Stakeholder Orientation and Alliance Partner Attractiveness

This study contributes to the literature on strategic alliances by examining the relationship between a firm’s stakeholder orientation and its attractiveness as an alliance partner. We suggest that stakeholder orientation, defined as the extent to which a firm adopts policies and management processes to identify, understand and integrate the interests of its stakeholders, mitigates opportunistic hazards, and facilitates the selection process in alliance formation. We theorize that stakeholder-oriented firms display lower informational opacity, signal integrity, and experience lower coordination costs to prospective partners. We validated our arguments through a matched sample of US listed firms over the period 2002-2017. We found support for our baseline hypothesis, which posited that stakeholder orientation improves a firm’s attractiveness as an alliance partner. In addition, we observed that a firm’s decision to allocate disproportionate attention toward certain stakeholder categories had a negative effect on the likelihood of being selected as an alliance partner. Lastly, our results showed that the beneficial effect of stakeholder orientation is reduced at high levels of partnering experience