Examining stakeholder management under conditions of uncertainty : performance implications for entrepreneurial firms.

Abstract

Stakeholder groups (i.e., employees, customers, investors, local communities, and the environment at large) are key ingredients in the success of firms. Stakeholders can be affected by firm decisions and have a powerful, central role in the financial performance of corporations. However, when firms are in their early stages, attention to multiple stakeholder groups can harm the value of the entrepreneurial firm. Throughout my three-paper dissertation, I examine the role of stakeholder management and its implications for entrepreneurial firms. The paper #1 with data on US firms that underwent initial public offerings (IPOs) (N = 3,840 firm-year observations), I found that entrepreneurial firms investing in employees and customers stakeholders achieve higher performance, but not when invest in other stakeholders (investors, communities, and environment). In paper #2 with data on 349 founders who maintained the CEO position, I found that ideological liberal founders tend to invest more in all stakeholder groups, as opposed to ideological conservative founders—despite the recent financial performance of the firm. In paper #3 with data on 652 startups, I found that the stakeholder orientation of the firm is associated with higher investor funding. In sum, this dissertation explain links between stakeholder theory and entrepreneurship, and discusses key implications and applications.