Date of Award
Spring 2012
Degree Type
Dissertation
Degree Name
Doctor of Business Administration (DBA)
First Advisor
Dr. Joseph F. Hair
Second Advisor
Dr. Torsten Pieper
Third Advisor
Dr. Brian Rutherford
Abstract
In search of drivers of sustainable competitive advantage, this study integrates aspects of stakeholder theory and market orientation. The work results in the concept of extended stakeholder orientation incorporating proactive elements for the first time. Market orientation focuses on customers and competitors – two key stakeholders. Stakeholder theory seeks to broaden the focus to a wider group of stakeholders including employees and shareholders who together with customers and competitors are seen as ‘essential’ stakeholders. Relationships, interactions and ongoing mutual impact on firm activities involving essential stakeholders are fundamental and frequent. While other views of stakeholder theory place more emphasis on stakeholders such as suppliers, community and the environment, the essential stakeholders represent a core from a managerial standpoint, thus serving as justification for the approach chosen for this study. Since market orientation has emerged as a versatile and empirically sound theory positively relevant across cultures, industries and drivers of firm performance such as innovation, the considerable research within market orientation informed this study. In particular, research by Narver, Slater and McLachlan (2004) suggesting that the market orientation concept could be extended to distinct responsive and proactive components inspired the current proposed extension to stakeholder orientation. Specifically, a key development is to incorporate proactive or anticipatory, forward looking aspects of stakeholder orientation in addition to the traditional responsive elements. Development of the multiple validated scales related to the core stakeholders and innovation orientation provide useful guidelines for managers and researchers alike. Extended stakeholder orientation and innovation orientation as developed were tested for their effect on firm performance including financial and non-financial measures. Based on a cross-section of public and private companies including small to medium enterprises, this study found extended stakeholder orientation to be an important driver of innovation orientation and firm performance.