Profit or legitimacy? What drives firms to prioritize social stakeholders?

This study questions the assumption that firms always prioritize economic stakeholders (employees and customers) over social stakeholders (communities and the environment). An examination of 468 Chinese private firms reveals three important conditions driving firms to prioritize social stakeholders...

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Bibliographic Details
Published in:Asian journal of business ethics 2017-06, Vol.6 (1), p.57-79
Main Authors: Wang, Lihua, Liang, Xiaoya
Format: Article
Language:English
Subjects:
Economic Growth
Education
Ethics
Family owned businesses
Management
Philosophy
Quality of Life Research
Social responsibility
Stakeholder management
Stakeholders
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Summary:This study questions the assumption that firms always prioritize economic stakeholders (employees and customers) over social stakeholders (communities and the environment). An examination of 468 Chinese private firms reveals three important conditions driving firms to prioritize social stakeholders over economic stakeholders. First, the percentage of family ownership increases the likelihood of social stakeholder priority up to a point, after which further increase in the percentage of family ownership decreases the likelihood of social stakeholder priority. Firms planning initial public offerings and smaller firms are more likely to prioritize social stakeholders. The findings reveal important exceptions and nuances in stakeholder management strategies.
ISSN:2210-6723
2210-6731
DOI:10.1007/s13520-016-0072-4