Revisiting Who, When, and Why Stakeholders Matter: Trust and Stakeholder Connectedness

With limited resources and attention, managers have sought ways to categorize and prioritize stakeholders. The underlying assumption is that some stakeholders matter more than others. However, in the information age, stakeholders are increasingly interconnected, where a firm’s actions toward one stakeholder are visible to others and can affect members of the stakeholder ecosystem. Actions by a firm toward any of its stakeholders can signal its trustworthiness and determine to what degree other stakeholders will assume vulnerability and engage in future exchange relationships. In this conceptual article, I present a model of stakeholder connectedness and describe the conditions in which a firm’s actions toward one stakeholder can build or erode trust across stakeholders. This work contributes to current tensions in stakeholder theory by elucidating how the treatment of a single stakeholder, or a narrow group of stakeholders, can have cascading effects on a broader group of stakeholders.