Hostname: page-component-586b7cd67f-g8jcs Total loading time: 0 Render date: 2024-11-30T17:03:59.565Z Has data issue: false hasContentIssue false
  • English
  • Français

Innovative Stakeholder Relations: When “Ethics Pays” (and When it Doesn’t)

Published online by Cambridge University Press:  23 January 2015

Troy R. Harting ,
Susan S. Harmeling  and
S. Venkataraman
Get access Rights & Permissions [Opens in a new window]

Abstract:

Business ethicists are eager to connect the ethical treatment of stakeholders with financial rewards. However, little attention has been paid to the cultural and industry context that influences how stakeholders are regarded by the firm, and how innovative strategies for engaging stakeholders can help a firm outperform its competitors. By reconnecting stakeholder theory to its roots in the field of strategy, we provide a framework for understanding the dynamic interplay between stakeholder relationships, innovation, and competitive advantage. The result is a set of testable propositions aimed at better characterizing when and how “ethics pays” (Paine 2003).

Type
Articles
Information
Business Ethics Quarterly , Volume 16 , Issue 1 , January 2006 , pp. 43 - 68
Copyright
Copyright © Society for Business Ethics 2006

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aldrich, H., and Fiol, C.. 1994. “Fools Rush In? The Institutional Context of Industry Creation.” Academy of Management Review (19)4: 645–70.CrossRefGoogle Scholar
Alvarez, S. A., and Busenitz, L. W.. 2001. “The Entrepreneurship of Resource-Based Theory.” Journal of Management 27: 755–75.CrossRefGoogle Scholar
Andrews, K. R. 1980. The Concept of Corporate Strategy, 3rd ed. Homewood, Ill.: Irwin.Google Scholar
Associated Press. 2002. “Want Some Coke, I Mean, Cocaine, With Your Whopper?” Fox News (December 9). Retrieved May 23, 2003. Available at www.foxnews.com/story/0,2933,72475,00.html.Google Scholar
Ball, J. 2003. “Detroit Worries Some Consumers are Souring on Big SUVs.” Wall Street Journal (January 8), B1.Google Scholar
Barnard, C. I. 1938/1974. The Functions of the Executive, 30th anniversary edition. Cambridge, Mass.: Harvard University Press.Google Scholar
Barney, J. 1986. “Organizational Culture: Can it Be a Source of Sustained Competitive Advantage?” Academy of Management Review 11: 656–65.CrossRefGoogle Scholar
Barney, J.. 1991. “Firm Resources and Sustained Competitive Advantage.” Journal of Management 17: 99–120.CrossRefGoogle Scholar
Barney, J., and Hansen, M.. 1994. “Trustworthiness as a Source of Competitive Advantage.” Strategic Management Journal 15 (Winter Special Issue): 175–90.CrossRefGoogle Scholar
Barney, J. B. 2002. Gaining and Sustaining Competitive Advantage, 2nd ed. Upper Saddle River, N.J.: Prentice Hall.Google Scholar
Baucus, M., and Baucus, D.. 1997. “Paying the Piper: An Empirical Examination of Longer-Term Financial Consequences of Illegal Corporate Behavior.” Academy of Management Journal 40: 129–51.CrossRefGoogle Scholar
Baumol, W. 1993. Entrepreneurship, Management, and the Structure of Payoff. Cambridge, Mass.: MIT Press.Google Scholar
Berle, A. A. Jr., and Means, G. C.. 1932. The Modern Corporation and Private Property. New York: Macmillan and Co.Google Scholar
Berman, S., Wicks, A., Kotha, S., and Jones, T.. 1999. “Does Stakeholder Orientation Matter? The Relationship between Stakeholder Management Models and Firm Financial Performance.” Academy of Management Journal 42: 488–506.CrossRefGoogle Scholar
Bird, F., and Waters, J.. 1989. “The Moral Muteness of Managers.” California Management Review 32(1): 73–89.CrossRefGoogle Scholar
Brenkert, G. G. 2002. “Entrepreneurship, Ethics, and the Good Society.” Ethics and Entrepreneurship, The Ruffin Series 3: 5–43.Google Scholar
Burt, R. S. 1992. Structural Holes. Cambridge, Mass.: Harvard University Press.CrossRefGoogle Scholar
Carroll, A. B. 1987. “In Search of the Moral Manager.” Business Horizons (March/April).CrossRefGoogle Scholar
Creswell, J. 2003. “Scandal Hits—Now What?” Fortune 148(1) (July 7): 127–30.Google Scholar
Dalton, D., and Todor, W.. 1982. “Turnover: A Lucrative Hard Dollar Phenomenon.” Academy of Management Review 7: 212–18.CrossRefGoogle Scholar
Day, G. S. 1995. “Advantageous Alliances.” Journal of the Academy of Marketing Science 23(4): 297–300.CrossRefGoogle Scholar
Dierickx, I., and Cool, K.. 1989. “Asset Stock Accumulation and Sustainability of Competitive Advantage,” Management Science 35: 1504–11.CrossRefGoogle Scholar
Dodd, E. Merrick Jr. 1932. “For Whom Are Corporate Managers Trustees?” Harvard Law Review 45: 1145–63.CrossRefGoogle Scholar
Donaldson, T., and Dunfee, T. W.. 1999. Ties That Bind. Boston: Harvard Business School Press.Google Scholar
Dooley, R. S., and Lerner, L. D.. 1994. “Pollution, Profits, and Stakeholders: The Constraining Effect of Economic Performance on CEO Concern with Stakeholder Expectations.” Journal of Business Ethics 13: 701–12.CrossRefGoogle Scholar
Drucker, P. 1985. Innovation and Entrepreneurship. New York: Harper and Row.Google Scholar
Dyer, J., and Chu, W.. 2003. “The Role of Trustworthiness in Reducing Transaction Costs and Improving Performance: Empirical evidence from the United States, Japan and Korea.” Organization Science 14(1): 57–68.CrossRefGoogle Scholar
Economist, The. 1999. “Stop the Rot.” The Economist 350(8102) (January 16 US edition): 19.Google Scholar
Ernst, D., and Bleeke, J.. 1993. Collaborating to Compete: Using Strategic Alliances and Acquisition in the Global Marketplace. New York: Wiley and Sons.Google Scholar
Fadahunsi, A., and Rosa, P.. 2002. “Entrepreneurship and Illegality: Insights from the Nigerian Cross-Border Trade.” Journal of Business Venturing 17: 397–429.CrossRefGoogle Scholar
Frederick, W. C. 2000. “Notes for a Third Millennial Manifesto.” Business Ethics Quarterly 10(1): 159–67.CrossRefGoogle Scholar
Freeman, R. E. 1984. Strategic Management: A Stakeholder Approach. Boston: Pitman.Google Scholar
Freeman, R. E.. 1994. “The Politics of Stakeholder Theory: Some Future Directions.” Business Ethics Quarterly 4: 409–22.CrossRefGoogle Scholar
Friedman, M. 1970. “The Social Responsibility of Business Is to Increase its Profits.” New York Times Magazine (September 1). Reprinted in Ethical Theory and Business, ed. Beauchamp, Tom L. and Bowie, Norman E. (Englewood Cliffs, N.J.: Prentice Hall, 1993).Google Scholar
Frooman, J. 1997. “Socially Irresponsible and Illegal Behavior and Shareholder Wealth.” Business and Society (September): 221–49.CrossRefGoogle Scholar
Gartner, W. 1988. “‘Who Is an Entrepreneur?’ Is the Wrong Question.” American Journal of Small Business 12(4): 11–32.CrossRefGoogle Scholar
Global Entrepreneurship Monitor. 2002. A joint project between Babson College and the London Business School.Google Scholar
Gompers, P., Desai, M., and Lerner, J.. 2003. “The two Faces of Entrepreneurship: Evidence from Eastern and Western Europe.” Working Paper, Harvard Business School.Google Scholar
Grant, R. M. 1995. “Analyzing Resources and Capabilities,” in Contemporary Strategy Analysis, 2nd ed. London: Blackwell, chap. 5.Google Scholar
Hanke, S. H. 1996. “The Curse of Corruption.” Forbes 158(3): 103.Google Scholar
Harmeling, S. 2004. “The Entrepreneur As Strong Poet: From Private Obsession to Public Need,” presented at annual Society for Business Ethics Conference, New Orleans.Google Scholar
Harrison, J., and Freeman, R. E.. 1999. “Stakeholders, Social Responsibility and Performance: Empirical Evidence and Theoretical Perspectives.” Academy of Management Journal 42(5): 479–85.CrossRefGoogle Scholar
Herrera, A. M., and Rodriguez, P.. 2002. “Bribery and the Nature of Corruption.” Working Paper, University of Texas.Google Scholar
Hill, C. 1990. “Cooperation, Opportunism, and the Invisible Hand: Implications for Transactions Cost Theory.” Academy of Management Review 15(3): 500–13.CrossRefGoogle Scholar
Hill, C., and Jones, T.. 1992. “Stakeholder-Agency Theory.” Journal of Management Studies 29(2): 131–54.CrossRefGoogle Scholar
Hoffman, W., and Moore, J.. 1984. Business Ethics. New York: McGrawHill.Google Scholar
Ireland, D., Hitt, M., Camp, S., and Sexton, D.. 2001. “Integrating Entrepreneurship Actions and Strategic Management Actions to Create Firm Wealth.” Academy of Management Executive 15(1): 49–63.Google Scholar
Jensen, M. C., and Meckling, W. H.. 1976. “The Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure.” Journal of Financial Economics 3(4): 305–60.CrossRefGoogle Scholar
Jones, T. 1995. “Instrumental Stakeholder Theory: A Synthesis of Ethics and Economics.” Academy of Management Review 20: 404–37.CrossRefGoogle Scholar
Knight, F. 1921. Risk, Uncertainty and Profit. Chicago: University of Chicago Press.Google Scholar
Kracher, B., and Corritore, C. L.. 2004. “Is There a Special E-Commerce Ethics?” Business Ethics Quarterly 14(1): 71–94.CrossRefGoogle Scholar
Krueger, A. 1974. “The Political Economy of the Rent-Seeking Society.” American Economic Review 64: 291–303.Google Scholar
Larson, A. 1992. “Network Dyads in Entrepreneurial Settings: A Study of the Governance of Exchange Relationships.” Administrative Science Quarterly 37: 76–104.CrossRefGoogle Scholar
Larson, A.. 2000. “Sustainable Innovation through an Entrepreneurship Lens.” Business Strategy and the Environment 9: 304–17.3.0.CO;2-O>CrossRefGoogle Scholar
Leana, C., and Van Buren III, H.. 1999. “Organizational Social Capital and Employment Practices.” Academy of Management Review 24: 538–55.CrossRefGoogle Scholar
Litz, R. 1996. “A Resource-Based View of the Socially Responsible Firm: Stakeholder Interdependence, Ethical Awareness, and Issue Responsiveness as Strategic Assets.” Journal of Business Ethics 15: 1355–63.CrossRefGoogle Scholar
MacGaffey, J. 1991. The Real Economy of Zaire: The Contribution of Smuggling and Other Unofficial Activities to National Wealth. London: James Currey Publishing.Google Scholar
Marshall, K. P. 1999. “Has Technology Introduced New Ethical Problems?” Journal of Business Ethics 19(1): 81–90.CrossRefGoogle Scholar
McMillan, J., and Woodruff, C.. 2002. “The Central Role of Entrepreneurs in Transition Economies,” Journal of Economic Perspectives 16(3): 153–70.CrossRefGoogle Scholar
Merton, R. 1957. “Social Structure and Anomie,” in Social Theory and Social Structure, 2nd ed. Glencoe, Ill.: Free Press, chap. 4.Google Scholar
Mitchell, R., Agle, B., and Wood, D.. 1997. “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts.” Academy of Management Review 22(4): 853–86.CrossRefGoogle Scholar
Paine, Lynn Sharp. 2003. Value Shift. New York: MacGraw-Hill.Google Scholar
Penrose, E. 1959. The Theory of the Growth of the Firm. Oxford: Oxford University Press.Google Scholar
Peteraf, M. 1993. “The Cornerstones of Competitive Advantage: A Resource-Based View.” Strategic Management Journal 13: 363–80.Google Scholar
Peterson, D. K. 2003. “The Relationship between Ethical Pressure, Relativistic Moral Beliefs, and Organizational Commitment.” Journal of Managerial Psychology 18(6): 557–72.CrossRefGoogle Scholar
Phillips, R. 2003. “Stakeholder Legitimacy.” Business Ethics Quarterly 13(1): 25–41.CrossRefGoogle Scholar
Porter, M. E. 1980. Competitive Strategy. New York: Free Press.Google Scholar
Robinson, J. P. 1981. “Will the New Electronic Media Revolutionize Our Daily Lives?” in Communications in the Twenty-First Century, ed. Haigh, R., Gerbner, G., and Byme, R.. New York: Wiley and Sons.Google Scholar
Rodriguez, P., Uhlenbruck, K., and Eden, L.. 2005. “Government Corruption and the Entry Strategy of Multinationals.” Academy of Management Review 30(2): 383–96.CrossRefGoogle Scholar
Rumelt, R. 1984. “Toward a Strategic Theory of the Firm,” in Competitive Strategic Management, ed. Lamb, R.. Princeton, N.J.: Princeton: 556–70.Google Scholar
Sadri, G., and Lees, B. 2001. “Developing Corporate Culture as a Competitive Advantage.” The Journal of Management Development 20: 853–59.Google Scholar
Sarasvathy, S. 2002. “Entrepreneurship as Economics with Imagination.” Ethics and Entrepreneurship. The Ruffin Series 3: 95–112.Google Scholar
Schumpeter, J. A. 1934. The Theory of Economic Development. Cambridge, Mass.: Harvard University Press.Google Scholar
Schumpeter, J. A.. 1942. Capitalism, Socialism and Democracy. New York: Harper and Brothers.Google Scholar
Sen, A. 1987. On Ethics and Economics. Oxford: Blackwell.Google Scholar
Shane, S., and Venkataraman, S.. 2000. “The Promise of Entrepreneurship as a Field of Research.” Academy of Management Review 25(1): 217–26.Google Scholar
Sims, R. L., and Kroeck, K. G.. 1994. “The Influence of Ethical Fit on Employee Satisfaction, Commitment, and Turnover.” Journal of Business Ethics 13(12): 939–50.CrossRefGoogle Scholar
Smith, A. 1759/1974. The Theory of Moral Sentiments, ed Macfie, A. L. and Raphael, D. D.. Oxford: Clarendon Press.Google Scholar
Svensson, G., and Wood, G.. 2003. “The Dynamics Of Business Ethics: A Function of Time and Culture—Cases and Models.” Management Decision 41(4): 350–61.CrossRefGoogle Scholar
Swartz, M. 2003. Power Failure: The Inside Story of the Collapse of Enron. New York: Doubleday.Google Scholar
Swidler, A. 1986. “Culture in Action: Symbols and Strategies.” American Sociological Review 51: 273–86.CrossRefGoogle Scholar
Thorelli, H. B. 1986. “Networks between Markets and Hierarchies.” Strategic Management Journal 7: 37–51.CrossRefGoogle Scholar
U.S. Department of Health and Human Services. 1989. “Reducing the Health Consequences of Smoking: 25 Years of Progress. A Report from the Surgeon General.” Washington.Google Scholar
Velamuri, S. R. 2002. “Entrepreneurship, Altruism, and the Good Society.” Ethics and Entrepreneurship. The Ruffin Series 3: 125–43.Google Scholar
Venkataraman, S. 2002. “Stakeholder Value Equilibration and the Entrepreneurial Process.” Ethics and Entrepreneurship. The Ruffin Series 3: 45–57.Google Scholar
Wernerfelt, B. 1984. “A Resource-Based View of the Firm.” Strategic Management Journal 5: 171–80.CrossRefGoogle Scholar
Wicks, A. 1996. “Overcoming the Separation Thesis: The Need for a Reconsideration of SIM Research.” Business and Society. 35(1): 89–118.CrossRefGoogle Scholar
Wicks, A., and Freeman, R. E.. 1998. “Organization Studies and the New Pragmatism: Positivism, Anti-Positivism, and the Search for Ethics.” Organization Science 9: 123–40.CrossRefGoogle Scholar
Williamson, O. E. 1985. The Economic Institutions of Capitalism. New York: Free Press.Google Scholar
Wood, G. 2002. “A Partnership Model of Corporate Ethics.” Journal of Business Ethics 40(1): 61–74.CrossRefGoogle Scholar
Wrong, D. 1961. “The Oversocialized Conception of Man in Modern Sociology.” American Sociological Review 26: 183–93.CrossRefGoogle Scholar