Stakeholder orientation and organizational performance in an emerging market

There has been research that studies Chinese firms’ stakeholder orientation but fails to identify Chinese firms’ specific stakeholder groups. In addition, little research in this line has been conducted so far to reflect recent Chinese constitutional transition. This study seeks to fill these gaps. It extends previous studies assuming that a fixed set of stakeholders is suitable for firms in different countries context, and identifies Chinese firms’ key stakeholder groups by adopting the descriptive approach of stakeholder theory. Based on this identification, the authors further examine how these stakeholder orientations influence organizational performance and how they interact. Interviews with managers from 107 firms show that customer, employee, shareholder, supplier, and competitors are perceived as Chinese firms’ most important stakeholders; empirical studies using data collected from 307 Chinese firms reveal that orientations towards these stakeholders enhance organizational performance. Moreover, there are synergy effects existing among customer orientation, supplier orientation, and competitor orientation, and between customer orientation and competitor orientation, while shareholder orientation has significant hindering effects upon competitor orientation as a reflection of recent institutional changes taking place in China.