Content area
Full Text
Stakeholder theory development has increased in recent years, in part because of its emphasis on explaining and predicting how an organization functions with respect to the relationships and influences existing in its environment. Thus far. most researchers have concentrated on dyadic relationships between individual stakeholders and a local organization. Using social network analysis, I construct in this article a theory of stakeholder influences, which accommodates multiple, interdependent stakeholder demands and predicts how organizations respond to the simultaneous influence of multiple stakeholders.
One of the most popular trends in business and society literature is the identification and management of stakeholders, which many scholars have used as a framework for integrating and organizing research in the field. Since Freeman published his seminal piece (1984), Strategic Management: A Stakeholder Approach, a number of researchers even have proposed a stakeholder "theory of the firm" (Brenner, 1993; Brenner & Cochran, 1991). Those developing stakeholder theory have concentrated on classifying stakeholders into useful categories that provide an understanding of how individual stakeholders influence firms' operations. However, a comprehensive theory of the firm requires not only an explanation of stakeholder influences but also how firms respond to these influences. Furthermore, to describe how organizations respond to stakeholders, scholars must consider the multiple and interdependent interactions that simultaneously exist in stakeholder environments.
One approach for understanding stakeholder environments is using concepts from social network analysis to examine characteristics of entire stakeholder structures and their impact on organizations' behaviors, rather than individual stakeholder influences. Employing social network concepts will generate an explicit theory of stakeholder influences based on the structural characteristics of an organization's network of relationships. The theory's logic is derived from Oliver's (1991) examination of organizational responses to external influences and addresses this question: How does the structure of an organization's stakeholder relationships affect its response to stakeholder pressures? I argue that the density of the stakeholder network surrounding an organization and the organization's centrality in the network influence its degree of resistance to stakeholder demands. As a consequence of this examination, I identify four types of firm behaviors related to resisting stakeholder pressures: commander, compromiser, subordinate, and solitarian. This theory contributes to stakeholder research by providing a mechanism for conceptualizing the simultaneous influence of multiple stakeholders and predicting organizational responses...