Stakeholder Orientation and Organizational Adaptation

This paper examines the conditions under which stakeholder orientation facilitates (or hinders) firms’ efforts to adapt to environmental disruptions, particularly technological shocks. To do so, we apply evolutionary economics to develop a theoretical framework on how variation, selection, and retention processes might differ in firms with a high vs. a low level of stakeholder orientation and how these differences can positively or negatively influence their adaptive capacity. We subsequently apply this reasoning to develop theory regarding four boundary conditions of the effectiveness of stakeholder orientation as an adaptation mechanism: two of these conditions are related to characteristics of the technological disruptions, and two are organizational characteristics. The proposed model offers a first application of evolutionary thinking to explain the dynamic fit between stakeholder orientation and organizational adaptive responses, under conditions of environmental (technological) disruption. A research agenda for future scholars in stakeholder theory, organizational evolution, and adaptation to radical change concludes.