Skip to main content

Who and What Really Matters to the Firm: Moving Stakeholder Salience beyond Managerial Perceptions

  • Pete Tashman (a1) and Jonathan Raelin (a2)

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.

Hide All
Agle, B.R., Donaldson, T., Freeman, R.E., Jensen, M.C., Mitchell, R.K., & Wood, D.J. 2008. Toward superior stakeholder theory. Business Ethics Quarterly, 18(2): 153–90.
Agle, B.R., Mitchell, R.K., & Sonnenfeld, J.A. 1999. Who matters to CEOs? Academy of Management Journal, 42(5): 507–22.
Asher, C.C., Mahoney, J.M., & Mahoney, J.T. 2005. Towards a property rights foundation for a stakeholder theory of the firm. Journal of Management and Governance, 9: 532.
Banerjee, S.B. 2000. Whose land is it anyway? Organization & Environment, 13(1): 338.
Baron, J. 2007. Thinking and deciding (4th ed.). New York: Cambridge University Press.
Bitektine, A. 2011. Toward a theory of social judgments of organizations: The case of legitimacy, reputation, and status. Academy of Management Review, 36(1):151–79.
Clapham, S., & Schwenk, C.,1991. Self-serving attributions, managerial cognition, and company performance. Strategic Management Journal, 12(3): 219–29.
Clarkson, M.B.E. 1995. A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review, 20(1): 92117.
Coff, R.W. 1999. When competitive advantage doesn't lead to performance: The resource-based view and stakeholder bargaining power. Organization Science, 10(2): 119–33.
Davis, G., & Cobb, J. 2009. Resource dependence theory: Past and future. In C. Schoonhoven and F. Dobbin (Eds). Research in the Sociology of Organizations, 2142. Bingley: Emerald.
Donaldson, T., & Dunfee, T.W. 1994. Toward a unified conception of business ethics: Integrative social contracts theory. Academy of Management Review, 19(2): 252–84.
Donaldson, T., & Preston, L. 1995. The stakeholder theory of the corporation. Academy of Management Review, 20(1): 6591.
Foster, D., & Jonker, J. 2005. Stakeholder relationships: the dialogue of engagement. Corporate Governance, 5(5): 5157.
Freeman, R.E. 1984. Strategic management. Boston: Pitman/Ballinger.
Freeman, R.E., & Evan, W.M. 1990. Corporate governance: A stakeholder interpretation. Journal of Behavioral Economics, 19(4): 337–59.
Frooman, J. 1999. Stakeholder influence strategies. Academy of Management Review, 24(2): 191205.
Gardberg, N., & Newburry, W. 2013. Who boycotts whom? Marginalization, company knowledge, and strategic issues. Business&Society, 52(2): 318–57.
Gilbert, D., & Rasche, A. 2007. Discourse ethics and social accountability: The ethics of SA 8000. Business Ethics Quarterly, 17(2): 187216.
Habermas, J. 1990. Moral consciousness and communicative action Cambridge, MA: MIT Press.
Hart, O., & Moore, J. 1990. Incomplete contracts and renegotiation. Econometrica, 56: 755–85.
Hendry, J. 2001. Missing the target: Normative stakeholder theory and the corporate governance debate. Business Ethics Quarterly, 11(1): 159–76.
Hilbert, M. 2012. Toward a synthesis of cognitive biases: How noisy information processing can bias human decision making. Psychological Bulletin, 138(2): 211–37.
Hill, C., & Jones, T. 1992. Stakeholder-agency theory. Journal of Management Studies, 29(2): 131–54.–6486.1992.tb00657.x
Ingley, C., & Van Der Walt, N. 2004. Corporate governance, institutional investors and conflicts of interest. Corporate Governance: An International Review, 12(4): 534–51.
Jones, T., & Wicks, A. 1999. Convergent stakeholder theory. Academy of Management Review, 24(2): 206–21.
Jones, T.M. 1995. Instrumental stakeholder theory: A synthesis of ethics and economics. Academy of Management Review, 20(2): 404–37.
Kaptein, M., & Van Tulder, R. 2003. Toward effective stakeholder dialogue. Business and Society Review, 108(2): 203–24.–8594.00161
Kaufmann, D., Kraay, A., & Mastruzzi, M. 2006. Governance matters V: Governance indicators for 1996-2005. Washington, DC: World Bank Institute.
Khurana, R., & Nohria, N. 2008. It’s time to make management a true profession. Harvard Business Review, 86(10): 7077.
King, A., & Lenox, M. 2000. Industry self-regulation without sanctions: The chemical industry’s responsible care program. Academy of Management Journal, 43: 698716.
Kostova, T., & Zaheer, S. 1999. Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review, 24: 6481.
Locke, R., & Romis, M. 2007. Improving work conditions in a global supply chain. Sloan Management Review, 48(2): 5462.
MacGillivray, A., Begley, P. , & Zadek, S. 2007. The state of responsible competitiveness 2007, London: AccountAbility.
Magness, V. 2008. Who are the stakeholders now? An empirical examination of the Mitchell, Agle and Wood theory of stakeholder salience. Journal of Business Ethics, 83: 177–92.
Marano, V., & Tashman, P. 2012. MNE/NGO partnerships and the legitimacy of the firm. International Business Review, 21(6): 1122–30.
Mattingly, J. 2004. Stakeholder salience, structural development, and firm performance: Structural and performance correlates of sociopolitical stakeholder management strategies. Business and Society, 43(1): 97114.
McCoy, M.A., & Salerno, J.A. 2010. Assessing the effects of the Gulf of Mexico oil spill on human health, Washington, DC: The National Academy of Sciences.
Mitchell, R.K., Agle, B.R., & Wood, D.K. 1997. Toward a theory of stakeholder identification and salience. Academy of Management Review, 22(4): 853–86.
Neville, B.A., & Menguc, B. 2006. Stakeholder multiplicity: Toward an understanding of the interactions between stakeholders. Journal of Business Ethics, 66: 377–91.
Parmar, B., Freeman, R.E., Harrison, J., Wicks, A.C., Purnell, L., & Colle, S., 2010. Stakeholder theory: The state of the art. Academy of Management Annals, 4(1): 403–45.
Pfeffer, J & Salancik, G.R. 1978. The external control of organizations. New York: Harper and Row.
Phillips, R.A. 2003. Stakeholder theory and organizational ethics. San Francisco: Berrett-Koehler.
Phillips, R.A., & Johnson-Cramer, M.E. 2006. Ties that unwind: Dynamism in integrative social contracts theory. Journal of Business Ethics, 68(3): 283302.
Rasche, A. 2012. Global policies and local practice: Loose and tight couplings in multi-stakeholder initiatives. Business Ethics Quarterly, 22(4): 679708.
Reed, D. 1999. Stakeholder management theory: A critical theory perspective. Business Ethics Quarterly, 9(3): 453–83.
Reed, D. 2002. Employing normative stakeholder theory in developing countries: A critical theory perspective. Business&Society, 41(2): 166207.
Scherer, A.G., & Palazzo, G. 2007. Toward a political conception of corporate responsibility: Business and society seen from a Habermasian perspective. Academy of Management Review, 32: 10961120.
Scott, W.R. 2008. Institutions and organizations, (3rd ed.) Thousand Oaks, CA: Sage.
Simon, H.A. 1946. The proverbs of administration. Public Administration Review, 6(1): 5367.
Simon, H.A. 1955. A behavioral model of rational choice. The Quarterly Journal of Economics, 69(1): 99118.
Smith, J. 2005. Fairness communication and engagement: New developments in stakeholder theory. Business Ethics Quarterly, 15(4): 711–21.
Sobczak, A. 2006. Are codes of conduct in global supply chains really voluntary? From soft law regulation of labour relations to consumer law. Business Ethics Quarterly, 16: 167–84.
Stansbury, J. 2009. Reasoned moral agreement. Business Ethics Quarterly, 19(1): 3356.
Starik, M., & Rands, G. 1995. Weaving an integrated web: Multilevel and multisystem perspectives of ecologically sustainable organizations. Academy of Management Review, 20(4): 908–35.
Suchman, M. 1995. Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3): 571610.
Swanson, D. 1999. Toward an integrative theory of business and society: A research strategy for corporate social performance. Academy of Management Review, 24(3): 506–21.
Tversky, A., & Kahneman, D. 1974. Judgment under uncertainty: Heuristics and biases. Science, 185: 1124–31.
Van Buren III, H.J. 2001. If fairness is the problem, is consent the solution? Integrating ISCT and stakeholder theory. Business Ethics Quarterly, 11(3: 481–99.
Vilanova, L. 2007. Neither shareholder nor stakeholder management: What happens when firms are run for their short-term salient stakeholder? European Management Journal, 25(2: 146–62.
Vogel, D. 2010. The private regulation of global corporate conduct: Achievements and limitations. Business and Society, 49(1: 6887.
Waddock, S.A., & Graves, S. 1997. The corporate social performance-financial performance link. Strategic Management Journal, 18(4: 303–17.<303::AID-SMJ869>3.0.CO;2-G
Williamson, O.E. 1985. The economics institutions of capitalism. New York: Free Press.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Business Ethics Quarterly
  • ISSN: 1052-150X
  • EISSN: 2153-3326
  • URL: /core/journals/business-ethics-quarterly
Please enter your name
Please enter a valid email address
Who would you like to send this to? *



Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed