Plain language summary This article argues that the rapid evolution of expectations and influence capacity by corporate stakeholders requires managers in MNCs not only to adapt operating activities, but to rethink the purpose and overarching goal of the business enterprise, adapting it from a shareholder‐primacy to a multi‐stakeholder enterprise model. This complex adaptation process, however, requires the development of a specific form of competence to be developed and honed, different in kind from the typical capabilities focused on organizational change. With the help of concrete examples of sustainability‐driven change initiatives, we discuss how the two enterprise models differ and how the development of this new type of competence facilitates the transition from one to the other. Technical summary This article argues that the dynamic capabilities framework can be useful to study the evolutionary change processes that MNCs go through as they strive to innovate and adapt to societal pressures related to corporate sustainability. These pressures require MNCs to rethink and adapt core organizational elements and we argue that current dynamic capabilities theory is not sufficiently developed to explain these adaptive efforts. We suggest refining and extending theory in two directions: (1) distinguishing between behavioral, cognitive, and relational organizational elements as objects of the innovation, change, and learning dynamics; and (2) distinguishing between capabilities specific to generative variation and selection of innovative change and adaptation ideas from those specific to their diffusion and retention. Copyright © 2016 Strategic Management Society

Research summary:In this article, we study how a firm's stakeholder orientation affects the performance of its corporate acquisitions. We depart from prior literature and suggest that orientations toward employees, customers, suppliers, and local communities will affect long-term acquisition performance both directly and through its interactions with process characteristics, such as preacquisition relatedness and postacquisition integration. Analyses of data on a sample of 1884 acquisitions show overall a positive association between acquirers' stakeholder orientation and acquisition performance. In addition, we find support for a positive moderation of business relatedness on the performance impacts of stakeholder orientation. Structural integration has a similarly positive moderation effect only for some of the stakeholder categories. Managerial summary: Does collaboration with stakeholders during an acquisition pay off in terms of performance?The results of this research show that it is worth engaging stakeholders during the M&A process, but that the efficacy of involvement practices may depend on the type of stakeholders and the characteristics of the acquisition. While acquiring firms that take account of suppliers and local communities consistently overperform in their acquisitions, the inclusion of employees might be not beneficial (and even harmful) when the target firm operates in a dissimilar business or when managers do not plan to maintain it as a separate entity.

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This article examines how stakeholder orientation influences managers’ ability to learn from prior experience in corporate acquisitions. We argue that increased attention to primary stakeholders’ signals affects both positively and negatively managers’ capacity to analyze causal mechanisms in past acquisitions, draw inferences from them, and apply these inferences to subsequent acquisitions. On the one hand, attention to stakeholders’ inputs may enhance managers’ ability to interpret prior experience by giving voice to unnoticed details of past acquisitions. On the other hand, it may divert managers’ attention away from inferential mechanisms, reinforce confidence in existing practices, and limit managers’ ability to learn from acquisitions experience. We combine these theoretical effects to propose an inverted U‐shaped influence of stakeholder orientation on the relationship between acquisition experience and focal acquisition performance. We also propose that experience homogeneity and proximity to the knowledge domain of the focal firm act as boundary conditions on this influence. Analyses of a sample of 4619 corporate acquisitions by 504 US firms support our predictions.

Previous literature has shown that the relationship between accumulated experience and performance of a focal task is more complex than how it has been represented by the learning curve pattern. Experience in previous tasks can have a positive, negative or null effect on the performance of a focal task, depending on a number of conditions. The purpose of this paper is to advance the understanding of firm?s experiential learning by focusing on one specific condition that can influence this process -the relationships the firm has established with its stakeholders. We argue that a firm?s engagement with its stakeholders can have both positive and negative effects on its ability to extrapolate knowledge from previous experience and to apply it to a focal task. At the same time we propose that the sign and the magnitude of the effect may depend on the extent to which the focal task is novel compared to previously undertaken tasks. We test these arguments on a sample of corporate acquisitions from US listed firms. Consistent with the arguments developed, experience accumulated by stakeholder engaging firms are found to be useful (i.e. positively associated with focal task performance) when the focal task is familiar, and harmful when it is novel.Jelcodes:M10,- ABSTRACTPrevious literature has shown that the relationship between accumulated experience and performance of a focal task is more complex than how it has been represented by the learning curve pattern.Experience in previous tasks can have a positive, negative or null effect on the performance of a focal task, depending on a number of conditions. The purpose of this paper is to advance the understanding of firm's experiential learning by focusing on one specific condition that can influence this process -the relationships the firm has established with its stakeholders. We argue that a firm's engagement with its stakeholders can have both positive and negative effects on its ability to extrapolate knowledge from previous experience and to apply it to a focal task. At the same time we propose that the sign and the magnitude of the effect may depend on the extent to which the focal task is novel compared to previously undertaken tasks. We test these arguments on a sample of corporate acquisitions from US listed firms. Consistent with the arguments developed, experience accumulated by stakeholder engaging firms are found to be useful (i.e. positively associated with focal task performance) when the focal task is familiar, and harmful when it is novel.

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Who invests in sustainability as a strategic choice? We adopt a behavioral theory perspective to explain the heterogeneity of sustainability-driven investments. Building on problemistic search and organizational inertia arguments, and contrary to resource-based explanations, we argue that a firm’s competitiveness might actually reduce its likelihood to invest in sustainability. We also propose that less competitive firms invest in sustainability to improve their economic situation and, thus, that this choice results in positive performance effects. We further theorize that a firm’s level of commitment to its stakeholders will strengthen its likelihood to invest in sustainability. In a sample of 780 North American public companies in the period from 2007 to 2011, we find evidence to support our proposed model. Based on our findings, we draw implications for the further study of the behavioral roots of strategic change as well as for sustainability-oriented managerial practice and policy making.

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