ABSTRACT:We develop the concept of stakeholder salience to account for stakeholders who should matter to the firm, even when managers do not perceive them as important. While managers are responsible for attributing salience to stakeholders, they can overlook or ignore stakeholder importance because of market frictions that affect managerial perceptions or induce opportunism. When this happens, corporate financial and social performance can suffer. Thus, we propose that the perceptions of organizational and societal stakeholders should also codetermine the salience of the (...) focal stakeholder to the firm. We also propose that stakeholder dialogue can reduce the impacts that market frictions can have on managerial perceptions of stakeholder interests that should matter to the firm. Finally, we discuss how the refined conceptualization of stakeholder salience might have better predictive validity, be more normative, and make instrumental and normative stakeholder theory more convergent. (shrink)

Numerous scholars have observed that the relationship between poverty and violent conflict is endogenous. As a result, the area of Peace Through Commerce argues as one of its central tenets that the institution of business may be able to contribute to sustainable peace by creating economic development where poverty is a critical issue. While this argument may be valid, it leaves the question open — what is the business case for engaging in poverty alleviation business strategies? Strategic Management scholars are (...) addressing this question, arguing the general proposition that poverty is not only experienced by the people, but also impacts businesses operating in environments where the phenomenon is pervasive. By addressing poverty, businesses can help themselves. Yet, organizational theory justifying this proposition is still emerging, consisting of only a few studies that generally suggest that these strategies can help firms develop competitive advantage through the lens of the resource-based view. This article extends the theoretical application of the resource-based view, suggesting that conditions of poverty directly suppress the value of organizational resources and capabilities that are or could be contributed by people affected by it. In addition, it characterizes poverty alleviation strategic capabilities as dynamic capabilities. Finally, it describes a framework of "base of the pyramid dynamic capabilities" that could guide both future discourse in the area and deductive-disconfirmatory research examining the efficacy of these strategies. (shrink)

Studies on why small and medium enterprises engage in pro-environmental behavior suggest that managers’ environmental responsibility plays a relatively greater role than competitiveness and legitimacy-seeking. These categories of drivers are mostly considered independent of each other. Using survey data and comparative case studies of wine firms in South Africa, this study finds that managers’ environmental responsibility is indeed the key driver in a context where state regulation hardly plays any role in regulating dispersed, rural firms. However, especially proactive firms are (...) also characterized by expectations of competitiveness gains. The authors thus emphasize the role of institutional context and potential interaction effects between these drivers in explaining the reasons why SMEs engage in pro-environmental behavior in developing countries. (shrink)

Although natural resource scarcity is a pressing issue for many organizations, it has received little attention in management research. Drawing on resource dependence theory, this article theorizes how organizations manage uncertainty from their dependence on scarce natural resources. For this end, it explains how socio-ecological processes involving anthropogenic impacts on ecosystem services cause this form of uncertainty. It then proposes that organizations develop wide-ranging responses to such uncertainty, depending on their predominant institutional logics, from protecting and restoring ecosystems that provision (...) critical natural resources to further developing those ecosystems for optimal resource yields at the risk of degrading them. The article adds to the limited existing research on the unique challenges of managing natural resource scarcity and extends resource dependence theory by accounting for socio-ecological dynamics that create uncertainty regarding natural resources. (shrink)

We meta-analyze 103 studies of 23 voluntary environmental programs (VEPs) to assess how their governance quality, or the rigor of their internal institutional mechanisms, drives their ability to improve their participants corporate environmental and financial performance. The goal of VEPs is to incentivize firms to reduce firms’ environmental impacts by bolstering their reputations and helping them learn practices that improve their financial performance. Research on VEP effectiveness, however, is inconclusive, in part, because most studies sampled individual programs, and were unable (...) to analyze how difference in program characteristics drive their effectiveness. We draw on institutional theory to argue that VEP governance quality determines whether they improve participants’ environmental performance, and the natural resource-based view to argue that they improve their financial performance. Results confirm our predictions, and in doing so, help to establish a business case for VEPs with high-quality governance. (shrink)