance forms as depending on the nature of the joint value creation activities. Our work contributes to stakeholder theory as an integrative perspective on the role of management and governance in fostering cooperation in modern capitalist systems, where joint value creation increasingly involves stakeholders outside the boundaries of the firm as traditionally understood. [ABSTRACT FROM AUTHOR]

For better or for worse, one stakeholder's utility derives in part from their perceptions of how other stakeholders are being treated by the business. Yet, to date, the stakeholder literature has not explained well what stakeholders are actually looking for in a business's treatment of other stakeholders. We allow for and help explain an emerging view in the literature whereby stakeholders might be looking out for each other's interests, but we round out that view by also allowing for and explaining a different kind of possibility, whereby stakeholders disapprove of the favorable treatment of others or approve of their unfavorable treatment. Our model details how the other stakeholder serves three different roles with respect to the focal stakeholder's utility: (a) as a symbolic representation of the values the business prioritizes--especially compared to the focal stakeholder's own worldview, (b) as a referent for interpersonal equity comparisons, and (c) as either a perceived competitor for or facilitator of resources. We describe these three roles and then show how they interrelate in a process model. In doing so, we provide a more detailed and complete understanding of stakeholder utility than currently exists in the literature. [ABSTRACT FROM AUTHOR]

We conceptualize divestitures as a costly alternative to the internal resolution of conflicts among stakeholders, albeit one that avoids the more costly liquidation of the firm. In firms that have lower stakeholder orientation (defined as the extent to which management focuses attention on and integrates the interests of multiple stakeholders in its decision-making), divestitures will be less costly than the internal resolution of stakeholder conflicts, while the opposite will be true in firms that have higher stakeholder orientation. Consistent with this argument, we document a negative relationship between stakeholder orientation and divestiture activity, using a unique dataset of 909 U.S.-based, publicly listed firms from 2002 to 2015. This negative relationship is more pronounced for selloffs than for spinoffs, for selloffs of businesses that are unrelated to or located far from the divesting firm, and for selloffs to acquirers that are not alliance partners of divesting firms. The core contribution of this paper is to treat different types of divestitures as increasingly costly responses to conflicts among stakeholders, thereby populating the theoretical middle ground between negotiated adaptations of firms' governance structures and total firm failure. In so doing, this paper contributes to research at the intersection of stakeholder theory and corporate strategy. [ABSTRACT FROM AUTHOR]

Digitalization is typically seen as an operational or strategic issue. We go beyond such a view and present findings suggesting that digitalization may also affect how people relate to a firm. The guiding intuitions of our research are that digitalization may impede firm anthropomorphization—that is, the attribution of humanlike capacities of mind ("agency" and "experience") to firms—which may affect stakeholder relations. Specifically, we suspect that digitalization is likely to undermine a firm's ability to establish and maintain the sort of communal (trusting and cooperative) relations that stakeholder theory sees as crucial for value creation. We find support for these intuitions in four experimental studies (total n = 819): people attribute less experience (but not less agency) to more digitalized firms and this reduces their willingness to affiliate with, trust, or enact prosocial behavior toward such firms. We also find that these effects are stronger for communally oriented respondents, and that one reason that people are less inclined to enter into a relationship with a more digitalized firm is that they believe that this will make it more difficult to enact communal behaviors. Together, our findings suggest that firm digitalization may, ceteris paribus, undermine firms' ability to generate value. [ABSTRACT FROM AUTHOR]

In this Exchange, we consider three crucial boundary conditions that Barnett, Henriques, and Husted (2020) overlooked in theirmodel of diminished stakeholder influence. Although we agree that socialmedia platforms haveweakened stakeholder influence in certain conditions, such is not the case for all firms, all stakeholders, or all situations. Drawing from sociocognitive and self-determination theories, we contend that (a) independent, owner-managed small firms present a context wherein information overload is rendered less of an issue because the information about the firmismore salient to locals; (b) stakeholders can bemotivated to influence firms via social media platforms, which facilitate the collective engagement of local community members; and (c) uncertain economic circumstances (e.g., COVID-19) activate stakeholder information searches, which often occur through social media. Together, these three conditions enhance stakeholder power and influence. We also contemplate how, even under these conditions, stakeholder influence may change over time vis-a-vis the issue-attention cycle and societalization. We conclude our Exchange with a call formore research on stakeholder influence over independent, owner-manager small businesses. [ABSTRACT FROM AUTHOR]

This study examines how target corporate social responsibility affects the economic gains for acquirers, as reflected in market reaction to an acquisition announcement, from two distinct perspectives: stakeholder preservation versus stakeholder appropriation. The stakeholder preservation perspective suggests that positive market reaction to an acquisition stems from potential new value creation by honoring implicit contracts and maintaining good relationships with target stakeholders. By contrast, the stakeholder appropriation perspective posits that positive market reaction is primarily derived through wealth transfer to acquirers by defaulting on implicit contracts with target stakeholders. Using a data set of acquisitions in the United States, we find that target corporate social responsibility is positively associated with acquirer abnormal returns upon an acquisition announcement. Moreover, stakeholder value congruence between the merging firms strengthens this positive relationship, whereas business similarity between them weakens it. These findings align with the stakeholder preservation perspective and challenge the stakeholder appropriation perspective. [ABSTRACT FROM AUTHOR]

How should managers deliberate, and how do we teach them to do so? How one evaluates managerial decision making will partly depend on what conception of the corporate function one endorses. Agency Theory and its accompanying shareholder conception of the corporate function has long dominated management. Voices in management learning have called for a change, but we argue that such change has been hampered by the lack of a theory of managerial deliberation, which is compatible with the alternative stakeholder conception of the corporate function. Here, we develop a novel theory of managerial deliberation: one that is suited to stakeholder theory. We argue that if genuine ethical deliberation is to become prevalent within management, then we must conceive of managerial deliberation as a creative, yet rational, learning process, while we assure that this process is adequately constrained to allow for managerial accountability. By taking inspiration from modern philosophical theories of deliberation, we provide such a theory of rational managerial deliberation. [ABSTRACT FROM AUTHOR]

The authors discuss why a theory of stakeholder governance is required and difficulties in coming about with such a theory. They comment on the importance of corporate governance and research into it based in agency theory. They talk about how governance should not just be between companies and shareholders, but also with its multiple stakeholders, and mention how the COVID-19 epidemic has accentuated this requirement.

Positive societal change happens when community members, supporters, and entrepreneurially minded agents come together to aggregate resources and build new capacities. To explain and inform how societal impact happens across categories of stakeholders, we set forth an integrative framework of civic wealth creation to account for the social, economic, and communal endowments generated by local communities. Our framework shifts the conversation to a "civic" level of analysis that captures the variety of local settings where many societal change initiatives take place—in neighborhoods, villages, and communities where the people who are being helped are intimately involved in creating and implementing the solutions. Civic wealth extends beyond the material resources and physical assets of a community to include intangibles such as health, happiness, and social justice. We draw attention to the importance of citizen engagement and entrepreneurial commerce in the discourse surrounding contemporary societal change efforts. The civic wealth creation framework offers scholars and practitioners across disciplines a new lens through which to view societal impact. [ABSTRACT FROM AUTHOR]

Reputation is not always a "good thing." Despite the established benefits of a good reputation, recent research has elucidated the burdens and liabilities it can bring about, particularly following a crisis or stakeholder disappointment. However, managers spend much of their time avoiding such extreme events rather than responding to them, and we know very little about how reputation influences managers' everyday decisions. We address this issue by offering a theoretical framework to explain how reputation shapes managers' perceptions of their discretion as they attempt to navigate stakeholder expectations. In doing so we clarify and elaborate two forms of reputation—those rooted in a firm's behaviors and those rooted in a firm's outcomes—as well as two forms of discretion—managers' perceived latitude of actions and their perceived latitude of objectives—thereby synthesizing and extending recent work in both the reputation literature and discretion literature. The intersection of social evaluations and managerial decisions remains an exciting and fruitful avenue of research, and we aim to illustrate how the insights from the meticulous efforts of scholars in both fields would benefit from further cross-pollination. [ABSTRACT FROM AUTHOR]

Online communities are an increasingly relevant yet relatively underexamined stakeholder group for firms. I argue that firms may garner distinct competitive advantages from engaging with online communities. Drawing on social capital theory and stakeholder theory, I examine the benefits, tactics, and firm attributes that underlie a positive relationship between firm engagement in an online community and firm performance. In so doing, I develop a theory pertaining to online community advantage, which both accounts for the information, influence, and solidarity benefits that flow to firms from firm engagement in an online community and highlights the firm tactics and attributes associated with the generation of such benefits. [ABSTRACT FROM AUTHOR]

Instrumental stakeholder theory considers the performance consequences for firms of highly ethical relationships with stakeholders, characterized by high levels of trust, cooperation, and information sharing. While research suggests performance benefits, an obvious question remains: If instrumental stakeholder theory–based stakeholder treatment is so valuable, why isn’t it the dominant mode of relating to stakeholders? We argue that the existing instrumental stakeholder theory literature has three shortcomings that limit its ability to explain variance in performance. (1) Little theory exists around how instrumental stakeholder theory–based stakeholder management could provide sustainable competitive advantage. (2) The literature has largely neglected the potential downsides (i.e., costs) associated with pursuing these sorts of stakeholder relationships. (3) There is a paucity of theory on the contexts in which the incremental benefits of instrumental stakeholder theory–based stakeholder relationships are most likely to exceed the costs. As our primary contribution, we develop a theoretical path from a communal sharing relational ethics strategy—characterized by an intention to rely on relational contracts, joint wealth creation, high levels of mutual trust and cooperation, and communal sharing of property—to a close relationship capability, which we argue is valuable, rare, and difficult to imitate and, thus, a potential source of sustainable competitive advantage. We also consider the potential costs of achieving this capability and identify contexts in which the resulting relationships are likely to have the greatest net value. [ABSTRACT FROM AUTHOR]

The resource-based view posits that firms achieve competitive advantage from value creation through firm-specific investments held by key stakeholders: employees, suppliers, and customers. Shareholder-dominant (agency) theory holds that all aresidual income claimant rights belong to shareholders, circumscribing other key stakeholders' ability to appropriate value from their investment. However, recent enhancements to stakeholder theory grounded in property rights suggest that such stakeholders may need protection for implicit residual claims. A central purpose of this article is to build a model of the protection devices used to ensure these implicit rights. Individual ex ante devices such as stakeholder ownership only partially incentivize stakeholders' firm-specific investments because they are subject to two types of uncertainties-behavioral and environmental- and individual devices aimed at reducing one type of uncertainty may exacerbate the other. We therefore expand on efforts to establish a stakeholder theory of strategic management by proposing an integrated model of protection devices,which seeks to overcome the incentive dilemma in reducing both uncertainties by reducing barriers to stakeholder firm-specific investment. Our model also explores the conflicts and complementarities associated with device implementation. Finally, we discuss theoretical and practical implications, as well as future research opportunities associated with our model. [ABSTRACT FROM AUTHOR]

Firms use reference points to evaluate financial performance, frame gain or loss positions, and guide strategic behavior. However, there is little theoretical underpinning to explain how social performance is evaluated and integrated into strategic decision making. We fill this void with new theory built on the premise that inherently ambiguous social performance is evaluated and interpreted differently than largely clear financial performance. We propose that firms seek to negotiate a shared social performance reference point with stakeholders who identify with the organization and care about social performance. While incentivized to align with the firm, firm-identified stakeholders provide intense feedback when there are major discrepancies between their expectations and the firm's actual social performance. Firms frame and respond to feedback differently depending on the feedback valence: negative feedback will be framed as a legitimacy threat, and firm responses are likely to be substantive; positive feedback will be framed as an efficiency threat, and firm responses are likely to be symbolic. However, social enterprises face a double standard in evaluations and calibrate responses to social performance feedback differently than do nonsocial enterprises. Our behavioral theory of social performance advances knowledge of organizational evaluations and responses to stakeholder feedback. [ABSTRACT FROM AUTHOR]

Grand challenges are among the most complex problems for modern societies. Many governments and foundations provide substantial resources to encourage the search for solutions. Due to the significance of these problems, organizations often form partnerships in what we call search consortia to engage in joint search and compete for funding. Prior research on joint search highlights the role of specialized organizations, mainly regarding technological domains, to identify a superior solution. However, stakeholder theory leads us to believe that the success of any solution depends on the acceptance and support of important stakeholders. In this study, we suggest that search consortia are more likely to receive funding when they include representatives of stakeholder concerns, so-called advocacy groups. We extend theory on coordinated exploration in joint search by integrating mechanisms from stakeholder theory and argue that advocacy groups improve the generation of potential solutions and provide legitimacy. We test our theory with a unique dataset of 35,249 consortia that proposed solutions to 2,349 grand challenge problems as part of a large European funding program. Our results show that advocacy groups benefit search consortia, particularly when consortia exhibit a high dispersion of technological knowledge and when they are inexperienced. [ABSTRACT FROM AUTHOR]

Can firms deceive their stakeholders, by failing to deliver on their commitments to undertake sustainability practices without being detected? Extant theory posits that, due to information asymmetry, stakeholders struggle to comprehend the actual change in firms' practices. In contrast, we advance a cognitive-linguistic perspective to explain why stakeholders are sometimes misled. Accordingly, we propose that firms' deception does not appear in the content of their communication, but in its linguistic properties, which derive from how managers cognitively construe the sustainability challenge. Thus, firms cover the same points of content in their reports, but firms that practice what they preach use more complex styles of language than do firms that decouple their action from their statements. Moreover, we theorize that generalist stakeholders and stakeholders with conflicts of interest are unable to detect these linguistic nuances, whereas specialist stakeholders can. We find evidence for this cognitive-linguistic perspective in a textual analysis of grammatical structure in 261 interviews conducted in a large field study of 12 multinational corporations and their stakeholders. This lens advances our understanding of how firms deceive and how stakeholders can detect such deception and opens a new and promising avenue for research on firm-stakeholder relations. [ABSTRACT FROM AUTHOR]

Social welfare, or the good society, is of central concern to the Academy of Management. We begin by observing that, in theory and practice, social welfare appears to be a multifarious, multidimensional, pluralistic concept. In light of this, we develop an account of a multiobjective corporation as a means for enabling a greater range of management decisions so as to permit more direct corporate engagement in the diverse goals of various stakeholders. In the course of doing this, we critique aspects of single-objective theories of corporate function and argue that a key objection to multi-objective views can be avoided. Our analysis is built on a stakeholder agency framework wherein corporate actions reflect the outcome of an intracorporate "marketplace." We suggest that improvements in social welfare are more likely when intracorporate markets among stakeholders can operate unconstrained by some single-valued objective. [ABSTRACT FROM AUTHOR]

Firms play a crucial role in furthering social welfare through their ability to foster stakeholders' contributions to joint value creation-value creation that involves a public good dilemma arising from high task and outcome interdependence-leading to what economists have labeled the "team production problem." We build on relational models theory to examine how individual stakeholders' contributions to joint value creation are shaped by stakeholders' mental representations of their relationships with the other participants in value creation, and how these mental representations are affected by the perceived behavior of the firm. Stakeholder theorists typically contrast a broadly defined "relational" approach to stakeholder management with a "transactional" approach based on the price mechanism-and argue that the former is more likely than the latter to contribute to social welfare. Our theory supports this prediction for joint value creation but also implies that the dichotomy on which it is based is too coarse grained; there are three distinct ways to trigger higher contributions to joint value creation than through a transactional approach. Our theory also helps explain the tendency for firms and their stakeholders to converge on transactional relationships, despite their relative inefficiency in the context of joint value creation. [ABSTRACT FROM AUTHOR]

We submit that the central managerial messages of transaction cost economics (TCE) have been lost or misconstrued in academic debates that miss the underpinning logic of the theory. Critiques of TCE are often based on narrow and selective interpretations, indeed caricatures. Our goal is to set the record straight by examining TCE's fundamentally constructive aims, logic, and its applicability in the classroom. Looks can be deceiving: While TCE candidly acknowledges that bad things sometimes happen, the main message is not only constructive and positive, but also consistent with a stakeholder theory of management. Indeed, we maintain that TCE can be applied as a constructive stakeholder theory. [ABSTRACT FROM AUTHOR]

Scholars have long studied technology evolution. More recently, organizational theorists have begun to explore the role of categories and their associated labels in industry dynamics. Yet little is known about how technological designs and categories coevolve. We build on these two bodies of literature to develop an integrative model of how industries emerge and evolve. We propose that the evolution of both technological designs and categories follows a similar pattern, characterized by an early period of divergence followed by a period of convergence, and we identify the mechanisms that account for this coevolutionary process. We add to the literature on technological evolution by explicating the mechanisms through which designs evolve and identifying how different stakeholders' categorical understandings shape design competition. Our model also augments the categorization literature by detailing categorical evolution as a contested process of category creation and selection, which, in turn, is influenced by the designs that the categories are trying to group. Our model creates a much needed bridge between two bodies of literature that, while addressing similar topics, have evolved largely separately. [ABSTRACT FROM AUTHOR]

We employed a longitudinal, grounded-theory approach to investigate the occurrence of an identity crisis in an emerging collective of organizations attempting to form a new academic field. The findings indicate that legacy identities and the nested structure of such organizations have implications for the formation of identity at this level. Specifically, the co-evolution of organization-level and collective-level identities, and the interdependencies between the levels, rendered the collective identity formation process as multiphased, complex, contentious, and continuously precarious--ultimately leading to an identity crisis that was resolved not by arriving at a "consensual identity," but, rather, a "coherent identity." The findings contribute to the nascent stream of literature on collective identity beyond the organizational level by explicating identity-work processes involved in the precipitation, manifestation, and resolution of an identity crisis in an emerging field. [ABSTRACT FROM AUTHOR]

The construct of responsible leadership has gained considerable traction in contemporary management scholarship. Yet defining and operationalizing how responsible leadership manifests in organizational outcomes has posed challenges. In this paper, we draw from stakeholder theory to offer a more fully formed view of how responsible leadership influences organizational processes and outcomes. We provide descriptions of two distinct pathways through which leaders and their organizations exhibit and project their responsible leadership behaviors and actions: psychological and knowledge-based. We suggest that these two pathways constitute process mechanisms that advance and disseminate specific signals and messages and, ultimately, actions and outcomes. We provide brief illustrations of three companies and their leaders to underscore the potential of our framework. We conclude with implications for research and practice. [ABSTRACT FROM AUTHOR]

This article serves as an overview of the articles included in this symposium as well as a consideration of how the topic of responsible leadership can be framed in terms of research directions. Specifically, we focus on how the included articles bring attention to the theoretical divergence within the literature. To help address the variations of responsible leadership theories, we identify five areas in need of further research: (1) responsible leadership processes and outcomes, (2) stakeholder priorities, (3) training and development, (4) globalization and macro-level forces, and (5) measurement and assessment. In our discussion of each area, we elaborate by referring to other articles in the symposium, and we provide examples of specific issues that challenge responsible leadership research and implementation. Additionally, because responsible leadership concerns both the micro and macro levels of analysis, our discussion considers individuals, groups, and organizations. [ABSTRACT FROM AUTHOR]

As a new perspective for understanding firm responsiveness to stakeholder concerns, we propose a strategic cognition view of issue salience-that is, the degree to which a stakeholder issue resonates with and is prioritized by management. Specifically, we explain how a firm's cognitive structures of organizational identity and strategic frames use different core logics to influence managerial interpretation of an issue as salient. We then present a typology of firm responsiveness and suggest that firms will respond more substantially to those issues perceived as salient to both cognitive logics and more symbolically to those issues perceived as salient to only one logic. This article fills key gaps in our understanding of how firms manage and respond to stakeholders by focusing on the salience of the issue and incorporating strategic cognition as a key mediating mechanism. [ABSTRACT FROM AUTHOR]

In this study, we explain how multinational enterprises (MNEs) respond to pressure to conform to their stakeholders' expectations for greater attention to corporate social responsibility (CSR). We invoke institutional theory to propose that mounting stakeholder pressure in an MNE's home country leads to the transfer of socially irresponsible practices from its headquarters to its overseas subsidiaries. This transfer is more pronounced when a subsidiary is apparently unconnected to an MNE, yet is controlled by an MNE's headquarters through the appointment of the subsidiary's board members; the institutional environment of the MNE's home country enforces compliance; and the degree of institutional enforcement, vigilance, and sanctions for noncompliance in the subsidiary's host country is low. Our hypotheses are empirically supported using panel data on 269 subsidiaries in 27 countries belonging to 110 MNEs from 22 countries. Results are robust to alternative measures, explanations, and sample. [ABSTRACT FROM AUTHOR]

One of the most difficult issues in stakeholder analysis is figuring out which stakeholders and stakeholder groups do not have legitimate claims on an organization (Klein, Mahoney, McGahan, & Pitelis, 2019). When can an executive rightly exclude consideration of some stakeholder groups in assessing the impact of an organization's operations and activities? What are the boundaries on an organization's responsibility? In this article, I review briefly this problem, point to unresolved tension in the management literature, and suggest some fruitful areas for future research. [ABSTRACT FROM AUTHOR]

The informal economy comprises business activities that are unregistered and unregulated but not otherwise illegal (Hart, 2006). Studying informal activity yields important insights for mainstream theories of management, pointing to areas for new theorizing on the boundaries of the firm, diversification, dynamic capabilities, absorptive capacity, property rights, governance, stakeholder theory, disruptive technology, innovation, and organizational legitimacy. I argue that research on this sector is not only an opportunity for management scholars but also essential to the continued relevance and vitality of management as a discipline. [ABSTRACT FROM AUTHOR]

Organizational misconduct has substantial effects on the well-being of a firm and its stakeholders. As this body of work has grown, organizational scholars have devoted considerable research attention toward understanding how firms can minimize the negative effects of misconduct through various corrective actions. Consequently, discrete research streams have formed around specific types of organizational misconduct and corrective actions, which has left the literature without a unifying theoretical model. We provide a conceptual synthesis and typology that aggregates disconnected concepts into the higher order constructs of organizational misconduct (executive dismissal, product recalls, organizational accounts, and policy changes) and corrective actions (fraud, product safety issues, employee mistreatment, and environmental violations). Using the theoretical tenets of stakeholder salience and managerial cognition, we offer insight and future research directions about managers' decision-making processes following misconduct and why firms respond using accommodative versus defensive strategies. [ABSTRACT FROM AUTHOR]

In this study, we analyzed investor reaction to corporate announcements of withdrawal from South Africa to determine whether such announcements increased or reduced firms' market value. We also examined the effect of the timing of the announcements on stock valuation. The announcements were associated with a significant drop in the value of the withdrawing firms' stock, particularly for firms withdrawing earlier in the debate surrounding the issue of withdrawal. These results suggest that managers were considering the interests of groups other than stockholders in their decisions to withdraw. Implications of the results for stakeholder theory are discussed. [ABSTRACT FROM AUTHOR]

Much empirical work in strategic management adopts measures of firm performance originally developed in accounting and finance. Not surprisingly, these measures are based on theories of how firms create value developed in these two disciplines. Strategic management has developed a different theory of how firms create value that focuses on assembling resources from multiple stakeholders, some of whom may be outside the boundaries of a firm. Progress in empirical research in strategic management will require the development of a measure of firm performance that adopts this stakeholder perspective. [ABSTRACT FROM AUTHOR]

A review is presented of the article "Employee treatment and firm leverage: A test of the stakeholder theory of capital structure," by Kee-Hong Bae, Jun-Koo Kang and Jin Wang, published in a 2011 issue of "Journal of Financial Economics."

Corporate social responsibility (CSR) has been shown to provide insurance-like protection that buffers firms from losses when they are sued. But does CSR also buffer firms from being sued? We conduct a study of 408 U.S. firms over the period 2002–2011 and find that, indeed, firms with greater CSR were less likely to be sued. Yet, despite suffering fewer lawsuits, we also find that firms with greater CSR were more likely to set aside provisions for litigation. Together, these findings suggest that CSR's buffering benefits may extend beyond just helping firms to suffer less harm from negative events, to include helping to protect firms from suffering negative events in the first place. Moreover, high-CSR firm's tendency toward transparency may be what drives the extension of these protective benefits. We call for more research on the scope and conditions under which CSR buffers firms from harm. [ABSTRACT FROM AUTHOR]

The article presents a response to comments made by authors L. K. Treviño, G. R. Weaver and D. A. Gioia on the article "Convergent Stakeholder Theory," by T. M. Jones and A. C. Wicks. Their first point of disagreement comes from Treviño and Weaver's argument that stakeholder theory is not viable because it is not descriptively plausible. Another point of contention comes from an assumption made by Gioia that came as a result of an incorrect reading of the initial article, which led Gioia to believe that stakeholder theory believes all stakeholders to be treated equally.

The article presents a response to an earlier article in "Academy of Management Review" regarding the stakeholder theory of the corporation from Thomas Donaldson and Lee Preston. The authors take issue with the foundation of the argument, claiming that the theory loses force and clarity when presented as a descriptive model. The article further discusses the issue of property as a basis for stakeholder theory, and illustrates the instability of this foundation through recent and current legal actions. The authors present other ethical theories that might act as a normative basis for stakeholder theory.