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When does it (not) pay to be good? Interplay between stakeholder and competitive strategies
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He, Ye and Chittoor, Raveendra (2022) When does it (not) pay to be good? Interplay between stakeholder and competitive strategies. Journal of Management . 014920632211064. doi:10.1177/01492063221106433 ISSN 0149-2063.
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Official URL: http://dx.doi.org/10.1177/01492063221106433
Abstract
Using the instrumental stakeholder theory lens, we examine how generic competitive strategies influence the link between stakeholder management (SM) and firm financial performance. We develop a framework that highlights the synergistic effects of a differentiation strategy on SM but also the trade-offs between a cost leadership strategy and SM in their consequences for financial performance. We test our theoretical mechanism further by distinguishing between primary and secondary stakeholders, who differ in their degree of firm specificity and instrumentality. We propose that for firms pursuing a low-cost competitive advantage, secondary SM intensifies the trade-offs between SM and financial performance when compared with primary SM, whereas both primary and secondary SM are likely to improve financial performance for differentiators. Empirical analyses using a panel data set of S&P 500 firms over a 15-year period (2005–2019) and a series of robustness tests support our predictions. Our findings highlight important boundary conditions for SM's impact on firms’ financial performance and highlight not only “when SM pays” but also “when SM may not pay.”
| Item Type: | Journal Article | ||||||||
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| Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
| Journal or Publication Title: | Journal of Management | ||||||||
| Publisher: | Sage Publications Ltd. | ||||||||
| ISSN: | 0149-2063 | ||||||||
| Official Date: | 2022 | ||||||||
| Dates: |
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| Page Range: | 014920632211064 | ||||||||
| DOI: | 10.1177/01492063221106433 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Open Access (Creative Commons) |
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