Stakeholder orientation and its impact on performance in small businesses

Abstract

Scope and Method of Study: The purpose of this study was to examine how stakeholder orientation (SO) impacts the performance of small businesses. Environmental dynamism and munificence were also reviewed specifically looking at organizational context from the perspective of small businesses and stakeholder orientation. Theory of the firm, resource dependency, and stakeholder theory were the theoretical underpinnings for each of the constructs to develop testable hypotheses. The hypotheses were tested using multiple, moderated, and step-wise regression analysis.

Findings and Conclusions: Environmental dynamism was supported as a moderator of three dimensions of stakeholder orientation. No support was found for the direct effect of stakeholder orientation with performance or for the moderation effect of environmental munificence. Customers and employees emerged as significant in a post hoc effort to find a pattern of stakeholder orientation with the strongest relationship to performance. This study extended the generalizability of the stakeholder orientation scale, provided information to small business owners on the effectiveness of resources afforded to various stakeholders, and contributed to the small business literature.