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HOW DO STAKEHOLDERS REACT TO A FIRM’S ORIENTATION

TOWARDS ITS STAKEHOLDERS?*

Flore BridouxAmsterdam Business School

University of AmsterdamPlantage Muidergracht12, 1018TV Amsterdam, The Netherlands

f.m.bridoux@uva.nl

Jan-Willem StoelhorstAmsterdam Business School

University of AmsterdamPlantage Muidergracht12, 1018TV Amsterdam, The Netherlands

j.w.stoelhorst@uva.nl

* Work in progress, February 2019. If you have comments or wish to cite this work, please

contact the first author.

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ABSTRACT

Stakeholder theory has gained a strong foothold in the strategy field, yet there is little empirical

work testing the mechanisms that stakeholder theorists have proposed to explain individual

stakeholders’ reactions to a firm’s treatment of its stakeholders. We combine a survey and an

experiment to fill this gap. Specifically, we first conceptualize two orientations that firms can

adopt in their dealings with stakeholders: a profit orientation and a stakeholder orientation. We

then propose three causal pathways to explain why a firm’s orientation may influence

stakeholders’ behavior: an instrumental, socio-emotional, and deontic pathway. With a new

measure (for the survey) and a manipulation (for the experiment) of a firm’s profit and

stakeholder orientation, we test the effect of these orientations on (prospective) employees’ and

customers’ intention to join the firm, intention to leave the firm, and pro-organizational behavior.

Our findings support the central claim of instrumental stakeholder theory, as well as our

conceptualization in terms of three causal pathways, but also call into question some of the ideas

in the theoretical literature about how a stakeholder orientation influences stakeholders’

behavior.

Keywords: stakeholder theory, microfoundations, stakeholder orientation, stakeholder behavior

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Stakeholder strategies have been recognized as being as important as growth and competitive

strategies for explaining value creation (Zollo, Minoja, & Coda, 2018). The growing interest of

strategy scholars for instrumental stakeholder theory, the stream of research explaining the

relationship between stakeholder management and firm performance (Donaldson & Preston,

1995), is therefore not surprising. The central claim of instrumental stakeholder theory is that

firms practicing what Jones, Harrison, and Felps (2018) refer to as ‘stakeholder theory-based

stakeholder management’ perform better than firms that are purely profit driven. To ground this

claim, scholars have theorized about the different mechanisms that may explain how a firm’s

treatment of its stakeholders affects their contributions to value creation. Most authors have

considered one or more specific mechanisms, such as fairness and commitment (Bosse &

Coughlan, 2016; Bosse, Phillips, & Harrison, 2009; Bridoux & Stoelhorst, 2014; Bridoux &

Vishwanathan, Forthcoming; Hahn & Albert, 2015; Harrison, Bosse, & Phillips, 2010; Jones et

al., 2018), while others have tried to offer a more general framework that ties some of these

mechanisms together (Bundy, Vogel, & Zachary, 2018; Harrison & Wicks, 2013). In contrast to

this rapidly growing body of theoretical work, there is little empirical work testing the

mechanisms theorized to explain the effect of a ‘stakeholder theory-based stakeholder

management’ on behaviors contributing to value creation, namely stakeholders’ intention to join

and stay with the firm, and pro-organizational behavior (Bosse & Coughlan, 2016; Bridoux &

Stoelhorst, 2014).

In this paper, we combine a survey and an experiment to empirically test whether the various

mechanisms suggested by stakeholder theorists explain how stakeholders react ‘stakeholder

theory-based stakeholder management’. We contribute to the literature on the microfoundations

of stakeholder behaviors in three ways. Our first contribution is theoretical. To be able to test the

propositions in the stakeholder literature, we develop a more precise conceptualization of what

practicing ‘stakeholder-theory based stakeholder management’ entails – resulting in a concept

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that we simply refer to as ‘stakeholder orientation’. Specifically, we argue for a distinction

between a stakeholder orientation and a profit orientation on the basis of the intentions

underlying a firm’s stakeholder management practices, with stakeholder-oriented firms

emphasizing morality over profits. We then develop a parsimonious conceptual framework to

organize the various mechanisms that have been proposed in the literature. Specifically, we

distinguish three causal pathways through which a stakeholder orientation affects individual

stakeholders’ contributions to value creation: an instrumental, socio-emotional and deontic

pathway.

Our second contribution is methodological. We develop a scale to measure a firm’s

stakeholder and profit orientation that can be used in surveys. Our third contribution is to shed

empirical light on a stream of research that has hitherto been largely theory driven. While our

results largely support the central claim of instrumental stakeholder theory that a stakeholder

orientation positively affect stakeholders’ intention to join, stay, and pro-organizational behavior,

as well as our conceptualization of three causal pathways, they also call into question some of

the ideas about the mechanisms that drive stakeholders’ reactions to a firm’s orientation

prevailing in the literature on the microfoundations of stakeholder behavior.

THEORY AND HYPOTHESES

Recent work in stakeholder theory (Bosse & Coughlan, 2016; Bridoux & Stoelhorst, 2014, 2016)

has adopted the central idea of the microfoundations movement in strategy and organization

research (Felin, Foss, & Ployhart, 2015), which proposes that macro-level phenomena such as

firm value creation ultimately need to be explained in terms of micro-level processes (Coleman,

1990). For stakeholder theory, this means examining its central claim ‒ that firms adopting

‘stakeholder theory-based stakeholder management’ will create more value than firms that are

purely profit driven (Jones et al., 2018) ‒ by studying how a firm’s treatment of stakeholders

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affects the behaviors of individual stakeholders that are closely related to value creation.

In line with this, we focus on individuals (i.e., natural persons rather than groups) who are

primary stakeholders – such as employees, customers, suppliers, financiers, and members of

local communities (Clarkson, 1995). And, as suggested by the literature (Bosse & Coughlan,

2016; Bridoux & Stoelhorst, 2014), we examine three types of behavior from these primary

stakeholders: entering a relationship with the firm, leaving the relationship with the firm, and

pro-organizational behavior. As primary stakeholders associate voluntarily with the firm (i.e.,

they have a choice of which firm to buy from, work for, etc.), these stakeholders’ decisions to

join and leave the firm are important for value creation (Bosse & Coughlan, 2016; Clarkson,

1995; Harrison & Wicks, 2013). Moreover, primary stakeholders who are in a relationship with

the firm contribute more to value creation if and when they do not only restrict their behavior to

what is contractually specified, but in addition exhibit pro-organizational behavior (Bosse &

Coughlan, 2016). Stakeholders behave pro-organizationally when they extend effort on activities

that benefit value creation but for which rewards are uncertain and difficult to enforce given the

absence of formal contractual agreement.

Whereas there is widespread consensus in the literature that ‘stakeholder theory-based

stakeholder management’ leads to higher value creation, the literature is surprisingly diverse

when conceptualizing what such stakeholder management entails and how (i.e., through which

mechanisms) it affects a firm’s value creation. We therefore take two steps to propose a testable

theoretical framework. First, as constructs need to be clearly defined to be measured (Podsakoff,

MacKenzie, & Podsakoff, 2016), we develop an unambiguous conceptualization of our

independent variable, which we label stakeholder orientation and contrast with profit orientation.

Second, in order to provide a parsimonious theory to test, we propose three causal pathways

through which stakeholder orientation affects the individual stakeholders’ behaviors that have

been argued to create value for the firm.

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Conceptualizing Firms’ Orientations towards Stakeholders

Given the widespread consensus about the central claim of stakeholder theory, definitions of its

independent variable are surprisingly diverse. It is not only that multiple labels have been used,

such as ‘managing for stakeholders’ (Freeman, Harrison, & Wicks, 2007; Harrison et al., 2010),

a ‘fairness approach’ (Bridoux & Stoelhorst, 2014), or a ‘moralist culture’ (Jones, Felps, &

Bigley, 2007), but definitions of these constructs also vary. For example, Harrison et al. (2010:

60-61) use the term managing for stakeholders “to describe firms that allocate both value and

decision-making influence widely across their primary stakeholders” irrespective of whether

these firms do so “because they believe (1) it is the right way to treat stakeholders (normative

view), (2) it is economically advantageous (instrumental view), or (3) both of these”. In contrast,

when defining their “fairness approach” as “interacting with stakeholders based on fairness

considerations”, Bridoux and Stoelhorst (2014: 107) refer to a specific motive driving firms’

behavior. A reference to fairness is also present, but along with other motives, in the explanation

offered by Freeman, Phillips, and Sisodia (Forthcoming: 9): “it is not about being overly stingy

or generous with stakeholders; it is about achieving balance, fairness, and harmony within the

whole system of stakeholders”.

Such diversity enriches theorizing, but is problematic for empirical work where constructs

need to be clearly defined in order to be measured adequately. We, therefore, followed the

recommendations of Podsakoff et al. (2016) for creating better construct definitions and used our

review of the instrumental stakeholder literature to identify necessary and sufficient attributes of

what we will label a ‘stakeholder orientation’, which we will contrast with a ‘profit orientation’.

In our search for necessary and sufficient attributes, our starting point is that what drives

individual stakeholders’ reactions are their perceptions of the firm’s

treatment of stakeholders (El Akremi, Gond, Swaen, De Roeck, & Igalens,

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2018; Ng, Yam, & Aguinis, Forthcoming). This led us to make three choices

among the options present in the instrumental stakeholder literature.

First, because of our focus on stakeholders’ perceptions, we identified the

motive driving firms’ behavior as a necessary attribute of our constructs.

Individual stakeholders’ perceptions are the results of subjective

assessments of both the impact of the firm’s behavior on stakeholders and of

the firm’s intentions underlying this behavior (Lange & Washburn, 2012).

Humans are very good at inferring intentions from others’ actions

(Blakemore & Decety, 2001). Furthermore, it is well established in

psychology that humans’ overall assessments of others are not just based on

the latter’s actions, but also on the inferred intentions underlying these

actions (Knobe, 2003).

Second, given that stakeholders’ perceptions are shaped by the firm’s behavior towards

stakeholders (i.e., actions and practices) and the intention underlying this behavior (i.e., the

values underlying these actions and practices), we chose to study stakeholder orientations rather

than stakeholder strategies. Practices and underlying motives are indeed better captured with the

concept of stakeholder orientations than with stakeholder strategies. Following Jones et al.

(2007: 142), we define a stakeholder orientation as shared beliefs, values,

and evolved practices regarding the management of relationships with

stakeholders. A stakeholder orientation is a facet of organizational culture

(Jones et al., 2007). In contrast, the firm’s stakeholder strategy is “the shared plans and

initiatives intended by general managers” with regard to what kind of relationship to form with

the different stakeholder groups (Jones et al., 2018: 373). A firm’s stakeholder orientation and

stakeholder strategy are likely to be often aligned given that strategy is usually a “direct

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manifestation of cultural assumptions about what business a firm is in and how it conducts that

business” (Barney, 1986: 657), but misalignment may exist when the plans and initiatives

intended by general managers are not implemented in the firm’s behavior towards stakeholders.

In addition, external stakeholders such as customers or community members may not be well-

informed about the firm’s stakeholder strategy. They form their perceptions through their

direct experience as stakeholder of the firm as well as indirectly through

what they learn about the firm’s treatment of stakeholders from information

intermediaries (such as the media, financial analysts, regulators, and consumer organizations)

that “disseminate information, frame issues, and assist stakeholders in making sense of firm

actions” (Zavyalova, Pfarrer, Reger, & Hubbard, 2016: 253).

Third, we decided to focus on two orientations. Almost all recent work in instrumental

stakeholder theory similarly uses a dichotomy. Although labels and contents differ, the

typical contrast is between a ‘stakeholder’ and a ‘profit’ way of managing stakeholders.

Here, we define a stakeholder orientation as values and practices towards stakeholders that

reflect a belief shared within the firm that relationships with stakeholders should be managed

based on moral norms. By putting moral norms central, our conceptualization is close to the

stakeholder cultures proposed by Jones et al. (2007). We define a profit orientation as values and

practices towards stakeholders that reflect a belief shared within the firm that relationships with

stakeholders should be managed with the objective to increase economic performance. This is

probably the orientation that first comes to mind for most strategy scholars as it typically serves

as the default notion about the purpose of the firm in the field. Our definition encompasses the

arms-length approach of Harrison et al. (2010) and Bridoux and Stoelhorst (2014), which

consists in distributing value, as well as voice in decision-making, to stakeholders based on their

bargaining power. In contrast to Harrison et al. (2010), however, our profit orientation also

includes the instrumental approach, whereby stakeholders (usually the primary ones) are treated

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well because it is economically advantageous in the short- or long-term (Jensen, 2002; Jones et

al., 2007).

On these definitions, the key distinction between the two orientations is not in the firm’s

behavior towards primary stakeholders, but in the underlying intentions that drive this behavior.

Making intentions central to the distinction between our stakeholder and profit orientations

solves the problem that it may not be easy to distinguish firms based on their behavior towards

primary stakeholders alone (Harrison et al., 2010). When firms face competitive product and

factor markets and therefore need to compete to attract primary stakeholders, treating primary

stakeholders well ‒ in the sense of “allocate[ing] both value and decision-making

influence widely across … primary stakeholders (Freeman et al., 2007)”

(Harrison et al., 2010: 60) ‒ is likely to be both the right thing to do and economically

advantageous. In other words, a profit-oriented firm may treat primary stakeholders well

because, from an instrumental standpoint, it is economically advantageous (a self-regarding

motive), whereas a stakeholder-oriented firm would treat stakeholders well because, from a

normative standpoint, it is the right thing to do (an other-regarding motive).

Whereas the two orientations may lead to similar behavior towards primary stakeholders

most of the time, this does not mean that the firm’s behavior never reveals the intentions

underlying its stakeholder management. There are two cases where we expect the firm’s

behavior towards stakeholders to be different according to the firm’s orientation and therefore to

reveal its intentions to its stakeholders. First, the key difference in underlying intentions is likely

to translate into different behavior towards the secondary stakeholders who are affected by the

firm’s activities but that have low power in their relationship with the firm and cannot, therefore,

take actions that would negatively affect the firm’s economic performance to a significant extent.

Secondary stakeholders who are affected significantly by the firm’s activities but

are powerless in affecting the firm’s economic outcomes are legitimate stakeholders from a

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moral point of view (Phillips, 2003) and should consequently be allocated value and voice (i.e.,

should be treated well) by firms with a moral orientation but are likely to be neglected by firms

with a profit orientation. Second, we expect the firm’s behavior to be revelatory of its intentions

in the presence of a trade-off between morality and economic performance. Such a trade-off

forces the firm’s managers to choose one over the other objective.

Theoretically, the literature often discusses stakeholder management as a dichotomous choice

between a stakeholder and a profit orientation. Accordingly, the theoretical papers on the

mechanisms linking stakeholder management to stakeholders’ behavior have usually focused on

the benefits of a stakeholder orientation, assuming, more or less explicitly, that the benefits of a

stakeholder orientation would be the drawbacks of a profit orientation (e.g., Bridoux &

Stoelhorst, 2014; Harrison et al., 2010). Therefore, in line with the literature, we only theorize

below about the mechanisms explaining the effects of a stakeholder orientation on stakeholders’

intention to join, intention to stay, and pro-organizational behavior.

Three Causal Pathways to Explain the Impact of a Stakeholder Orientation

Stakeholder theorists have suggested a variety of mechanisms that may mediate the impact of a

stakeholder orientation on stakeholders’ behaviors and the list is still getting longer as this

subfield of research in stakeholder theory is relatively recent (Bosse & Coughlan, 2016; Bosse et

al., 2009; Bridoux & Stoelhorst, 2014; Bridoux & Vishwanathan, Forthcoming; Bundy et al.,

2018; Hahn & Albert, 2015; Harrison et al., 2010; Harrison & Wicks, 2013; Jones et al., 2018).

There is therefore a need for a more parsimonious theory (Higgins, 2004) that answers the

question “Why these factors and not others?” (Bundy et al., 2018) and that helps guide further

research in identifying the additional mechanisms with the largest explanatory power for

instrumental stakeholder theory among the very large number of concepts that we could borrow

from the fields of organizational behavior and psychology.

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Following suggestions in the stakeholder theory literature (Harrison & Wicks, 2013; Tantalo

& Priem, 2016), we build on the literatures on organizational justice (Folger, 2001; Folger,

Cropanzano, & Goldman, 2005; Folger & Glerum, 2015) and employment psychological

contracts (Thompson & Bunderson, 2003) that both suggest that employee-organization

relationships comprise three dimensions: an instrumental, socioemotional, and deontic

dimension. This triptych rests on human needs that are not specific to employees and therefore

apply to all individual stakeholders. If stakeholder-firm relationships have three dimensions, then

we can expect three causal pathways by which a stakeholder orientation may affect stakeholder

behavior.

Instrumental pathway. The instrumental pathway captures the ability of the firm to fulfill a

stakeholder’s material needs, both in the present and the future. Providing outcomes that are

“material, or instrumental, in a sense that they are concrete and of practical use” (Elizur, Borg,

Hunt, & Beck, 1991: 23) is one of the ways in which a firm delivers value to its stakeholders

(Bridoux & Stoelhorst, 2014; Bundy et al., 2018; Harrison & Wicks, 2013). For example, high-

quality products and responsive customer support are material outcomes for customers.

Of the mechanisms proposed by stakeholder theorists, competence and needs-supplies fit are

related to a firm’s ability to fulfill stakeholders’ material needs in the present. Competence refers

to a stakeholder’s belief that the firm is able to deliver the material outcomes the stakeholder

expects to receive (Mayer, Davis, & Schoorman, 1995). Needs-supplies fit, which Bundy et al.

(2018) suggest as an operationalization of their “strategic complementarity” concept, are

stakeholders’ judgments of congruence between their material needs and the material outcomes

received in return for contributing to value creation (Cable & DeRue, 2002). For example, in the

case of employees, needs-supplies fit refers to “judgments of congruence between employees’

needs and the rewards they receive in return for their service and contributions on a job (e.g.,

pay, benefits, training)” (Cable & DeRue, 2002: 875).

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Fairness-to-self, a mechanism discussed by, inter alia, Bridoux and Stoelhorst (2014),

Harrison et al. (2010), Harrison and Wicks (2013) in the form of fairness to one’s own

stakeholder group, is a mechanism that is related to the firm’s ability to fulfill stakeholders’

material needs in the future. Controlling future outcomes is a fundamental need that has been

discussed under many different labels, such as a need for self-efficacy (Bandura, 1977) and need

for autonomy (Ryan & Deci, 2006). The absence of such control has a profound impact on the

regulation of emotion, cognition and physiology; in particular, the absence of control can be very

stressful (Leotti, Iyengar, & Ochsner, 2010). The perception that the firm is fair towards oneself

provides a sense of control over future outcomes, even when these outcomes are actually under

the firm’s managers’ control. In line with this, the instrumental model of justice (Thibaut &

Walker, 1975) proposes that the firm’s fairness towards oneself is a heuristic stakeholders use to

forecast their future material outcomes from the relationship with the firm.

Stakeholder theorists have argued that stakeholder-oriented firms are in general better able to

meet stakeholders’ material needs because, e.g., the stakeholders of such firms share more

nuanced information about their utility functions, which enables the firm to better meet

stakeholders’ needs, innovate more, and adopt better to environmental changes than profit-

oriented firms (Harrison et al., 2010). In turn, stakeholders reciprocate getting more than would

be necessary to simply retain their willful participation by joining and staying with the firm, and

putting efforts in creating value (Bosse et al., 2009; Bridoux & Stoelhorst, 2014, 2016; Hahn,

2015; Hahn & Albert, 2015; Harrison et al., 2010). Thus, we expect that:

H1a. The instrumental pathway mediates the positive effect of a stakeholder orientation on

stakeholders’ pro-organizational behavior.

H1b. The instrumental pathway mediates the positive effect of a stakeholder orientation on

stakeholders’ intention to associate.

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H1c. The instrumental pathway mediates the negative effect of a stakeholder orientation on

stakeholders’ intention to leave.

Socioemotional pathway. The socioemotional pathway relates to the capacity of the firm to

fulfill stakeholders’ socioemotional needs, including the need for self-esteem and for the prestige

that comes from belonging to groups (Harrison & Wicks, 2013) – in particular high-status groups

(Bridoux & Vishwanathan, Forthcoming). Stakeholder theorists have proposed a number of

mechanisms that belong to this pathway, such as value congruence perceptions (Bundy et al.,

2018), affective commitment, and organizational identification (Bosse & Coughlan, 2016; Bundy

et al., 2018). Value congruence perceptions, also labeled value fit, are a stakeholders judgments

of congruence between their personal values and the firms’ values and culture (Cable & DeRue,

2002). Affective commitment is defined as “an affective or emotional attachment to the

organization” (Allen & Meyer, 1990: 2). Value fit and affective commitment are closely related

to organizational identification, as people who perceived a good fit with the firm are likely to

define themselves in terms of the organization (Saks & Ashforth, 1997) and strongly committed

individuals identify with the organization (Allen & Meyer, 1990).

A stakeholder orientation affects stakeholders’ behavior through a socioemotional pathway

because individuals experience pride in reaction to positive information about a group to which

they belong (Helm, 2013). Pride is an emotion that is especially strong in driving behavior

(Tracy & Robins, 2007). Being associated with a firm with a good reputation provides prestige:

individuals “feel proud of being part of a well-respected organization, as it strengthens their

feelings of self-worth to bask in reflected glory” (Smidts, Pruyn, & Van Riel, 2001: 1051). For

prospective stakeholders, this relationship works through the pride that these stakeholders

anticipated from their association with the firm, i.e., anticipated pride (Cable & Turban, 2003;

Jones, Willness, & Madey, 2014).

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A stakeholder orientation contributes to stakeholders’ (anticipated) pride through the prestige

that associating with a firm that does good bestows on them (Jones et al., 2014; Rupp, Shao,

Thornton, & Skarlicki, 2013). A good treatment of all stakeholders, including the ones that have

little power to influence the firm’s financial performance, enhances the firm’s reputation in the

eyes of outsiders (Brammer & Millington, 2008; Brammer & Pavelin, 2006). In turn, being

associated with a firm with a good reputation provides prestige to stakeholders: stakeholders “feel

proud of being part of a well-respected organization, as it strengthens their feelings of self-worth to

bask in reflected glory” (Smidts et al., 2001, p. 1051). As a stakeholder orientation makes

stakeholders feel good about themselves, they experience higher value fit, are more committed

affectively to and identify more with the firm, and this in turn motivates them to join, stay with,

and to contribute to, the collective (Chun, Shin, Choi, & Kim, 2013; Helm, 2013; Ng et al.,

Forthcoming). In line with these arguments, Sen and Bhattacharya (2001) found that a firm’s

corporate social responsibility (CSR) increases consumers’ identification with the firm and Ng et

al. (Forthcoming) have shown that these mechanisms are also at work in the relationship between

CSR and employees’ turnover. We therefore hypothesize:

H2a. The socioemotional pathway mediates the positive effect of a stakeholder orientation on

stakeholders’ pro-organizational behavior.

H2b. The socioemotional pathway mediates the positive effect of a stakeholder orientation on

stakeholders’ intention to associate.

H2c. The socioemotional pathway mediates the negative effect of a stakeholder orientation on

stakeholders’ intention to leave.

Deontic pathway. The deontic pathway relates to the capacity of the stakeholder-firm

relationship to fulfill a stakeholder’s need for morality. As Thompson and Bunderson (2003)

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recognized for employees, stakeholders’ perceptions of the firm’s obligations towards its

stakeholders may not only be grounded in personal entitlements (what are the material and

socioemotional benefits for myself?), but also in the promotion of what is morally right.

Similarly, in the field of organizational justice, the ‘deonance model’ (Folger, 2001; Folger &

Glerum, 2015) proposes that the firm-employee relationship has a deontic dimension that is

related to moral duty and obligation and that is distinct from an instrumental and relational

pathway (Cropanzano, Byrne, Bobocel, & Rupp, 2001). Specifically, the deonance model argues

that a firm’s moral treatment of other stakeholders may be of value to employees because it

fulfills their need to do the right thing out of a basic respect for human dignity and worth.

Deonance helps explain that stakeholders may care about how other stakeholders are treated,

even when they are in no way affected personally (Rupp et al., 2013).

Stakeholder theorists have identified two mechanisms that relate to the deontic pathway:

stakeholders’ perceptions of the firm’s fairness towards other stakeholders (Bridoux &

Stoelhorst, 2014; Bridoux & Vishwanathan, Forthcoming) and the assessment of the firm’s

character (Bundy et al., 2018), where character specifically refers to perceptions that the firm

does not just act on an egocentric profit motive, but has others’ best interests at heart, also known

in the literature as benevolence or warmth (Aaker, Vohs, & Mogilner, 2010; Mayer et al., 1995).

Since our definition of a stakeholder orientation follows the idea that stakeholder-oriented

firms care for their stakeholders out of moral principles (Jones et al., 2007; Sisodia, Wolfe, &

Sheth, 2003), we would expect stakeholders to perceive stakeholder-oriented firms as more

benevolent and more concerned with fairness towards all stakeholders, therefore, other

stakeholders too. CSR studies suggest that this will, in turn, lead to higher intentions to join and

stay with the firm as well as more pro-organizational behavior (Ellemers, Kingma, van de Burgt,

& Barreto, 2011; Rupp et al., 2013). For example, van Prooijen and Ellemers (2015) showed that

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an organization’s morality had a stronger impact on the organization’s attractiveness than its

competence. Therefore:

H3a. The deontic pathway mediates the positive effect of a stakeholder orientation on

stakeholders’ pro-organizational behavior.

H3b. The deontic pathway mediates the positive effect of a stakeholder orientation on

stakeholders’ intention to associate.

H3c. The deontic pathway mediates the negative effect of a stakeholder orientation on

stakeholders’ intention to leave.

The mechanisms in the instrumental and socioemotional pathways include the three sources of

value created for stakeholders of Harrison and Wicks (2013), and the two organization-

stakeholder fit dimensions from Bundy et al. (2018). In addition, the mechanisms in the deontic

pathway capture the fact that stakeholders could assess a firm as driven by moral principles

without perceiving a fit between their own moral values and those of the firm (e.g., seeing Nike’s

Colin Kaepernick campaign as expressing concern with the rights of African Americans while

perceiving a conflict with their own nationalistic values (BBC, 2018)).

To test our hypotheses, we conducted two studies: a survey and an experiment. In the survey,

we investigate employees’ and customers’ pro-organizational behavior and intention to leave. In

the experiment, we investigate prospective employees’ and prospective customers’ intention to

join the firm. An experiment has the advantage of avoiding a self-selection bias through random

assignment to a stakeholder- or profit-oriented firm and helps give confidence that our

relationships are causal. In line with Hillenbrand et al. (2013), we selected customers and

employees as stakeholders, as they usually have the greatest impact on firms’ value creation.

This selection also allows us to draw the respondents for the two stakeholder groups from the

same participant pool in Study 1 and 2, which within each study increases comparability across

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the groups. Both studies were approved by the ethics committee of the authors’ university.

STUDY 1

Participants and Procedure

We conducted an online survey with 500 adult participants located in the U.S. recruited via

Amazon Mechanical Turk (MTurk), an online crowdsourcing service that makes it possible for

individuals and businesses to outsource small web-based tasks to anonymous online workers (for

details about MTurk and the quality of data collected via MTurk (see Buhrmester, Kwang, and

Gosling (2011) and Hauser and Schwarz (2016)). Participants were paid U.S. $ 1.1 for an online

study that took about 10 minutes to complete. On the basis of an attention check (“This

organization, please answer never to this question”) 59 respondents were excluded, yielding a

usable sample of N = 441. In that usable sample, 45% of participants were female, they were

35.8 years old on average (SD=10.9), and 49% had a at least a BSc degree.

After reporting some demographic information, participants answered a series of four

questions to determine whether they would take the survey as an employee or as a customer. The

267 participants who reported being employed more than 16 hours a week by a for-profit

organization of which they were not the main owner answered as employees and were

subsequently asked a number of control questions about their employer and their position in the

organization (see controls below). The other participants answered as customers (N = 174) and

were asked to choose a company “they buy from and know quite well” from a list of 11 large

U.S. (58 Walmart, 26 Apple, 23 McDonald’s, 14 Costco, 12 Microsoft, 10 Starbucks, 8 Nike, 8

Whole Foods Market, 6 Amazon, 1 United Airlines, 1 Southwest Airlines) or to indicate another

large U.S. company they buy from (7). After choosing a company, participants answered two

control questions about their relationship with this organization (see controls below).

Participants then assessed the firm’s orientations towards stakeholders, answered the

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questions related to the dependent variables and mediators, and the questions related to the

controls for individual differences. We counterbalanced the order of the questions for the

dependent variables and mediators (either dependent variables then mediators, or mediators then

dependent variables). We also randomized the order of presentation of the mediators. At the end

of the survey, participants were given a code to enter in MTurk to receive their compensation.

Measures

Wherever possible we chose validated measures that were as similar as possible for employees

and customers in order to make comparisons meaningful. Unless stated otherwise, the answer

scale was a 7-point agreement scale ranging from 1 = strongly disagree to 7 = strongly agree. All

measures are available in Appendix A.

Stakeholder and profit orientations. To develop scales for the two orientations, we developed a

preliminary set of 12 items (6 for each orientation) that tap into the aspects distinguishing the

two orientations: the key objective of the organization (morality or profit?), the objective that

dominates when a trade-off between profit and morality is present, and the treatment of

stakeholders who cannot much affect financial performance (does the organization care about the

stakeholders that cannot affect much financial performance?). We then asked three scholars

familiar with stakeholder theory to review our preliminary set and provide feedback on the

validity and completeness of the survey items before generating the list of items to validate.

Next, we pre-tested our items in a separate online survey. We recruited 500 participants on

MTurk, whom we paid U.S. $1 to complete a 6-8-minute questionnaire. We eliminated the

responses of 106 participants based on an attention check (“This organization please answer I do

not know”) embedded in a long scale measuring CSR. Applying the procedure described above

for the main survey, participants who reported being employed more than 16 hours a week by a

for-profit organization of which they were not the main owner rated the organization they work

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for (N=216). The other participants (N=179) chose “the company they know best” from a list of

8 large U.S. companies (90 rated Amazon.com, 37 Walmart, 29 Apple, 8 Microsoft, 9 United

Airlines, 5 Southwest Airlines, 1 Whole Foods Market, none Zappos).

Participants rated the organization on three scales: (1) our 12 items for stakeholder and profit

orientation presented in random order with an answer scale ranging from 1=never to 7=always,

(2) 4 items to measure fairness, adapted from the organizational justice scale of Ambrose and

Schminke (2009) and (3) 16 items from the CSR scale developed by El Akremi et al. (2018) with

an answer scale ranging from 1=never to 7=always and an option “I do not know”. We included

the fairness and CSR items to investigate discriminant validity: our stakeholder orientation

construct should relate positively to, but be distinct from, CSR (Phillips, Freeman, & Wicks,

2003) and perceived fairness – which is a consequence of the firm’s stakeholder orientation

(Bridoux & Stoelhorst, 2014; Harrison & Wicks, 2013). We selected the items of the CSR scale

most closely related to firms’ treatment of primary stakeholders, which makes our test of

discriminant validity more stringent. We added an option “I do not know” to the answer scale of

El Akremi et al. (2018) because they validated the scale for employees, while outside observers

may have less information about practices towards some stakeholders. Participants who

answered as outsiders indeed often answered “I do not know” for practices targeted at

stakeholders others than customers (e.g., 39 out of 179 participants chose that answer for the first

item of community-oriented CSR; while only 11 out of 216 employees gave this answer).

Consequently, we did not include the CSR items in the confirmatory analyses for this category of

respondents. For employees, we imputed as value for the CSR items for which respondents

answered “I do not know” the (average) value on the other items for the same CSR dimension.

We dropped 6 respondents answering “I do not know” on all items related to one of the CSR

dimensions, leaving 210 employees’ responses to factor analyze.

To determine the factor structure of the 12-item scale, we performed an exploratory factor

20

analysis (EFA) using principal axis factoring and promax rotation on the items pool on the entire

sample (N=394). As reported in Table 1, based on a minimum cutoff level of 0.50 for a factor

loading (El Akremi et al., 2018), all items load sufficiently on the factors to which they belong

and cross-loadings are low enough. We thus retained all 12 items: 6 items for the stakeholder

orientation (α=0.96) and 6 for the profit orientation (α=0.90). While the loading of the last item

for the profit orientation (“This organization is primarily concerned with making money”) is well

above the minimum cutoff level, with a value of 0.68 it is significantly below the loading of the

other items. Therefore, we worded this item more strongly in the survey for the main study

(“This organization is only concerned with making money”).

Insert Table 1 about here

We conducted a series of confirmatory factor analyses (CFA) to test the convergent and

discriminant validity of the two orientations, as detailed in Tables 2 and 3. In terms of convergent

validity, we found large (more than 0.50, cf. Kinicki, Jacobson, Peterson, and Prussia (2013))

relationships of the two orientations with fairness and CSR. For example, for employees the

correlation of the profit orientation with fairness is -0.66 and with CSR -0.56 (see Table 2). For

discriminant validity, we conducted a series of CFAs to compare the chi-square differences

between two structural equation models in which the two orientation were distinct from each

other and from fairness and CSR, or all the constructs were treated as unitary (Bagozzi, Yi, &

Phillips, 1991). As reported in Table 3, the model that best fits the data is the one with the distinct

constructs, both for the sample of employees and for the sample of outside observers.

Insert Tables 2 & 3 about here

In our main Study 1, the 6-item scales for the two orientations also had high internal

consistency. For stakeholder orientation the Cronbach’s alpha in the employee sample (hereafter

αemp) was 0.94 and for the customer sample (hereafter αcust) of 0.95. Internal consistency estimates

for the profit orientation are αemp = 0.88 and αcust = 0.88.

21

Stakeholders’ responses. In the main study, we captured pro-organizational behavior for

employees with Organizational citizenship behavior targeted at the organization (OCB),

measured with the 8-item scale of Lee and Allen (2002). These items aim to tap behaviors that

are clearly beneficial to the organization and are somewhat costly to perform. OCB is pro-

organizational behavior that has been extensively researched in the organizational behavior

literature (Podsakoff, MacKenzie, Paine, & Bachrach, 2000).The answer scale ranged from 1 =

never to 7 = always and internal reliability was high (α=0.95). We measured employees’

intention to leave with the first 3 items from the 5-item scale of voluntary Turnover intention by

Crossley, Bennett, Jex, and Burnfield (2007) (α=0.97).

Our measure of pro-organizational behavior for customers was (positive) Word-of-mouth

(WOM). Worth-of-mouth refers to the likelihood that respondents will recommend a service to

others, which is beneficial to the organization. Marketing researchers have identified positive

word-of-mouth as one of the most important responses to understand the strength of a customer’s

relationship with the firm (Brown, Barry, Dacin, & Gunst, 2005). We used the 4 items from

Brown et al. (2005) that are about recommending the organization to “others” in general. The 7-

point answer scale ranged from 1 = never to 7 = always and internal consistency was good

(α=0.92). We measured customers’ intention to leave with the last 4 items of the 6-item scale for

customers’ Exit intention from Ping (1995), which had a satisfactory reliability (α=0.80).

Mediators. To measure respondents’ assessment of Competence and Character, we extended the

semantic differential seven-point scale used by Sirdeshmukh, Singh, and Sabol (2002) with items

that more generally describe firms’ warmth and competence (Aaker et al., 2010). For

competence, the scale ranged from very incompetent/very competent, very undependable/very

dependable, very inefficient/very efficient, very unskilled/very skilled, very capable/very

incapable. As EFA revealed that very undependable/very dependable was cross-loading on

character, we did not include it in the analyses reported below. The rest of the competence scale

22

had good reliability (αemp = 0.94 and αcust = 0.89). For character, the scale ranged from very low

integrity/of very high integrity, very dishonest and untrustworthy/ very honest and trustworthy,

very unkind/very kind, very cold/very warm, and very ungenerous/very generous (αemp = 0.95

and αcust = 0.95). The items for competence and character were presented together in a random

order.

We measured Fairness towards local communities and Fairness towards one’s own

stakeholder group (e.g., towards employees for respondents who answered the questionnaire

with their employer as the target firm) with the scale by Ambrose and Schminke (2009) that we

used in the pre-test. We dropped the second item because this reverse-coded item was not

loading high enough on the corresponding factor in the pre-test, leaving 3 items. Reliability was

high for both local communities (αemp = 0.97 and αcust = 0.98) and own stakeholder group (αemp =

0.97 and αcust = 0.95). We selected local communities as the target of fairness towards another

stakeholder group because customers are most likely to be knowledgeable about community-

related practices. To measure Affective commitment, we constructed a 4-item scale blending the

scale that Mende, Bolton, and Bitner (2013) developed for customers and the one that Meyer,

Allen, and Smith (1993) proposed for employees to have items that would make sense for both

groups (αemp = 0.95 and αcust = 0.89). Following Carmeli, Gilat, and Waldman (2007), for

Organizational identification we used four items of the well-established measure developed by

Mael and Ashforth (1992) (αemp = 0.95 and αcust = 0.89). To measure Value fit and Needs-supplies

fit, we adopted the 3-items scales proposed by Cable and DeRue (2002). For customers, we

adapted the scale for needs-supplies fit in order to refer to the product/service provided by the

company rather than a job. Scales were internally consistent for both Value fit (αemp = 0.97 and

αcust = 0.97) and Needs-supplies fit (αemp = 0.96 and αcust = 0.91).

Control variables. We collected a number of control variables that we included in our tests of the

hypotheses. For both employees and customers, we controlled for Gender, Age, Education level

23

(aggregated based on preliminary analyses into a dummy with value 1 if respondents have less

than a bachelor degree), and Nationality (with 98% of our respondents being American, this

control variable was not significant in any of our analyses and we took it out). As we

counterbalanced the order of presentation of the dependent variables and mediators, we included

a dummy variable (MediatorFirst) with value 1 if respondents rated the mediators first.

We also controlled for three individual characteristics that could affect our mediations. First,

as the literature has argued for an impact of stakeholder orientation under the assumption that

stakeholders have the possibility to leave the firm if they are dissatisfied, we included a scale

measuring Continuance commitment, whose 4 items captures the perceived scarcity of other

firms to join. We borrowed these 4 items from Meyer et al. (1993) and we adapted them slightly

for customers (αemp = 0.86 and αcust = 0.89). Second, we measured the Internalization dimension

of Moral identity using the 5-item measure of Aquino and Reed (2002) (αemp = 0.82 and αcust =

0.83). Moral identity is a specific kind of self-conception organized around a set of moral traits

(Aquino & Reed, 2002). People high on moral identity feel a need to act morally in order to be

true to themselves (Aquino, Freeman, Reed, Lim, & Felps, 2009; Reynolds & Ceranic, 2007).

The items related to internalization capture the degree to which the moral traits “caring,

compassionate, fair, friendly, generous, helpful, hardworking, honest, and kind” are central to the

self-concept with items such as “It would make me feel good to be a person who has these

characteristics”. Third, we measured Social desirability bias using the 13-item scale identified as

the best option by Ballard (1992) and Loo and Loewen (2004). We included this control variable

in our measurement models, construction of our latent variables, and regression analyses because

social desirability could inflate our respondents’ scores for pro-organizational behavior and

deflate the scores for intention to leave, as well as be a source of common method bias.

For employees, we also controlled for Tenure with the firm, the Number hours they work per

week for that firm, Job type (employee, supervisor, middle manager, upper manager, and top

24

manager), and Size of the firm (number of employees). Based on preliminary regression analyses,

we aggregated our many categories for these controls (see correlation tables). We also controlled

for the Industry in which their firm has its most important activities with a list of 15 industries

and an additional ‘other’ category. In the analyses reported here, we omitted the dummies for the

industries that were not related to our dependent variables. For customers, we controlled for how

long they have been buying from the firm (Tenure), collapsing our initial more fine-grained

categorical variable into three categories: less than 5 years, between 5 and 15 years, and more

than 15 years. We also measured Buying frequency as described in Appendix A.

Assessment of measures and construction of the three pathways. We used CFA, first, to assess

our measures and, second, to obtain latent variables for our observed variables that account for

the variance linked to social desirability, as well as to build latent variables for the three

pathways to which, according to our theory, the various items listed under mediators belong.

After allowing a few of the error terms to covary, for the employee dataset the fit of the

measurement model with 15 factors (OCB, Turnover intention, Stakeholder orientation, Profit

orientation, Competence, Needs-supplies fit, Fairness towards employees, Character, Fairness

towards communities, Value fit, Affective commitment, Organizational identification,

Continuance commitment, Moral identity, and Social desirability bias) was good: the χ 2/df ratio

(CMIN/df) of 1.68 was lower than 2.00, the incremental fit index (IFI) and the comparative fit

index (CFI) values of 0.92 exceeds the recommended threshold of 0.90 and the root-mean-square

error of approximation (RMSEA) was 0.05. Loading the items measuring the mediators on their

corresponding pathway (Instrumental, Socioemotional, or Deontic) and allowing the error terms

to covary for items related to the same variable, we obtained a 10-factor model (OCB, Turnover

intention, Stakeholder orientation, Profit orientation, 3 pathways, Continuance commitment,

Moral identity, and Social desirability bias) with fit a bit lower than the fit of the 15-factor model

but still good (CMIN/df= 1.87, IFI= 0.90, CFI=0.90, RMSEA=0.06). The model with the three

25

distinct pathways fitted the data significantly better than alternative models that merged two or

all the pathways, which supports the distinctiveness of the pathways.

For the customer dataset, the fit of the 15-factor measurement model was satisfactory

(CMIN/df= 1.75, IFI= 0.85, CFI=0.85, RMSEA=0.07), but the fit of the 10-factor model

including our three pathways was not good enough (CMIN/df= 1.88, IFI= 0.82, CFI=0.81,

RMSEA=0.07). In order to achieve an acceptable fit, we removed the first two items of the

Affective commitment scale from the socioemotional pathway and we removed the variable

Value fit (CMIN/df= 1.73, IFI= 0.85, CFI=0.85, RMSEA=0.06). An EFA extracting a fixed

number of three factors revealed that the first two items of the affective commitment scale were

loading on all three pathways almost equally and that for customers all the items of Value fit

were loading more on the deontic pathway than on the socioemotional one (we come back to this

point in the discussion). The resulting model with the three distinct pathways fitted the data

significantly better than more parsimonious models with two or the three pathways together.

Results

Table 4 shows the descriptives and correlations among the variables needed to test our

hypotheses for the employee sample. Table 5 contains this information for the customer sample.

Insert Tables 4 & 5 about here

We used parallel multiple mediator models in order to test for the indirect effects of

stakeholder orientation on our dependent variables through the instrumental, socioemotional and

deontic pathways. Testing the mediators while controlling for the other two has several

advantages (Preacher & Hayes, 2008). First, it helps us reduce the bias owing to omitted

variables that would be present if we estimated the indirect effects one by one while theorizing

that the three mechanisms work simultaneously. Second, it allows a formal comparison of the

size of the indirect effects of the orientations through the pathways. We used the PROCESS

26

macro for SPSS developed by Hayes to bootstrap our estimates as recommended by Preacher and

Hayes (2008). We make inferences about mediation based on the tests of unique indirect effects,

which are presented in Table 6. Coefficients for the paths illustrated in Figure 1 are in Table 7.

Insert Tables 6 & 7 and Figure 1 about here

First, we observe the expected positive total effect of stakeholder orientation on pro-

organizational behavior (Models 1 and 5 in Table 6) and the expected negative total effect on

employees’ turnover intention (Model 1). We do not find, however, the expected negative total

effect of stakeholder orientation on customers’ exit intention. With regard to the indirect effects

of stakeholder orientation on pro-organizational behavior through our three pathways, the results

reported for Model 1 in Table 6 show that H2a (socioemotional pathway) and H3a (deontic

pathway) were supported for employees’ OCB. Table 7 shows that all four paths associated with

these mediating effects are significant and positive (paths 2, 3, 11, and 12). H1a (instrumental

pathway) was not supported: contrary to our expectations, stakeholder orientation affects OCB

negatively through the instrumental pathway (Model 1 in Table 6) because the path from the

instrumental pathway to OCB is negative (Table 7, path 10). Despite this unexpected negative

impact, the total indirect effect of all three paths is significant and positive (Model 1 in Table 6).

For customers’ WOM, we similarly find support for H2a and H3a, but not for H1a (Model 5 in

Table 6). Here, the mediation through the instrumental pathway is not significant. Specifically,

the path from the instrumental pathway to WOM is not significant (Table 7, path 10).

Turning to intention to leave, we see that for employees (Model 2 in Table 6) all three

pathways mediate, but only the instrumental pathway works in the way we expected: showing a

negative effect of stakeholder orientation on employees’ turnover intention. In line with our

expectations and as shown in Table 7, path 1 from stakeholder orientation to the instrumental

pathway is positive and path 10 from the instrumental pathway to turnover intention is negative.

The results for the two other pathways do not support H2c and H3c and are surprising: they

27

suggest that stakeholder orientation increases turnover intention through the socioemotional and

deontic paths when controlling for the instrumental one. The socioemotional pathway has a

unique indirect effect that is positive, like the deontic pathway, but significantly smaller (contrast

between socioemotional and deontic= -0.43; SE = 0.19, LLCI = -0.81, ULCI = -0.08). With

regard to customers’ exit intention, the results (Model 6 in Table 6) show no mediation through

the three pathways, therefore H1c, 2b, and 3b are not supported for customers.

To supplement our test of the hypotheses, we also reported the total and indirect effects of

profit orientation through the three pathways in Table 6 (Models 3, 4, 7 and 8). While profit

orientation is positively related to employees’ and customers’ intention to leave, it is not

significantly related to pro-organizational behavior. We see that profit orientation relates

negatively to the three paths for employees but only to the deontic pathway for customers (Table

7, paths 4-6). In Table 6, the results show that profit orientation has a positive indirect effect on

OCB through the instrumental pathway and a negative indirect effect through the deontic

pathway, while it has a negative indirect effect on turnover intention through the instrumental

pathway and a positive indirect effect through the deontic pathway. These results mirror the

results for stakeholder orientation. The difference is in the absence of mediation through the

socioemotional pathway. The same holds for the customer sample, where we do not see the

indirect effect through the socioemotional pathway for WOM. Like for stakeholder orientation,

none of the pathways mediates the relationship between profit orientation and exit intention.

Thus, in Study 1 we found some support for an impact of a stakeholder orientation on

stakeholders’ reactions through the three pathways. However, establishing the causal nature of

relationships in a cross-sectional survey like Study 1 is difficult. Specifically, the results in Study

1 may suffer from a bias due to selection and self-selection of employees and customers into

firms on the basis of the orientations, from omitted factors, and from a common-method bias as

the stakeholder orientations, mediators, and dependent variables are all rated by our respondents.

28

To address these weaknesses of Study 1, we conducted an experiment. An experiment allows us

to test the indirect effects with an exogenous variable for our orientations (rather than self-

reported ratings). In addition, random assignment avoids the issues of omitted variables,

selection, and self-selection. By using random assignment and systematically varying only

theoretically relevant information (here the orientations), we can be confident that observed

differences in our dependent variables are due to the manipulated variable. Previous work has

successfully implemented experimental designs to study prospective and current employees’ and

customers’ reactions to firms’ CSR (Greening & Turban, 2000; Jones et al., 2014; Sen &

Bhattacharya, 2001). In our experiment we tested the mediating effects of the three pathways on

(prospective) employees’ and customers’ intention to join the firm.

STUDY 2

Participants and Procedure

Participants were 376 first- and second-year bachelor students in business administration at a

large Dutch university who received course credits for their participation. They were 20.34 year-

old on average (SD= 1.96), 55% female, 41% Dutch (80% European), 74% second-year students.

We used a between-subject experimental design where participants were randomly assigned

(1) to read a vignette about a stakeholder- or a profit-oriented firm and (2) to the role of either

prospective employee or prospective customers. Vignette studies have often been used in

research on stakeholders’ reactions to CSR (e.g., Rupp et al., 2013; Sen & Bhattacharya, 2001;

Sen, Bhattacharya, & Korschun, 2006; White, MacDonnell, & Ellard, 2012). After reading the

vignette, participants rated their intention to join the firm, the mediators, and finally reported

demographics information and answered personality scales.

Firm orientation manipulation. Based on our definitions and our validated scale for the

orientations towards stakeholders, we created two vignettes (see Appendix B). Our vignettes

29

portrayed a hypothetical company ABC that sells electronic goods and is doing well financially.

We chose this type of firm because our participants are significant patrons of consumer

electronics retailers making this context relevant for them (Wagner, Lutz, & Weitz, 2009: 80).

To enhance credibility, the information on company ABC’s stakeholder management was

described as provided by an independent and highly respected rating agency (Mohr & Webb,

2005). In order to manipulate the firm orientation in these vignettes, we tapped into the three

aspects distinguishing the two orientations: the treatment of stakeholders who cannot much affect

financial performance (1st paragraph), the objective that dominates when a trade-off between

profit and morality is present (2nd paragraph), the key objective of the organization (3rd

paragraph). After stating each aspect generally, a concrete example was given.

Responses to the manipulation check item about the firm’s morality (semantic differential

seven-point scale ranging from very immoral to very moral) was significantly higher for the

stakeholder orientation (SO subscript) than for the profit orientation (PO subscript) in the

employee sample (MSO= 5.88, SDSO= 1.28, MPO= 3.00, SDPO= 1.36, F(1, 189)= 225, p<0.001) as

well as in the customer sample (MSO= 6.11, SDSO= 1.30, MPO= 2.65, SDPO= 1.26, F(1, 187)= 341,

p<0.001). Similarly, responses to the manipulation check item about the firm’s profit-orientation

(semantic differential seven-point scale ranging from not very profit-oriented to very profit-

oriented) was significantly higher for the profit orientation than for the stakeholder orientation in

the employee sample (MSO= 4.01, SDSO= 1.54, MPO= 6.78, SDPO= 0.62, F(1, 189)= 268, p<0.001)

and in the customer sample (MSO= 3.97, SDSO= 1.51, MPO= 6.58, SDPO= 1.00, F(1, 187)= 197,

p<0.001). Participants also perceived the hypothetical firms to be realistic: the mean on a 7-point

agreement scale for the item “I had no difficulty imagining Company ABC” is above 4.50 for

both orientations in both samples.

Measures

30

All the scales can be found in Appendix A.

Intention to join. For prospective employees, we captured intention to join with Job pursuit

intention measured with a four-item scale coming from Greening and Turban (2000) (α= 0.94).

For customers the dependent variable is Purchase intention. The four-item scale is adopted from

White et al. (2012) and has a good reliability (α=0.91).

Mediators. We measured Competence, Character, Fairness towards communities, and Value Fit

with the scales used in Study 1, simply replacing “the/this organization” by “ABC”, the name of

the hypothetical firm. Internal consistency was good for Character (αemp = 0.92 and αcust = 0.94)

and Fairness towards communities (αemp = 0.96 and αcust = 0.96). For Competence, internal

consistency was satisfactory in the customer sample (α=0.76) but falling just short of the 0.70

threshold (Nunnally & Bernstein, 1994) in the employee sample (α=0.69). For Fairness towards

respondents’ own stakeholder group, we rephrased slightly the items used in Study 1 in order to

make them fit better the case of prospective stakeholders. For example, the first item for

Fairness towards employees becasme “ABC is probably fair towards customers.” in Study 2.

The scale was internally consistent (αemp = 0.95 and αcust = 0.93). Instead of Affective commitment

and Organizational identification, which are not meaningful mechanisms for prospective

stakeholders, we use Anticipated pride like Jones and Felps (2013) did in their experiment

testing the effect of CSR on firms’ attractiveness to job seekers. We measured Anticipated pride

with the 3-item scale of Cable and Turban (2003) (αemp = 0.97 and αcust = 0.96). Finally, we

measured Needs-supplies fit with a single item that is close to the first item of the 3-item scale

from Cable and DeRue (2002) that we used in Study 1.

Control variables. In the tests of our hypotheses we controlled for demographics (gender, age,

nationality measured with a dummy taking a value 1 if the participant is European, and a dummy

that takes a value 1 for first-year students). Like in Study 1, we controlled for Moral identity

(αemp = 0.82 and αcust = 0.79) and Social desirability bias, captured with the same measures as in

31

Study 1. For participants who were asked to answer as prospective employees, we also controlled

for their Interest in working for a consumer goods company with a single item “I am interested in

working for a consumer goods company” rated on a 7-point agreement scale.

Assessment of measures and construction of the three pathways. As in Study 1, we used CFA,

first, to assess our measures and, second, to obtain latent variables for our observed variables that

account for the variance linked social desirability, and to build latent variables for the three

pathways. For the employee sample, after allowing a pair of the error terms to covary the fit of

the measurement model with 9 factors (Job pursuit intention, Competence, Fairness towards

employees, Character, Fairness towards communities, Value fit, Anticipated Pride, Moral

identity, and Social desirability bias) was good (CMIN/df=1.27, IFI=0.96, CFI=0.96, RMSEA=

0.04). Loading the items measuring the mediators on their corresponding pathway (Instrumental,

Socioemotional, or Deontic) and allowing a few error terms to covary for items related to the

same scale, we obtained a 6-factor model (Job pursuit intention, 3 pathways, Moral identity, and

Social desirability bias) with a good fit (CMIN/df= 1.63, IFI= 0.91, CFI=0.91, RMSEA=0.06).

For the customer sample, the measurement model with 9 factors had a good fit too allowing one

pair of error terms to covary (CMIN/df=1.41, IFI=0.94, CFI=0.94, RMSEA= 0.05). This was

also the case for the 6-factor model when allowing a few error terms to covary for items related

to the same scale (CMIN/df= 1.59, IFI= 0.91, CFI=0.91, RMSEA=0.06). For both samples, the

models with the three distinct pathways fitted the data significantly better than more

parsimonious models that merged two or all the three pathways.

Results

Table 8 shows the descriptives and correlations for the prospective employee sample, while

Table 9 contain this information for the prospective customer sample.

Insert Tables 8 & 9 about here

32

Like in Study 1, we used parallel multiple mediator models in order to test for the indirect

effects of our manipulation (coded as a dummy variable taking the value 1 for the stakeholder

orientation and a value 0 for the profit orientation) on stakeholders’ intention to join through the

instrumental, socioemotional and deontic pathways. We make inferences about mediation based

on the tests of unique indirect effects presented in Table 6 (Models 9 and 10). Coefficients for

the paths are illustrated in Figure 2 and presented in Table 7. The total effect of a stakeholder

orientation is significant and positive in both the employee and customer sample, providing

support for the key claim in stakeholder theory that a stakeholder orientation is more attractive to

stakeholders than a profit orientation. In relation to our hypothesized mediations, while for

customers the results support H1b, 2b, and 3b with significant positive indirect effects through

all three pathways for a stakeholder orientation compared to a profit orientation, in the employee

sample, we find again the surprising negative indirect effect through the deontic pathway on

employees’ job pursuit intention that Study 1 had revealed for turnover intention.

Insert Figure 2 about here

DISCUSSION

Our work contributes to stakeholder theory in three ways. Our first contribution is theoretical.

We propose both a new conceptualization of firms’ orientations towards stakeholders and of the

mechanisms through with a stakeholder orientation affects primary stakeholders’ behaviors.

These conceptualizations combine the precision and parsimony needed to test the recent work on

the microfoundations of stakeholder behavior. We hope that our conceptualization of firms’

orientations will also generate an awareness of the need for the field to think further about one of

its key constructs. We have already had insightful discussions around the concepts of

stakeholders (inter alia, Mitchell, Agle, & Wood, 1997; Phillips, 2003) and around the

appropriate dependent variable for instrumental stakeholder theory (inter alia, Garcia-Castro &

33

Aguilera, 2015; Harrison & Wicks, 2013; Jones & Felps, 2013). The theory would benefit from

similar exchanges around its dependent variable(s).

Our second contribution is methodological. We provide a scale to measure stakeholder and

profit orientations. Existing strategy research into the impact of stakeholder management on firm

performance (Choi & Wang, 2009; Hillman & Keim, 2001) has often relied on CSR ratings, such

as the one provided by MSCI (formerly KLD Research & Analytics, Inc.). While such ratings

have the advantage of being easily accessible to researchers, they are problematic in at least two

respects. First, stakeholder theorists have discussed at length the differences between a

stakeholder orientation and CSR (Phillips et al., 2003). Second, these ratings reflect the

assessment of outsiders based on information provided by firms and may diverge from primary

stakeholders’ perceptions, which are a more immediate predictor of stakeholder behavior.

Our third contribution is to offer empirical insights into the mechanisms underlying primary

stakeholders’ reactions to firms’ stakeholder management. Our results mostly support the central

claim of stakeholder theory about a positive effect of a stakeholder orientation on stakeholders’

behaviors. We found that a stakeholder orientation has the expected positive total effect on

employees’ and customers’ pro-organizational behavior and intention to join, and the expected

negative total effect on employees’ intention to leave, but we did not find the expected negative

total effect on customers’ intention to leave.

Our results also support the conceptualization of the mechanisms that drive stakeholder

behaviors in terms of three causal pathways. At the same time, the results for the unique indirect

effects of each of these paths are mixed and in part surprising. The theoretical literature has

identified more than a few potential mediators that should all increase pro-organizational

behavior and intention to join, and reduce intention to leave. Yet, when we test the effect of each

path while controlling for the other two, a more complex picture emerges. For example, the

34

unique effect of the instrumental path for employees’ pro-organizational behavior is negative,

and, even more surprising, the unique effect of the deontic path is negative for employees’

intention to join and positive for employees’ intention to leave. We believe that this shows the

need to examine moderation effects to identify boundary conditions for the claims of

instrumental stakeholder theory (cf. Jones et al. (2018)). Specifically, including the moderating

effect of personality differences in terms of self- vs. other-orientation (cf. Bridoux and Stoelhorst

(2014)) may reveal that the average negative unique effect of the instrumental path for

employees’ pro-organizational behavior hides a negative effect for self-regarding employees and

a positive effect for other-regarding employees. Similarly, stakeholders’ moral identity may

moderate the positive effect of the deontic path for employees’ intention to join and leave.

The differences in the total and unique indirect effects of a stakeholder orientation between

employees and customers in Study 1 suggest that the nature of the stakeholder-firm relationship

may matter in a way that we have not theorized. Given that customers scored significantly lower

on affective commitment and organizational identification (the variables included in the

socioemotional pathway) compared to employees and the fact that value fit did not load well on

the socioemotional dimension for customers, customers may perceive to be in a more

instrumental and less affective relationship with the firm than employees. In terms of a

difference proposed by Bosse and Coughlan (2016), customers may perceive more of an

instrumental bond – which exists when stakeholders believe that staying with the firm will

provide material outcomes – and employees more of a commitment bond – which reflects

dedication to and responsibility for the relationship. If so, then we should also expect different

pathways to dominate the effect of stakeholder orientation on stakeholder behaviors for different

stakeholder groups, calling into question the implicit assumption in the stakeholder theory

literature that all mechanisms apply equally to all stakeholder groups.

35

Our findings also support that a profit orientation may drive employees’ and customers’

intention to leave. In contrast, however, when we control for the firm’s stakeholder orientation,

we do not observe the negative effect of profit orientation on pro-organizational behavior that we

would have expected. This calls into question the implicit assumption in much of the literature

that because a stakeholder orientation positively affects stakeholders’ behavior, a profit

orientation would have a negative impact. Furthermore, our results suggest that the causal

pathways for profit orientation may be different than for stakeholder orientation, signaling a need

to think about how a firm’s profit orientation may impact primary stakeholders’ behaviors. If the

paths are different, this may also help identify potential drawbacks of a stakeholder orientation.

Despite the strengths of combining a survey and an experiment, we must acknowledge a

number of limitations. First, as it is often the case in studies of stakeholders’ reactions (Sen et al.,

2006), our dependent variables are self-reported behaviors and behavioral intentions rather than

actual behavior. While we parceled out the effect of social desirability bias in our models, there

is a gap between intentions and actual behaviors that our studies do not address, but that could be

addressed with longitudinal designs. Second, the customers in Study 1 were the respondents who

did not qualify as employees according to our criteria and were asked to report about their

relationship as a customer of a large U.S. firm. Most of them chose firms from which they had

been buying for a long time (more than 5 years for 86%). This all limits the generalizability of

the findings. Future research should include customers who started buying more recently, as the

three pathways could vary in importance over the lifetime of a customer-firm relationship. Third,

the relatively young age and homogeneity of the participants in Study 2 (BSc students in the field

of business administration) may limit the generalizability of our results for intention to join.

Particularly, younger job seekers and prospective customers may care more or less about a firm’s

orientation towards (other) stakeholders than older individuals. Finally, our research was limited

36

to employees and customers. Future research should include other primary stakeholders such as

investors and members of local communities.

Besides addressing these limitations, we see two other interesting avenues for future research.

First, while we chose to define a profit orientation as any approach to stakeholder management

where the treatment of stakeholders is an instrument at the service of economic performance,

future research could distinguish among different approaches within this broad category,

bringing back the distinction between an approach that benefits many (primary) stakeholders,

albeit it is driven by a profit motive, and an arms’ length approach where the relationships with

stakeholders are managed based on bargaining power and the mindset is usually a zero-sum

game ‒ where what benefits stakeholders is perceived as a loss for the firm. We believe that an

arms’ length approach has become less relevant for firms located in Western economics because

these firms are increasingly expected to be socially committed (Scherer & Palazzo, 2007). As a

result, we feel that social expectations have forced many (large) firms to at least pretend to care

about primary stakeholders in order to protect themselves from the negative reputational

consequences that an arms-length approach may bring about. In contrast, the arms’ length

approach may still be highly relevant in other geographical contexts.

Second, while we identified one stakeholder orientation, next to the profit orientation, some

authors have claimed that stakeholder theory should move beyond dichotomies because

individual stakeholders can frame their relationships with organizations in more than two ways.

Specifically, Bridoux and Stoelhorst (2016) describe three relational frames that stakeholders

could adopt in response to an organization’s moral orientation depending on the nature of the

social norms governing the stakeholder-organization relationship. We conceptualized our moral

orientations abstractly enough for it to apply regardless of the specific moral norms that the

stakeholders see as applying to the organization-stakeholder relationships. Stakeholders can use

37

either utilitarian/consequentialistic (results-based) or formalistic (rule- or principle-based)

criteria to assess a firm’s behavior and intentions (Treviño, Weaver, & Reynolds, 2006).

Furthermore, stakeholders could apply principles related to fairness/reciprocity (e.g. equity or

equality) as suggested by Harrison and Wicks (2013) and Bridoux and Stoelhorst (2014), but

they could also apply principles related to harm/care, ingroup/loyalty, authority/respect, or

purity/sanctity, which are other moral foundations discussed by Haidt (2007). While our concept

of stakeholder orientation is agnostic about these distinctions, future research could investigate

whether a more fine-grained understanding of the moral norms applied by stakeholders to assess

the firm’s behavior and intentions towards stakeholders leads to better explanations of their

reactions.

To conclude, our findings largely support the claim of instrumental stakeholder theory, that a

stakeholder orientation has a positive effect on primary stakeholders’ behaviors related to value

creation, as well as our conceptualization of the three paths that explain this effect. But they also

call into question some of the more specific ideas in the theoretical body of work on the

microfoundations of stakeholder behaviors. Clearly, more empirical work is needed to move this

stream of research forward, and we hope that our paper may serve as a trigger for this work.

38

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Table 1. Exploratory Factor AnalysisFactors and items F1 F2F1 Stakeholder orientation

This organization sticks to moral principles, even when there are financial incentives to break them. .91 -.40This organization tries to “do the right thing”, even when it costs money. .90 -.38This organization cares for all its stakeholders, including the ones that cannot affect much financial performance.

.92 -.39

This organization cares about the interests of all stakeholders (the ones without power as well as the powerful ones).

.91 -.36

This organization treats all its stakeholders in the best way possible. .91 -.37This organization shows a genuine concern for the interests of all its stakeholders. .91 -.36

F2 Profit orientationThis organization would violate ethical standards in order to make more money. -.36 .85This organization would act unethically toward stakeholders if that increases its financial performance. -.32 .86This organization only cares about those stakeholders that can influence financial performance. -.39 .84This organization only cares about the interests of powerful stakeholders (rather than caring for all stakeholders, powerful or not).

-.34 .86

This organization only acts morally toward stakeholders to make money. -.25 .78This organization is primarily concerned with making money. -.40 .65

Table 2. Test of Convergent and Discriminant Validity Evidence for the Orientations Towards StakeholdersStatistics and Shared Variance Estimates

Employees (N = 210) 1 2 3 4 M SD α CR AVE MSV MaxR(H)1. Stakeholder orientation ‒ 4.61 1.41 .95 .95 .76 .77 .952. Profit orientation -.61 ‒ 3.77 1.38 .87 .87 .54 .44 .893. Fairness .88 -.66 ‒ 4.95 1.64 .93 .94 .80 .78 .974. CSR .86 -.56 .88 ‒ 5.27 1.08 .93 .93 .47 .78 .95

Outside observers (N=179) 1 2 3 M SD α CR AVE MSV MaxR(H)1. Stakeholder orientation ‒ 4.43 1.63 .97 .97 .83 .97 .972. Profit orientation -.29 ‒ 4.60 1.46 .090 .090 .61 .92 .923. Fairness .88 -.43 ‒ 4.54 1.55 .87 .90 .71 .77 .96

Note: M= mean, SD= standard deviation, α= Cronbach’s alpha, CR= composite reliability, AVE = average variance extracted, MSV= maximum shared variance, ASV= average shared variance

Table 3. Test of Convergent and Discriminant Validity Evidence for the Orientations Towards StakeholdersConfirmatory Factor Analysis Results

χ2 (df) χ2 (df) CFI SRMR RMSEAEmployees (N=210)Proposed four-factor model 946.70 (449) ‒ .92 .06 .07Alternative three-factor model Merging stakeholder and profit orientations 1278.8 (454) 332.1** (5) .86 .08 .09 Merging stakeholder orientation and fairness 1263.1 (455) 316.4** (6) .86 .07 .09 Merging stakeholder orientation and CSR 1282.8 (455) 336.1** (6) .86 .07 .09Alternative one-factor model 1572.1 (456) 625.4** (7) .81 .09 .11

Outside observers (N=179)Proposed three-factor model 301.8 (101) ‒ .93 .10 .11Alternative two-factor model Merging stakeholder and profit orientations 433.2 (102) 131.4** (1) .89 .12 .14 Merging stakeholder orientation and fairness 796.7 (103) 494.9** (2) .77 .20 .20Alternative one-factor model 702.4 (102) 40.6** (1) .80 .20 .18

Note: CFI = comparative fit index; SRMR = square root mean residual; RMSEA = root mean square error of approximation; CSR = corporate social responsibility* p < .05 (two-tailed)** p < .01 (two-tailed)

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Table 4. Means, Standard Deviations and Correlations for Employees (Study 1)Variables M SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1. OCBa 4.65 1.602. Turnover Intentiona 2.44 1.82 -.61**

3. Stakeholder orientation 4.41 1.32 .72** -.58**

4. Profit orientation 1.87 1.17 -.53** .55** -.73**5. Instrumentala 3.64 1.26 .78** -.81** .79** -.67**6. Socioemotionala 4.92 1.58 .89** -.77** .80** -.63** .97**7. Deontica 4.30 1.11 .78** -.66** .81** -.71** .94** .91**8. Continuance commitmenta 2.08 .92 -.29** .34** -.38** .38** -.45** -.37** -.37**

9. Male .60 .49 -.03 -.01 -.01 .01 .00 -.02 -.05 -.12*1. Age 34.92 9.83 -.04 -.03 -.01 .01 -.06 -.06 -.07 .06 -.12*11. Edu Less than BSc .48 .50 -.18** .09 -.11 .03 -.12* -.14* -.10 .08 .03 .07

12. Tenure Less than 1 year .09 .29 -.05 .06 -.03 -.03 -.01 -.01 .00 .02 .00 -.18** .08

13. Tenure More than 10 years .14 .35 .04 -.08 .03 -.08 -.01 .02 -.03 .09 .02 .32** .03 -.13*

14. Less than 33 working hours .16 .37 -.18** .11 -.18** .09 -.09 -.10 -.05 .18** -.12 .14* .07 .24** -.09

15. Manager .40 .49 .31** -.21** .24** -.14* .25** .29** .19** -.13* -.08 .00 -.20** -.21** .16** -.23**16. IndCMM .01 .11 .03 -.09 -.04 .12 .04 .05 .00 .03 -.13* -.09 -.03 -.03 -.04 -.05 -.0117. IndCI .07 .26 -.09 .00 -.09 .09 -.09 -.08 -.15* .09 .11 .03 .09 -.04 .06 -.12* .10 -.0318. IndCMT .18 .39 .12* -.11 .15* -.05 .18** .17** .15* -.09 .05 -.02 -.12* .01 .01 -.02 .11 -.05 -.13*19. IndFBS .15 .36 .17** -.08 .18** -.10 .11 .12 .17* -.15* .00 .01 -.13* -.10 .04 -.04 -.04 -.04 -.12 -.20**2. IndFSH .07 .26 -.134 .16** -.15* .12* -.20** -.19** -.18** .06 .00 -.07 .13* .06 -.03 .07 -.06 -.03 -.08 -.14* -.1221. IndRT .13 .34 -.22** .13* -.13* .07 -.12* -.16** -.09 .05 .03 .05 .20** -.01 -.06 .04 -.17** -.04 -.11 -.19** -.17** -.1122. IndTR .01 .12 -.12* .17** -.122* .13* -.14* -.14* -.11 .09 .04 .04 -.06 -.04 -.05 .03 -.10 -.01 -.03 -.06 -.05 -.04 -.0523. Firm with Less than 50 employees .29 .46 .06 .01 .02 -.10 .01 .04 .00 .05 .09 -.06 -.03 .05 .05 .03 .10 -.07 .21** -.03 .01 .00 -.11 -.01

24. Moral identitya 5.15 .96 .41** -.29** .33** -.24** .24** .32** .25** -.09 -.08 .04 .02 .01 .02 -.08 .03 .03 -.04 .08 .04 .04 -.04 -.21** -.0825. Social desirability biasa .47 .23 .33** -.17** .33** -.24** .30** .28** .29** -.25** .05 -.05 .04 -.01 -.05 -.04 .06 -.01 .03 .04 .07 -.04 -.04 -.07 -.04 .27**

26. Mediators First .49 .50 .02 -.04 .00 -.03 .06 .05 .06 .10 .01 -.10 -.05 .07 -.03 .00 -.04 .04 -.04 .08 .03 .01 -.06 -.12* .01 -.04 .02

Note. N= 267; variables 14 to 20 are control variables for the main industry the firm is active in: IndCMM = Chemicals, metals and mining, IndCI = Construction industry; IndCMT = Communication, media and technology, IndFBS = Financial and business services, IndFSH = Food service and hospitality, IndRT = Retail trade, IndTR = Teaching and researcha this variable is a latent variable computed by applying the factor score weights*p =.05 (two-tailed)**p = .01 (two-tailed)

46

Table 5. Means, Standard Deviations and Correlations for Customers (Study 1)

Variables M SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 241. WOMa 3.85 1.502. Exit intentiona 1.40 .69 -.34**3. Stakeholder orientation 3.80 1.34 .64** -.43**

4. Profit orientation 2.67 1.31 -.43** .61** -.71**5. Instrumentala 5.41 1.18 .53** -.45** .67** -.57**6. Socioemotionala 3.29 1.18 .81** -.31** .72** -.43** .46**7. Deontica 4.81 1.50 .69** -.52** .86** -.76** .79** .66**8 Continuance commitmenta 2.29 1.25 -.04 .13 -.28** .38** -.36** .13 -.25**

9. Male .48 .50 -.11 .06 -.11 .11 .07 -.08 -.15 .001. Age 37.19 12.17 -.06 .03 -.05 .02 -.02 -.09 -.04 .00 -.1211. Edu Less than BSc .56 .50 -.09 .10 -.11 .04 -.05 -.07 -.06 .00 .04 .0212. Buying frequency 4.68 1.22 .11 -.24** .10 -.10 .16* .10 .14 .15* -.20** .10 .0013. Buying for less than 5 years .14 .35 .24** .01 .21** -.09 -.02 .28** .14 .12 -.09 -.20** -.152* -.10

14. Buying for more than 15 years .40 .49 -.20** .07 -.27** .24** -.07 -.29** -.21** .00 .10 .22** .08 .08 -.33**

15. Apple .15 .36 .23** -.22** .21** -.14 .10 .25** .16* .00 .05 -.11 -.18* .03 .11 -.179*16. Costco .08 .27 .21** -.26** .29** -.30** .17* .19* .23** -.11 -.12 .01 -.17* .16* .25** -.16* -.1217. McDonald’s .13 .34 -.08 .09 -.11 .17* -.03 -.15* -.05 -.20** .06 -.11 .04 -.21** -.11 .30** -.16* -.1218. Microsoft .07 .25 .12 -.08 .11 -.06 .09 .19* .14 .03 .01 -.04 .10 -.08 .02 .05 -.11 -.08 -.1119. Starbucks .06 .23 -.02 .03 .13 -.16* .10 -.02 .13 -.16* -.14 -.13 .07 -.04 -.10 -.15* -.10 -.07 -.10 -.072. United Airlines .01 .08 -.05 .07 -.07 .01 -.15* -.04 -.07 .14 .08 .02 .07 -.04 -.03 .09 -.03 -.02 -.03 -.02 -.0221. Walmart -.29** .20** -.31** -.26** -.41** .34** -.39** .38** .0 .16* .1 .15* -.18* .19* -.30** -.21** -.28** -.19* -.18* -.1 1.0 -.122. Amazon .03 .18 .03 .02 -.03 -.02 .11 .01 -.04 -.03 .07 .21** .10 .08 .02 -.09 -.08 -.06 -.07 -.05 -.05 -.01 -.1323. Moral identitya 5.83 1.20 .12 .02 .05 -.17* .15* .06 .18* -.14 -.11 .03 .02 .12 -.16* .11 .05 .00 .05 -.13 .05 .01 .02 .1224. Social desirability biasa .63 .23 .29** -.24** .33** -.31** .17* .41** .34** -.02 -.15 -.03 .05 .04 .06 -.12 .08 .04 -.15 .12 .00 -.10 -.07 -.03 -.07

25. Mediators First .50 .50 -.19* -.06 .05 -.06 .06 -.04 -.01 -.08 .05 .01 .00 .04 -.07 .14 -.03 .04 .08 .09 -.15 .08 -.07 .00 -.07 -.06

Note. N= 174a this variable is a latent variable computed by applying the factor score weights* p < .05 (two-tailed)**p < .01 (two-tailed)

47

Table 6. Path Coefficient from Tests of Multiple Mediator Models (Studies 1 and 2)

Study 1 Employees (N=267), BC BC 95% CI Study 1 Employees (N=267), BC 95% CIEstimate SE Lower Upper Estimate SE Lower Upper

Total and indirect effects Model 1. IV: Stakeholder orientation – DV: OCB Model 2. IV: Stakeholder orientation – DV: Turnover intention

Total effect of stakeholder orientation

.67 .08 .51 .82 -.41 .11 -.62 -.20

Total indirect effect of stakeholder orientation

.61 .09 .43 .79 -.53 .12 -.78 -.31

Unique indirect effects through:1. Instrumental pathway -1.10 .16 -1.41 -.80 -1.60 .23 -2.07 -1.182. Socioemotional pathway 1.46 .20 1.08 1.86 .32 .14 .06 .603. Deontic pathway .25 .06 .13 .36 .74 .13 .51 1.01

Study 1 Employees (N=267), BC 95% CI Study 1 Employees (N=267), BC 95% CIEstimate SE Lower Upper Estimate SE Lower Upper

Total and indirect effects Model 3. IV: Profit orientation - OCB Model 4. IV: Profit orientation – DV: Turnover intention

Total effect of profit orientation -.02 .08 -.19 .15 .42 .12 .19 .64Total indirect effect of profit orientation

-.07 .09 -.25 .11 .16 .10 -.03 .35

Unique indirect effects through:1. Instrumental pathway .39 .14 .12 .66 .57 .21 .17 .982. Socioemotional pathway -.36 .19 -.73 .02 -.08 .06 -.21 .013. Deontic pathway -.11 .04 -.18 -.04 -.33 .09 -.51 -.16

Study 1 Customers (N=174), BC 95% CI Study 1 Customers (N=174), BC 95% CIEstimate SE Lower Upper Estimate SE Lower Upper

Total and indirect effects Model 5. IV: Stakeholder orientation – DV: WOM Model 6. IV: Stakeholder orientation – DV: Exit intention

Total effect of stakeholder orientation

.69 .10 .49 .88 .05 .05 -.04 .14

Total indirect effect of stakeholder orientation

.99 .11 .76 1.19 -.09 .07 -.22 .04

Unique indirect effects through:1. Instrumental pathway .03 .05 -.08 .14 -.05 .04 -.14 .012. Socioemotional pathway .67 .09 .49 .83 .01 .05 -.08 .113. Deontic pathway .29 .09 .10 .47 -.05 .06 -.18 .07

Study 1 Customers (N=174), BC 95% CI Study 1 Customers (N=174), BC 95% CIEstimate SE Lower Upper Estimate SE Lower Upper

Total and indirect effects Model 7. IV: Profit orientation – DV: WOM Model 8. IV: Profit orientation – DV: Exit intention

Total effect of profit orientation -.003 .10 -.20 .19 .37 .05 .28 .46Total indirect effect of profit orientation

-.10 .10 -.31 .09 .04 .03 -.02 .11

Unique indirect effects through:1. Instrumental pathway -.01 .01 -.04 .02 .01 .01 -.01 .042. Socioemotional pathway .06 .08 -.09 .21 0 .01 -.01 .023. Deontic pathway -.15 .06 -.29 -.05 .03 .03 -.04 .10

Study 2 Employees (N=189), BC 95% CI Study 2 Customers (N=187), BC 95% CIEstimate SE Lower Upper Estimate SE Lower Upper

Total and indirect effects Model 9. IV: Stakeholder vs. Profit orientation – DV: Job pursuit intention

Model 1. IV: Stakeholder vs. Profit orientation – DV: Purchase intention

Total effect of stakeholder vs. profit orientation

.94 .13 .68 1.20 1.34 .11 1.12 1.55

Total indirect effect of stakeholder vs. profit orientation

1.05 .19 .69 1.44 1.30 .12 1.08 1.54

Unique indirect effects through:1. Instrumental pathway .30 .08 .16 .46 .24 .5 .15 .362. Socioemotional pathway 1.85 .26 1.36 2.40 .52 .10 .34 .733. Deontic pathway -1.11 .30 -1.73 -.54 .54 .12 .30 .79

Note: BC 95% refers to a bias-corrected 95% confidence interval; Estimate refers to the effect estimate using 10,000 bootstrap samples; Estimates with CIs that do not include zero are statistically significant and bolded; the control variables are the ones included in the correlation tables and include the other orientation.

48

Table 7. Path Coefficients from Tests of Multiple Mediator Models (Studies 1 and 2)

Study 1 Employees (N=267) Study 1 Customers (N=174)Study 2 Employees (N= 189)

Study 2 Customers (N= 187)

Path as represented in Figure 1 OCB Turnover intention WOM Exit intention Job pursuit

intentionPurchase intention

1. Stakeholder orientation Instrumental pathway

.55*** (.06) .55*** (.06) .53*** (.07) .53*** (.07)

2. Stakeholder orientation Socioemotional pathway

.72*** (.07) .72*** (.07) .68*** (.06) .68*** (.06)

3. Stakeholder orientation Deontic pathway

.52*** (.05) .52*** (.05) .72*** (.06) .72*** (.06)

4. Profit orientation Instrumental pathway

-.20*** (.06) -.20*** (.06) -.12 (.07) -.12 (.07)

5. Profit orientation Socioemotional pathway

-.18* (.08) -.18* (.08) .06 (.06) .06 (.06)

6. Profit orientation Deontic pathway

-.23*** (.05) -.23*** (.05) -.39*** (.06) -.39*** (.06)

7. Stakeholder orientation DV .06 (.04) .12 (.08) -.29** (.11) .14* (.07)8. Profit orientation DV .05 (.04) .25** (.08) .09 (.08) .34*** (.05)9. Stakeholder vs. profit orientation DV

-.11 (.16) .03 (.10)

1. Instrumental pathway DV -1.99*** (.13) -2.88*** (.25) .06 (.10) -.09 (.07) .28*** (.07) .27*** (.04)11. Socioemotional pathway DV 2.03*** (.09) .44** (.17) .98*** (.09) .01 (.06) .86*** (.09) .34*** (.04)12. Deontic pathway DV .48*** (.09) 1.44*** (.17) .40** (.12) -.07 (.08) -.52*** (.12) .26*** (.05)13. Stakeholder vs. profit orientation Instrumental pathway

1.07*** (.05) .90*** (.14)

14. Stakeholder vs. profit orientation Socioemotional pathway

2.15*** (.14) 1.53*** (.13)

15. Stakeholder vs. profit orientation Deontic pathway

2.15*** (.12) 2.10*** (.12)

Model R2 .92*** .78*** .77*** .54*** .71*** .83***Note: The control variables are the ones mentioned in the correlation tables; standard errors are reported in brackets*p < .05, **p < .01, ***p < .001

Table 8. Means, Standard Deviations and Correlations for Prospective Employees (Study 2)Variables M SD 1 2 3 4 5 6 7 8 9 10 11

1. Job Pursuit Intentiona 4.39 1.132. Stakeholder vs. profit orientation .49 .50 .47*3. Instrumentala 4.74 1.10 .62** .52**4. Socioemotionala 4.54 1.52 .78** .74** .69**5. Deontica 4.31 1.39 .67** .80** .76** .93**6. Interest in working for a consumer good company 5.00 1.35 .50** .18* .35** .39** .33**

7. Male .44 .50 .04 -.05 -.02 .02 .03 .008. Age .76 .43 -.03 -.02 .06 .00 -.01 -.06 .129. European 2.46 2.05 .10 -.03 .04 .08 .02 .00 .15* -.061. 1st year BSc .22 .42 .10 .03 .12 .11 .10 .22** -.09 -.12 -.1111. Moral identitya 5.02 .73 .08 -.16* .07 .00 -.04 .15* -.10 .04 .07 .15*12. Social desirability biasa .24 .09 .07 .01 -.05 .12 .05 .10 .00 -.09 .00 .05 .23**

Note. N= 189; a this variable is a latent variable computed by applying the factor score weights* p < .05 (two-tailed), **p < .01 (two-tailed)

Table 9. Means, Standard Deviations and Correlations for Prospective Customers (Study 2)Variables M SD 1 2 3 4 5 6 7 8 9 10

1. Purchase Intentiona 3.73 1.012. Stakeholder vs. profit orientation .49 .51 .65**3. Instrumentala 4.99 1.06 .71** .42**4. Socioemotionala 2.91 1.18 .82** .64** .54**5. Deontica 3.92 1.36 .83** .78** .62** .78**6. Male .46 .50 -.01 -.01 .06 -.03 .007. Age .84 .37 .06 .08 .00 .00 .05 -.018. European 2.22 1.87 -.03 -.08 -.05 -.07 -.09 .19** -.109. 1st year BSc .29 .46 .06 .00 .02 .13 .12 -.01 -.17* -.18*1. Moral identitya 5.16 .81 .16* -.06 .24** .13 .03 -.18* -.10 .05 .03

1. Social desirability biasa .12 .05 .10 .11 .18* .12 .19** -.12 .05 -.05 .08 .31**

Note. N= 187; a this variable is a latent variable computed by applying the factor score weights* p < .05 (two-tailed), **p < .01 (two-tailed)

49

Figure 1. A Multiple Mediator Model of the Effects of Stakeholder and Profit Orientation on Stakeholders’ Pro-organizational Behavior and Intention to Leave

Note: The results from the tests of indirect effects are reported in Table 6 and the path coefficients in Table 7

Figure 2. A Multiple Mediator Model of the Effects of Stakeholder vs. Profit Orientation on Stakeholders’ Intention to Join

Note: The results from the tests of indirect effects are reported in Table 6 and the path coefficients in Table 7

Instrumental pathway

Socioemotional pathway

Deontic pathway

OCB (employees)Turnover intention (employees)WOM (customers)Exit intention (customers)

Stakeholder orientation

Profit orientation

8

7

10

11

12

1

2

3

6

5

4

Instrumental pathway

Socioemotional pathway

Deontic pathway

Job pursuit intention (employees)Purchase intention (customers)

Stakeholder vs. profit orientation

10

12

9

15

13

1114

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APPENDIX A. Scales used in the Pretest and in Studies 1 and 2

Variable Study Itemsa Answer scale SourceDependent variables: Stakeholders’ responsesOrganizational citizenship behavior (employees)

1 As an employee of the organization you currently work for, how often do you engage in the following behaviors? 1 – Never2 – Rarely, in less than 10% of the chances when it could have3 – Occasionally, in about 30% of the chances when it could have4 – Sometimes, in about 50% of the chances when it could have5 – Frequently, in about 70% of the chances when it could have6 – Usually, in about 90% of the chances when it could have.7 – Always

I attend functions that are not required but that help the image of my organization.

I keep up with developments in my organization.I defend my organization when other employees criticize it.I show pride when representing my organization in public.I offer ideas to improve the functioning of my organization.I express loyalty toward my organization.I take action to protect my organization from potential problems.I demonstrate concern about the image of my organization.

1 = never; 7 = always

Lee & Allen (2002)

Turnover intention (employees)

1 I intend to leave this organization soon.I plan to leave this organization in the next little while.I will quit this organization as soon as possible.

1= strongly disagree; 7= strongly agree

Crossley, Bennett, Jex, & Burnfield (2007)

Positive word-of-mouth (customers)

1 As a customer of the organization, how often do you engage in the following behaviors? 1 – Never2 – Rarely, in less than 10% of the chances when it could have3 – Occasionally, in about 30% of the chances when it could have4 – Sometimes, in about 50% of the chances when it could have5 – Frequently, in about 70% of the chances when it could have6 – Usually, in about 90% of the chances when it could have.7 – Always

Mention to others that you do business with this organizationMake sure that others know that you buy from this organizationSpeak positively about this organization to othersRecommend this organization to others

1 = never; 7 = always

Brown, Barry, Dacin, & Gunst (2005)

Switching intention (customers)

1 I am not likely to continue the business relationship with this organization. I will probably consider buying from another organization in the near future. I am looking at other organizations I could buy from. I will probably stop buying from this organization in the near future.

1= strongly disagree; 7= strongly agree

Ping (1995)

Job pursuit intention (employees)

2 I would put in a great deal of effort to work for ABC. I would be interested in pursuing a job application with ABC. I am likely to send my resume (CV) to ABC. I am likely to accept a job offer from ABC.

1= strongly disagree; 7= strongly agree

Greening & Turban (2000)

Purchase intention (customers)

2 I would be willing to buy a product from ABC. I would put in a great deal of effort to purchase from ABC.) I would likely make ABC one of my first choices in consumer goods electronics. I would be likely to purchase a product from ABC.

1= strongly disagree; 7= strongly agree

White, MacDonnell, & Ellard (2012)

Independent variables: Stakeholder and profit orientationStakeholder and profit orientation

1 Please rate the following statements using the scale:1 – Never2 – Rarely, in less than 10% of the chances when it could have3 – Occasionally, in about 30% of the chances when it could have4 – Sometimes, in about 50% of the chances when it could have5 – Frequently, in about 70% of the chances when it could have6 – Usually, in about 90% of the chances when it could have7 – Always

[Stakeholder orientation:]This organization sticks to moral principles, even when there are financial

incentives to break them.This organization tries to “do the right thing”, even when it costs money.This organization cares for all its stakeholders, including the ones that

1 = never; 7 = always

51

cannot affect much financial performance.This organization cares about the interests of all stakeholders (the ones

without power as well as the powerful ones).This organization treats all its stakeholders in the best way possible.This organization shows a genuine concern for the interests of all its

stakeholders.

[Profit orientation:]This organization would violate ethical standards in order to make more

money.This organization would act unethically toward stakeholders if that increases

its financial performance.This organization only cares about those stakeholders that can influence

financial performance.This organization only cares about the interests of powerful stakeholders

(rather than caring for all stakeholders, powerful or not).This organization only acts morally toward stakeholders to make money.This organization is only concerned with making money.

MediatorsCompetence 1 & 2 Very

undependable (unreliable)

o o o o o o o Very dependable (reliable)

Very incompetent o o o o o o o Very competent

Very inefficient o o o o o o o Very efficient

Very unskilled o o o o o o o Very skilled

Very incapable o o o o o o o Very capable

-3 to +3 Sirdeshmukh, Singh, & Sabol (2002); Aaker, Vohs, & Mogilner, (2010)

Character 1 & 2 Of very low integrity

o o o o o o o Of very high integrity

Very dishonest and untrustworthy o o o o o o o Very honest

and trustworthy

Very ungenerous o o o o o o o Very generous

Very cold o o o o o o o Very warm

Very unkind o o o o o o o Very kind

-3 to +3 Sirdeshmukh, Singh, & Sabol (2002); Aaker, Vohs, & Mogilner, (2010)

Fairness towards employees (employees)

1 Please rate the following statements related to how the organization you work for treats its employees.This organization is fair towards employees. This organization treats employees well. This organization treats employees with respect and dignity.

1= strongly disagree; 7= strongly agree

Ambrose & Schminke (2009)

Fairness towards employees (employees)

2 ABC is probably fair towards customers. ABC probably treats customers well. ABC probably treats customers with respect and dignity.

1= strongly disagree; 7= strongly agree

Ambrose & Schminke (2009)

Fairness towards customers (customers)

1 Please rate the following statements related to how the organization you buy from treats its customers.This organization is fair towards customers. This organization treats customers well. This organization treats customers with respect and dignity.

1= strongly disagree; 7= strongly agree

Ambrose & Schminke (2009)

Fairness towards customers (customers)

2 ABC is probably fair towards employees. ABC probably treats employees well. ABC probably treats employees with respect and dignity.

1= strongly disagree; 7= strongly agree

Ambrose & Schminke (2009)

52

Fairness towards communities

1 & 2 Please rate the following statements related to how the organization you buy from treats local communities.This organization is probably fair towards local communities. This organization probably treats local communities well. This organization probably treats local communities with respect and

dignity.

1= strongly disagree; 7= strongly agree

Ambrose &Schminke (2009)

Affective commitment

1 I enjoy being a customer of this organization. I have positive feelings about this organization. I feel emotionally attached to this organization. This organization has a great deal of personal meaning for me.

1= strongly disagree; 7= strongly agree

Mende, Bolton, & Bitner (2013); Meyer, Allen, & Smith (1993)

Organizational identification

1 This organization’s successes are my successes. When I talk about this organization, I usually say ‘we’ rather than ‘they’. I am very interested in what others think about this organization. When someone praises this organization it feels like a personal compliment.

1= strongly disagree; 7= strongly agree

Mael & Ashforth (1992).

Anticipated pride (employees)

2 I would feel proud to be an employee of ABC. I would be proud to tell others that I work for ABC. I would be proud to identify myself personally with ABC.

1= strongly disagree; 7= strongly agree

Cable & Turban (2003)

Anticipated pride (customers)

2 I would feel proud to be a customer of ABC. I would be proud to tell others that I buy from ABC. I would be proud to identify myself personally with ABC.

1= strongly disagree; 7= strongly agree

Cable & Turban (2003)

Value fit 1 & 2 The things that I value in life are very similar to the things that the organization values.

My personal values match the organization’s values and culture. The organization’s values and culture are a good fit with the things that I

value in life.

1= strongly disagree; 7= strongly agree

Cable & DeRue (2002)

Needs-supply fit (employees)

1 There is a good fit between what my job offers me and what I am looking for in a job.

The attributes that I look for in a job are fulfilled very well by my present job.

The job that I currently hold gives me just about everything that I want from a job.

1= strongly disagree; 7= strongly agree

Cable & DeRue (2002)

Needs-supply fit (customers)

1 There is a good fit between what the product/service the organization offers me and what I am looking for in a such a product/service.

The attributes that I look for in a product/service are fulfilled very well by what this organization sells.

The product/service that I buy from this organization gives me just about everything that I want from such a product/service.

1= strongly disagree; 7= strongly agree

Cable & DeRue (2002)

Needs-supply fit

2 There is a good fit between what ABC can offer me and what I would be looking for.

1= strongly disagree; 7= strongly agree

Moderators: Individual differencesMoral identity- internalization

1 & 2 Listed below are some characteristics that may describe a person caring, compassionate, fair, friendly, generous, helpful, hardworking, honest, and kindThe person with these characteristics could be you or it could be someone else. For a moment, visualize in your mind the kind of person who has these characteristics. Imagine how that person would think, feel, and act. When you have a clear image of what this person would be like, answer the following questions.

It would make me feel good to be a person who has these characteristics.Being someone who has these characteristics is an important part of who I

am.I would be ashamed to be a person who has these characteristics. (R)Having these characteristics is not really important to me. (R)I strongly desire to have these characteristics.

1= strongly disagree; 7= strongly agree

Aquino and Reed (2002)

Social value orientations

1 & 2 In this task, imagine that you have been randomly paired with another person, whom we will refer to as the other. This other person is someone you do not know and will remain mutually anonymous. All of your choices would be completely confidential.

You will be making a series of 6 decisions about allocating resources between you and this other person. For each of the following questions, please indicate the distribution you prefer most by selecting the button below the payoff allocations. You can only make one selection for each

Murphy, Ackermann, and Handgraaf (2011)

53

question. Imagine that your decisions will yield money for both yourself and the other person. In the example below, a person has chosen to distribute the payoff so that he/she receives $50, while the anonymous other person receives $4.

Control variablesContinuance commitment (employees)

1 Right now, staying with this organization is a matter of necessity as much as desire.

It would be very hard for me to leave this organization right now, even if I wanted to.

I feel that I have too few options to consider leaving this organization. One of the few negative consequences of leaving this organization would be

the scarcity of available alternatives.

1= strongly disagree; 7= strongly agree

Meyer, Allen, & Smith (1993)

Continuance commitment (customers)

1 Right now, buying from this organization is a matter of necessity as much as desire.

It would be very hard for me to buy from another organization right now, even if I wanted to.

I feel that I have too few options to consider buying from another organization.

One of the few negative consequences of not buying from this organization would be the scarcity of available alternatives.

1= strongly disagree; 7= strongly agree

Meyer, Allen, & Smith (1993)

Buying frequency (customers)

1 How often do you buy from the organization you have chosen?o Nevero Rarely, in less than 10% of the chances that I could haveo Occasionally, in about 30% of the chances that I could haveo Sometimes, in about 50% of the chances that I could haveo Frequently, in about 70% of the chances that I could haveo Usually, in about 90% of the chances that I could haveo Always

Scales used in the pre-test of the scale for stakeholder and profit orientationsStakeholder and profit orientation

Pre-test

Please rate the following statements using the scale:1 – Never2 – Rarely, in less than 10% of the chances when it could have3 – Occasionally, in about 30% of the chances when it could have4 – Sometimes, in about 50% of the chances when it could have5 – Frequently, in about 70% of the chances when it could have6 – Usually, in about 90% of the chances when it could have7 – Always

[Stakeholder orientation:]This organization sticks to moral principles, even when there are financial

incentives to break them.This organization tries to “do the right thing”, even when it costs money.This organization cares for all its stakeholders, including the ones that

cannot affect much financial performance.This organization cares about the interests of all stakeholders (the ones

without power as well as the powerful ones).This organization treats all its stakeholders in the best way possible.This organization shows a genuine concern for the interests of all its

stakeholders.

[Profit orientation:]This organization would violate ethical standards in order to make more

money.This organization would act unethically toward stakeholders if that increases

its financial performance.This organization only cares about those stakeholders that can influence

financial performance.This organization only cares about the interests of powerful stakeholders

(rather than caring for all stakeholders, powerful or not).This organization only acts morally toward stakeholders to make money.This organization is primarily concerned with making money.

1 = never; 7 = always

Forced-choice version of stakeholder vs.

Pre-test

For each of the following issues please choose the response option that most closely describes the way in which the organization manages relationships with its stakeholders.

54

profit orientation In managing stakeholder relationships this organization […]

o Always tries to “do the right thing”, even when it costs money. o Follows moral principles when it is economically advantageous to do so.

In managing stakeholder relationships this organization […]o Always shows a genuine concern for all its stakeholders. o Only considers stakeholder interests if it can affect profit.

In managing stakeholder relationships this organization […]o Cares for all its stakeholders, including the ones who cannot affect much

financial performance. o Cares for the stakeholders that can affect financial performance.

In managing stakeholder relationships this organization […]o Is primarily driven by moral principles. o Is primarily driven by financial performance.

In managing stakeholder relationships this organization […]o Sticks to moral principles, even when there are financial incentives to

break them. o Acts morally toward stakeholders in order to make money.

Corporate social responsibility

Pre-test

Please indicate your agreement with the following statements about the organization:

[Community-oriented CSR]This organization contributes to improving the well-being of populations in

the areas where it operates by providing help for schools, sporting events, etc.

This organization gives financial assistance to the poor and deprived in the areas where it operates.

This organization assists populations and local residents in case of natural disasters and/or accidents.

[Employee-oriented CSR]This organization implements policies that improve the well-being of its

employees at work.This organization promotes the safety and health of its employees. This organization avoids all forms of discrimination (age, sex, handicap,

ethnic or religious origin) in its recruitment and promotion policies.This organization supports equal opportunities at work (e.g., gender equality

policies). [Customer-oriented CSR]This organization checks the quality of goods and/or services provided to

customers. This organization is helpful to customers and advises them about its

products and/or services.This organization respects its commitments to customers. This organization invests in innovations which are to the advantage of

customers. This organization ensures that its products and/or services are accessible for

all its customers. [Shareholder-oriented CSR]This organization respects the financial interests of all its shareholders. This organization ensures that communication with shareholders is

transparent and accurate. This organization takes action to ensure that shareholders’ investments are

profitable and perennial in the long-term. This organization makes sure that shareholders exert effective influence

over strategic decisions.

1=never to 7=always and 8=“I do not know”

El Akremi, Gond, Swaen, De Roeck, and Igalens (2018)

Fairness Pre-test

Please rate the following statements:

Overall, I believe that this organization is a fair organization.I do not believe that this organization is a fair organization. (R)In general, I believe this organization is just.On the whole, this organization is a fair organization.

1= strongly disagree; 7= strongly agree

Ambrose and Schminke (2009)

a (R) reverse-coded items, [] this was not shown to the respondents

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APPENDIX B. Vignettes Used in Study 2

[All participants read the following text]

Please read carefully the following information about Company ABC. The actual name of the company has been disguised for confidentiality reasons.

Company ABC is a manufacturer of consumer electronics, such as television sets, DVD players, and digital cameras. ABC’s products are generally seen as innovative, high-quality products that are reasonably priced. Business is going well. Company ABC is growing in terms of revenues and employees.

Here is a short summary of a report by a highly respected rating agency on the way Company ABC treats its stakeholders (i.e. employees, customers, suppliers, local communities, and shareholders).

[Participants assigned to the stakeholder orientation read the following text]

The rating agency reports that Company ABC has a genuine concern for the interests of its stakeholders. As a result, ABC cares for all its stakeholders, including the ones that cannot directly affect its financial performance. For example, ABC supports local communities through donations to schools, even in areas where people are generally too poor to buy its products.

In addition, the rating agency found that ABC is known to stick to moral principles, even when financial incentives suggest deviating from them. For example, in 2015 ABC considered paying higher prices for some supplies coming from developing countries in order to help fight child labor. In the end, ABC decided in favor of paying higher prices because it was the right thing to do.

Overall, the assessment of the rating agency is that ABC treats its stakeholders well out of a moral concern.

[Participants assigned to the profit orientation read the following text]

The rating agency reports that Company ABC has a strong focus on making money. As a result, ABC is only interested in stakeholders that can directly affect its financial performance. For example, ABC supports local communities through donations to schools, but only in areas where people are rich enough to buy its products.

In addition, the rating agency found that ABC is known to stick to its profit objective, even when moral principles suggest deviating from this objective. For example, in 2015 ABC considered paying higher prices for some supplies coming from developing countries in order to help fight child labor. In the end, ABC decided against paying higher prices because it saved money.

Overall, the assessment of the rating agency is that ABC treats its stakeholders well when it helps to make money.

[Participants assigned to the prospective employee role read the following text before rating their willingness-to-apply]

Imagine that you are looking for a job. ABC has job openings in your area of expertise. The job seems interesting and the salary is good for such a job.

[Participants assigned to the prospective customer role read the following text before rating their willingness-to-buy]

Imagine that you are considering buying a consumer electronics product. ABC offers a good product at a good price.