Jones, Harrison, Felps (2018)

Question 1

Instrumental stakeholder theory

Answer 1

developing stakeholder relationships governed by the norms of traditional ethics will lead to improved financial performance

Question 2

Arm’s length relationship

Answer 2

a relationship between companies that is loose, characterized by low relational investment and trust, and usually taking the form of a series of discrete transactions with no/low expectation of future interaction or service

Question 3

Integrated relationship

Answer 3

a relationship between companies that is tightly connected, with linked processes across and between firm boundaries, and high levels of trust and inter-firm commitment

Question 4

Why create relations?

Answer 4

Communal sharing relational ethics (CSRE: joint creation, mutual trust and cooperation etc) strategy can lead to Close relationship (CR) capability

Developing a close relationship capability should be valuable, rare and difficult to imitate to offer a sustainable competitive advantage

Question 5

Why is a close relationship capability rare:

Answer 5

1. Arm’s-length relationships with stakeholders tend to be the default position
2. Several factors can reduce managers motivation to adopt CSRE norms in pursuit of close relationship capability (incentives)
3. CSRE strategies are difficult to implement (egoist or competitive employees)
4. Difficulties with finding suitable stakeholder partners

Question 6

Why is a close relationship capability hard to imitate:

Answer 6

• Path dependency, hard to steer away from current path
• Causal ambiguity, difficult to find causes of CR capability
• Social complexity, many actors involved in the creation