Stakeholders, reciprocity, and firm performance

The assumption that economic actors behave in a boundedly self-interested manner promises fruitful new insights for strategic management. A growing literature spanning multiple disciplines indicates most actors' selfish utility maximizing behaviors are bounded by norms of fairness. Rather than...

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Bibliographic Details
Published in:Strategic management journal 2009-04, Vol.30 (4), p.447-456
Main Authors: Bosse, Douglas A., Phillips, Robert A., Harrison, Jeffrey S.
Format: Article
Language:English
Subjects:
bounded self-interest
Corporate strategies
Economic behaviour
Economic psychology
Economic rent
Employees
Fairness
Game theory
Justice
Management science
Opportunistic behavior
Perceptions
Procedural justice
Reciprocal behavior
reciprocity
rent creation
Research Notes and Commentaries
Self interest
Stakeholder
stakeholder theory
Stakeholders
Strategic management
Studies
Utility maximization
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Summary:The assumption that economic actors behave in a boundedly self-interested manner promises fruitful new insights for strategic management. A growing literature spanning multiple disciplines indicates most actors' selfish utility maximizing behaviors are bounded by norms of fairness. Rather than being purely self-interested, people behave reciprocally by rewarding others whose actions they deem fair and willingly incurring costs to punish those they deem unfair. Economists show that employers who are perceived as distributionally fair by their employees generate comparatively more value due to the positively reciprocal behavior of those employees. The organizational justice literature distinguishes two additional types of fairness assessed by employees. Drawing from both these bodies of work, we employ stakeholder theory to propose how perceptions of fairness result in reciprocity (1) extending to all stakeholders of the firm and (2) affecting firm performance.
ISSN:0143-2095
1097-0266
DOI:10.1002/smj.743