The stakeholder orientation paradox: implications for supplier sustainability risk and the role of institutional distance
Bibliographic record
Abstract
Purpose Stakeholder orientation is a strategic approach to identify and mitigate supplier sustainability risk (SSR) across different institutional contexts. However, increased orientation may also alter stakeholder expectations and implied obligations, potentially exacerbating risk. We refer to this tension between opposing effects as the stakeholder orientation paradox. Drawing on stakeholder and expectancy theories, this study theorizes and empirically investigates the paradoxical relationship between a firm’s stakeholder orientation and SSR, moderated by the institutional distance between the firm’s home country and the country where the risk arises. Design/methodology/approach Econometric models are constructed and estimated using a unique panel dataset of 27,545 observations derived from multiple data sources from 2009 to 2023, encompassing 5,911 supply chain sustainability incidents across 170 countries and involving 811 buying firms headquartered in 44 countries. Findings Our findings reveal a paradoxical positive association between stakeholder orientation and SSR, amplified by institutional distance. Thus, notable evidence supports the need to integrate expectancy theory facets into stakeholder theory considerations as firms (re)shape their efforts to mitigate SSR. Practical implications As firms strengthen their stakeholder orientation, care must be exercised to avoid over-promising sustainability commitments and under-delivering on supply chain performance. Proactive engagement with diverse stakeholder groups, tailored to distant institutional contexts, can alert firms to emerging problems and prompt immediate action with suppliers before incidents escalate further. Originality/value This study contributes to the scarce empirical literature on SSR antecedents and advances understanding of counterintuitive stakeholder orientation outcomes. While prior research has highlighted the benefits of stakeholder orientation, our findings suggest that firms need to “walk the talk” to reduce SSR. Furthermore, by exploring the role of institutional distance, we extend the research on stakeholder orientation beyond its typical U.S.-centric scope.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.002 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.001 | 0.000 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".