This study contributes to understanding stakeholder engagement strategies by examining competitive responses alongside sociopolitical implications after a major exogenous shock—the 1998 Master Settlement Agreement (MSA) between the “Big Four” U.S. tobacco firms and 46 state attorneys general. We compare the different stakeholder engagement strategies of the two remaining U.S. tobacco manufacturers, Philip Morris (PM) and R. J. Reynolds (RJR), between 1998 and 2017. Implications for stakeholder theory from a relatively rare natural experiment highlight the importance of simultaneously managing multiple stakeholders, (...) inclusive of domestic and international sociopolitical and value chain stakeholders over time, for sustained value creation. Although PM and RJR initially pursued heterogeneous strategies by re-configuring relationships with relevant stakeholders, each firm’s growth prospects for the first decade post-MSA were exacerbated by various stakeholders through withholding and selective engagement strategies. Implications for how multiple, simultaneous stakeholder relationships can serve as important resources for achieving or limiting sustained growth are discussed. (shrink)

This study explores the impact of cooperative engagement with nonfamily employees, consumers, and communities on risk-taking behavior of privately held, long-lived family firms. We posit that cooperative relations can build and reinforce connectedness among the family and nonfamily stakeholders which, in turn, can lead to increased risk-taking. More specifically, the increased stability from widespread cooperative nonfamily engagement will positively moderate risk-taking behavior by amplifying the influence of family involvement in privately held family firms. Using a unique survey of long-lived, privately (...) held family firms, we find support for our hypotheses: cooperative engagement interacts with the essence of family involvement to amplify risk-taking. This study contributes to the stakeholder engagement and family firm literatures and offers managerial and policy implications by underscoring the benefits of cooperative engagement as it enhances risk-taking of family firms, a precursor of growth. (shrink)

Instrumental CSR perspectives suggest that selective investments in prosocial, voluntary behaviors are largely profit-driven, whereas institutional theory emphasizes legitimacy-seeking as a significant mechanism for explicit CSR disclosure. We test both profit-seeking and legitimacy-seeking mechanisms, derived from empirical findings of Western-oriented firms, in a unique setting to understand voluntary CSR disclosure in an Eastern context: South Korea. By examining voluntary disclosure of the 500 largest South Korean firms’ social contributions from 2006 to 2012, a time period purposefully encompassing the global financial (...) crisis, we highlight the limitations of corporate social responsibility theorizing when East meets West. Our findings suggest profitability is not significantly related to voluntary disclosure as predicted by Western, instrumental CSR literature. Overall, we found support for legitimacy-seeking mechanisms as the likelihood of disclosure increased for publicly listed firms and those employing a larger number of workers for all years between 2006 and 2012. Further, firms affiliated with chaebols are more likely to disclose prosocial behaviors prior to, and after, the GFC compared to firms that are not affiliated with chaebols regardless of profitability further suggesting that legitimacy-seeking mechanisms may underlie CSR reporting in Korean firms. (shrink)