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Innovative Stakeholder Relations: When “Ethics Pays” (and When it Doesn’t)

Published online by Cambridge University Press:  23 January 2015

Troy R. Harting ,
Susan S. Harmeling  and
S. Venkataraman
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Abstract:

Business ethicists are eager to connect the ethical treatment of stakeholders with financial rewards. However, little attention has been paid to the cultural and industry context that influences how stakeholders are regarded by the firm, and how innovative strategies for engaging stakeholders can help a firm outperform its competitors. By reconnecting stakeholder theory to its roots in the field of strategy, we provide a framework for understanding the dynamic interplay between stakeholder relationships, innovation, and competitive advantage. The result is a set of testable propositions aimed at better characterizing when and how “ethics pays” (Paine 2003).

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Business Ethics Quarterly , Volume 16 , Issue 1 , January 2006 , pp. 43 - 68
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Copyright © Society for Business Ethics 2006

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