Stakeholder Orientation, Managerial Discretion and Nexus Rents

STAKEHOLDER THEORY, MANAGERIAL DISCRETION AND NEXUS RENTS, R. Phillips, ed., Edward Elgar Publishers, Northampton, 2010

Posted: 19 Nov 2010

See all articles by Robert A. Phillips

Robert A. Phillips

York University - Schulich School of Business

Shawn L. Berman

Santa Clara University

Heather Elms

American University - Kogod School of Business

Michael E. Johnson-Cramer

Bucknell University - Department of Management

Date Written: November 17, 2010

Abstract

Building on prior research (Phillips et al. 2010), we make explicit the implied assumptions – both managerialist and determinist – in stakeholder research. We argue that three elements – managerial discretion, stakeholder orientation and nexus rent – interact in important and under-examined ways. A firm’s orientation toward its stakeholders determines how it will use the discretion accorded to it by external and internal circumstances. The interaction between these two factors affects a firm’s ability to create value in the short term and influences the level of discretion available to the firm in the long term. We argue that the interplay of discretion and orientation create a vicious (or virtuous) cycle, in which the firm either creates or destroys goodwill with stakeholders, thereby making it more or less likely that stakeholders will grant discretion in the future.

Keywords: stakeholder theory, managerial discretion, nexus rent

JEL Classification: L20, L21, M20, M14

Suggested Citation

Phillips, Robert A. and Berman, Shawn L. and Elms, Heather and Johnson-Cramer, Michael E., Stakeholder Orientation, Managerial Discretion and Nexus Rents (November 17, 2010). STAKEHOLDER THEORY, MANAGERIAL DISCRETION AND NEXUS RENTS, R. Phillips, ed., Edward Elgar Publishers, Northampton, 2010, Available at SSRN: https://ssrn.com/abstract=1710621

Robert A. Phillips (Contact Author)

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Shawn L. Berman

Santa Clara University ( email )

Santa Clara, CA 95053
United States

Heather Elms

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States

Michael E. Johnson-Cramer

Bucknell University - Department of Management ( email )

Lewisburg, PA 17837
570-577-1756 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
563
PlumX Metrics