A Global Investigation of Government and Community Stakeholder Influences on Large Company Engagement in Sustainability

Abstract

Business organizations are increasingly expected to address sustainability issues and to disclose sociallyresponsible behaviors accurately and transparently, showing that they are effective at managing and beingproactive about sustainability challenges. Stakeholder theory was used as a framework to investigate whetherinfluence effects from two institutional stakeholder types were associated with the levels of strategic engagementin sustainability for large publicly listed firms in twenty five countries. Government and community institutioneffects were quantitatively evaluated as discrete stakeholders with influence on the level of sustainabilityengagement for firms. Generally, there was significant variation in the average level of company engagement insustainability, depending on the country. Specific findings on the effects of stakeholder influence showedmedium effect sizes and that there were significantly higher levels of strategic company engagement insustainability when there was an optimal level of national government institutional power and in nationalcommunities with positive norms supporting sustainability and citizen based political action.