Multistakeholder Agency: Stakeholder Benefit Alignment and National Institutional Contexts

Abstract

The alignment among multiple stakeholder benefits is a valuable performance indicator for the benefits generated by a firm for various stakeholders. Our research seeks to augment stakeholder-agency theory with an institutional perspective to analyze how national institutions affect stakeholder benefit alignment. We suggest that the current development of stakeholder-agency theory has overlooked the alignment of different stakeholders’ benefits and the external institutional contexts as critical determinants in ensuring such alignment. We conceptualize stakeholder benefit alignment as a positive relationship between different stakeholder groups’ benefits, and propose an institutional framework grounded in relative stakeholder salience. Using this framework, we argue that stakeholder benefits are better aligned when national institutions enhance the ease of withdrawal, legal protection, and private enforcement for intrinsically less salient stakeholders, and when a long-term oriented culture characterizes a society. We found supportive evidence by employing a meta-analytic approach based on 530 correlations from 94 primary studies representing 23 economies. Our study adds new insights to the stakeholder-agency literature by conceptualizing and quantitatively examining the degree of alignment across different stakeholder benefit dimensions, focusing on national formal and informal institutions as boundary conditions.

Multistakeholder Benefits: A Meta-Analysis of Different Theories

“…Unlike the integrative approach, the paradox lens does not require that all the conflicting goals be aggregated together into a new goal but regards all goals as separate and simultaneous demands. This is similar to the emerging stakeholder alignment view in the stakeholder literature (V. Z. Chen et al, 2021; Mitchell et al, 2015).…”

“…We draw on the emerging stakeholder alignment view in the stakeholder literature (V. Z. Chen et al, 2021; Mitchell et al, 2015), rooted in the idea of quasi-Pareto improvements (Basu, 2015; Fleurbaey & Schokkaert, 2013; Stavins et al, 2003).…”

“…As the empirical literature offers multiple measurements to conceptualize each stakeholder group (e.g., stock market- and accounting-based performance measurements for investor benefits), we treated the stakeholder groups as a latent multidimensional construct, implicitly assuming that the various dimensions of each stakeholder group are correlated, yet incomplete representations of overall performance (Miller et al, 2013). This approach of drawing correlations between outcome measures to measure alignment among them is a standard practice in recent meta-analyses in elite journals (Bergh et al, 2016; Berrone et al, 2020; V. Z. Chen et al, 2021; Karna et al, 2016).…”

“…Recent developments of the stakeholder literature resort to the premise of stakeholder benefit alignment to prescribe optimal corporate performance, such as Mitchell and colleagues’ (2015) value-creation stakeholder accounting and V. Z. Chen and colleagues’ (2021) multistakeholder agency framework.…”

“…Z. Chen and colleagues’ (2021) multistakeholder agency framework. The stakeholder alignment premise seeks to minimize the trade-offs among stakeholder dimensions of benefits (V. Z. Chen et al, 2021).…”