Takin’ care of small business: The rise of stakeholder influence

Abstract

In this Exchange, we consider three crucial boundary conditions that Barnett, Henriques, and Husted (2020) overlooked in their model of diminished stakeholder influence. Although we agree that social media platforms have weakened stakeholder influence in certain conditions, such is not the case for all firms, all stakeholders, or all situations. Drawing from sociocognitive and self-determination theories, we contend that (a) independent, owner-managed small firms present a context wherein information overload is rendered less of an issue because the information about the firm is more salient to locals; (b) stakeholders can be motivated to influence firms via social media platforms, which facilitate the collective engagement of local community members; and (c) uncertain economic circumstances (e.g., COVID-19) activate stakeholder information searches, which often occur through social media. Together, these three conditions enhance stakeholder power and influence. We also contemplate how, even under these conditions, stakeholder influence may change over time vis-a-vis the issue–attention cycle and societalization. We conclude our Exchange with a call for more research on stakeholder influence over independent, owner-manager small businesses.