Insight into organizational responses to stakeholder claims and influence attempts is critical to understand the challenges currently facing managers and organizations. Drawing on Kelman's (1958) model of social influence, we advance the field's understanding of the factors driving firm-level prioritization of competing stakeholder claims by developing a theoretical framework that accounts for both the stakeholder attributes that are important to relevant decision makers, and the decision makers' motivations for accepting or rejecting the influence attempts of varying stakeholders. Our framework distinguishes itself from existing research by focusing on stakeholder prioritization, not salience, recognizing that stakeholder-related decisions result from group interaction and that important decision makers are not limited to those found within the classic boundaries of the firm. Consequently, we argue that decision makers are simultaneously stakeholders with attributes that might be relevant to other decision makers involved in prioritization. In addition, we identify a more extensive set of stakeholder attributes that includes powerlessness and illegitimacy.

Purpose -This paper aims to explore the linkages between greed and governance failures in both financial institutions and financial markets. Design/methodology/approach -The paper described how innovation changed the US financial system through an analysis of recent events, and employs the philosophic concepts of hubris and greed to explain certain developments. Findings -The development of the shadow banking system and opaque products was motivated in part by greed. These developments made governance at both the institutional and market levels extremely difficult, if not impossible. In part the findings are limited by the current opacity of the markets and the dynamics of events. Practical implications -The implication of the research is to reinforce the need for transparency if the risk of innovation in the financial system is to be both identified and managed. The creation of central clearing houses and/or exchanges for new products is clearly indicated. Originality/value -Understanding the linkages between greed, hubris and governance in the development of opaque products provides insights of value to those trying to understand the current crisis -from academics to practitioners.

decision-making, enterprise risk management, ethics, strategic management,

No abstract

Managers are most likely to turn to the board of directors for guidance during a period of crisis. But can good corporate governance prevent an organization from reaching that critical point in the first place? In light of the recent global financial crisis, this question has become all the more pressing, and so to prevent future crises, we argue that corporate boards of directors need to be keenly aware of the potential social harms that might arise from the value-creating activities of the firm they are tasked with monitoring. Boards of directors must be vigilant in understanding the firm's value proposition, perceiving the potential harms that managers tend to overlook, and inserting themselves into the strategy-making process. We offer a typology of scenarios involving potential social harm and benefit and analyze when boards of directors must take a more active role in shaping firm strategy despite resistance from management.