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A ‘Names-and-Faces Approach’ to Stakeholder Identification and Salience: A Matter of Status

Elise Perrault1

Received: 6 April 2015 / Accepted: 26 October 2015 / Published online: 29 October 2015

� Springer Science+Business Media Dordrecht 2015

Abstract Despite its increasing popularity across manage-

ment disciplines, stakeholder theory holds an important

shortcoming in terms of its guidance for understanding the

heterogeneity of stakeholder interests, claims, and behavior

toward firms. Specifically, scholars note the inadequacy of

generic categories of stakeholders (e.g., customers, employ-

ees, shareholders, and suppliers) in providing a realistic por-

trait of the groups and individuals that interact with the firm,

opening the theory to much criticism for a ‘simplistic’ and

‘meaningless’ stakeholder concept. In face of this challenge,

recent research is pointing to social identity as a mechanism to

refine our understanding of stakeholders as names-and-faces,

however we argue that despite the advancements offered by

the social identity approach, it too presents limitations in its

ability to guide managers in prioritizing stakeholder claims.

Building onthese nascent efforts to offer much needed nuance

to a theory of stakeholder identification and prioritization, this

paper draws from new advances in the management literature

and offers status as an attribute that helps explain and predict

how managers accord attention to their various constituents.

We set forth five propositions connecting stakeholder status to

the attention stakeholders receive from managers. We argue

that status is a superior attribute of stakeholder identification

and prioritization because it (1) accounts for groups and

individuals’ uniqueness within broad categories of stake-

holders in a dynamic way, (2) reconciles the dual nature of

stakeholders as holding simultaneously a social and an eco-

nomic identity in their claim toward the firm, and (3) provides

a plausible explanation of, and intuitive guidance to, how

managers accord attention to their firm’s stakeholders.

Implications and future directions for research complete this

article.

Keywords Stakeholder theory � Stakeholder management � Social identity � Stakeholder identification � Status

Introduction

Stakeholder theory proposes that firms are most successful

when they address the interests of their various constituents

(Freeman 2004; Freeman et al. 2010). In this view, not all

stakeholders are of equal importance to managers (Don-

aldson and Preston 1995; Gioia 1999; Phillips et al. 2003).

Indeed, while some deserve greater attention or priority in

managers’ agenda because of their important contribution

to the firm’s success (Harrison et al. 2010), others demand

attention by attempting to delegitimize some of the firm’s

practices that go against their interests (Mitchell et al.

1997) or by threatening the firm’s continued success

through activist tactics (den Hond and de Bakker 2007).

However, if firms are to successfully manage their stake-

holders, they must first be able to identify them. Thus, at

the core of stakeholder theory is the ‘problem’ of stake-

holder identification that is, the need to have guidelines or

principles that help identify who are the firm’s relevant

stakeholders, what are their interests, and what is the basis

of their claim toward the firm.

To this point, stakeholder theorists (Agle et al. 1999;

Berman et al. 1999; Clarkson 1995; Freeman et al. 2010;

Griffin and Mahon 1997) observe the inadequacy of

stakeholder research’s tradition to identify stakeholders

based on the generic categories of customers, employees,

& Elise Perrault perraulte@cofc.edu

1 College of Charleston, 66 George St, B-328, Charleston,

SC 29420, USA

123

J Bus Ethics (2017) 146:25–38

DOI 10.1007/s10551-015-2929-1

suppliers, shareholders and the community, or those that

slice and dice stakeholders broadly based on their role

toward the firm (e.g., market/non market, etc.). These

typologies are problematic because they omit to consider

how groups form, coalesce, and mobilize in pressing their

interests to the firm (Wolfe and Putler 2002), which pro-

vides valuable insight as to how managers must address

their interests to successfully coopt these stakeholders’

support (Waldron et al. 2013). It also fails to account for

stakeholders who span several categories (e.g., employees

who are also shareholders and/or customers), and for

stakeholders who—with the same social identity—migrate

from one economic category to another (Crane and Rue-

bottom 2011; McVea and Freeman 2005).

In face of this challenge, scholars have suggested to rely

on a ‘names-and-faces approach’ to stakeholder identifi-

cation (McVea and Freeman 2005). However, this

approach was originally set forth in the context of entre-

preneurial ventures, where the focus is explicitly on the

creation of new goods and services and where a relatively

small number of stakeholders are more closely intertwined

(Jawahar and McLaughlin 2001). While an entrepreneurial

focus applies in some ways to large corporations—because

fast-paced technology developments demand and foster the

creation of new products and services, for example—it is

unclear how a ‘names-and-faces approach’ that relies on

the personal knowledge of individuals with a unique value

proposition to realize with the firm can be integrated in

large corporations’ management practices.

Building on this commentary, scholars have recently

turned to social identity as a basis for stakeholder identi-

fication (e.g., Crane and Ruebottom 2011). This approach

appears promising for several reasons, however it also

holds shortcomings that restrict its applicability in reality.

Most notably, a social identity typology rests on the self-

descriptions that stakeholders develop because of how they

perceive themselves, which may—and likely—differ from

the way in which managers view stakeholders. Thus, it

proposes an answer to the problem of stakeholder identi-

fication that lies with individual stakeholder groups—

which comes at odds with the bulk of the stakeholder lit-

erature that recognizes the importance of managerial per-

ceptions of stakeholders on their firm’s interaction (Bundy

et al. 2013; Mitchell et al. 1997; Waldron et al. 2013).

The present paper returns to this paradigm where, to

understand how managers perceive and respond to their

stakeholders, a theory of stakeholder identification must

rest in managerial perceptions of stakeholders (Agle et al.

1999; Mitchell et al. 1997; Parent and Deephouse 2007).

Merging the idea of a ‘names-and-faces approach’ with

previous efforts to conceptualize the identification and

prioritization of stakeholders by managers, we recognize

that such a typology must accomplish at least three things:

(1) account for groups and individuals’ uniqueness within

broad categories of stakeholders in a dynamic way, (2)

recognize the dual nature of stakeholders as holding

simultaneously a social and an economic identity in their

claim toward the firm, and (3) provide a plausible expla-

nation of, and intuitive guidance to, how managers accord

attention to their firm’s stakeholders. After selectively

reviewing the literature on stakeholder identification and

salience, we draw from new advances in the management

literature to offer status as an attribute that transcends

generic stakeholder categories and enables managers to

perceive their stakeholders specifically—as ‘‘real people

with names and faces’’ (McVea and Freeman 2005).

Status is just beginning to emerge as an attribute that

explains previously elusive management phenomena

(Pearce 2011; Piazza and Castellucci 2014). Commonly

defined as ‘‘the socially constructed, intersubjectively

agreed-upon and accepted ordering or ranking of individ-

uals, groups, organizations, or activities in a social sys-

tem’’ (Washington and Zajac 2005, p. 284), status presents

several advantages of both conceptual and empirical nat-

ure. Theoretically, status provides an intuitive, first

assessment of one’s desire to engage with a party (Jensen

and Roy 2008) while capturing multiple facets of social

interactions—economic as well as social in nature (Pearce

2011). In itself, this is an important extension to existing

work on stakeholder theory because it incorporates recent

research’s findings that stakeholders interact with the firm

from a dual identity that incorporates both economic and

social components (Crane and Ruebottom 2011; Perrault

and Clark 2015). Thus, status enables us to account for

stakeholders’ inherent dual nature, that is, their economic

role toward the firm and their social identity simultane-

ously. Empirically, status applies at the individual level

and provides a natural ranking of constituencies (Deep-

house and Suchman 2008). As such, it enables managers to

perceive differences in stakeholders’ desirability that lar-

gely explains, and predicts, the priority level they obtain in

managers’ agenda.

This article contributes to recent conversations in the

stakeholder literature seeking to understand how stake-

holders generally interact with the firm and how managers

perceive and prioritize their interests (Crane and Ruebot-

tom 2011; Parent and Deephouse 2007; Wolfe and Putler

2002). In advancing status as an attribute of stakeholder

identification and prioritization, we apply the ‘names-and-

faces approach’ to the context of large corporations’

management practices. As we do so, we offer a theoreti-

cally and empirically useful construct that enables us to

better understand how managers respond to their con-

stituents, based on their perceptions. As such, we con-

tribute an important nugget to a key topic of stakeholder

theory that remains largely under-examined. Lastly, this

26 E. Perrault

123

article contributes germane knowledge to the growing body

of literature examining the importance of status in man-

agerial contexts, while presenting a sought-after applica-

tion of status across the macro and meso levels of firms’

interaction with stakeholders in a market context (Piazza

and Castellucci 2014). In the following section, we first

review the literature on stakeholder identification and sal-

ience, after which we expound the value of status to this

body of literature. Considerations for future research and

managers conclude this article.

In Pursuit of a ‘Names-and-Faces Approach’

One of the most enduring criticism of stakeholder theory is

its lack of managerial practicality (Donaldson and Dunfee

1994; Freeman et al. 2010; Jones and Wicks 1999;

Laplume et al. 2008; Phillips and Reichart 2000) based in

the theory’s lack of specificity regarding the stakeholder

construct (Crane and Ruebottom 2011). Indeed, from the

original theory, a stakeholder is ‘‘any group or individual

who can affect or be affected by the firm’s activities’’… (Freeman 1984, p. 46) [emphasis added]. Over the years,

this definition has lent itself to multiple interpretations and

categorizations that still, today, fail to capture the essence

of the groups who interact with firms (Crane and Ruebot-

tom 2011; McVea and Freeman 2005; Wolfe and Putler

2002).

Recent stakeholder research has addressed this criticism

head on. Notably, McVea and Freeman (2005, p. 67)

observe that much of stakeholder theory has lost touch with

practitioners’ reality such that ‘‘stakeholder theory stands

at something of a crossroads’’ and that ‘‘it is time for a

radical rethinking of the stakeholder approach to business.’’

They write ‘‘to manage stakeholder relations according to

the traditional groupings (customers, employees, suppliers,

shareholders, community) would be to blind the entrepre-

neur to some of the critical characteristics of the contem-

porary business environment’’ (McVea and Freeman 2005,

p. 63). By radical rethinking, the authors advocate the

identification of stakeholders through ‘names-and-faces’

and go so far as to reformulate the principles underlying a

stakeholder approach as ‘‘firms that treat their stakeholder

as individuals with names and faces will develop more

value-creating strategies and will also incorporate ethics as

an inherent part of the decision-making process.’’

In this view, the names-and-faces approach rests on

three cornerstones: a focus on value creation, individual

decision-making, and individual relationships (McVea and

Freeman 2005). Of great importance, however, is the

observation that the premise underlying the names-and-

faces approach is entrepreneurial value creation through

the discovery and exploitation of new opportunities that lie

within stakeholders—because of their differential knowl-

edge for example. While this focus on entrepreneurship is

relevant across business types because of its ties to the

fundamental principles of stakeholder theory—that is,

value creation—it advocates personal relationships

between managers and stakeholders, as well as individu-

alized strategic decisions—all of which seems difficult to

conceive of in the context of large corporations’ daily

practices.

Specifically, large corporations are different from

entrepreneurial ventures in the depth and breadth of man-

agerial hierarchies that make decisions on behalf of the

firm, as well as the departmentalization of boundary-

spanning liaisons to stakeholders through generic groups

(such that a customer service department is in charge of

customer relations, a shareholder relations department is in

charge of relationships with shareholders, etc.) (Lawrence

and Weber 2011). These core differences make it espe-

cially difficult for large corporations to approach strategic

decision-making from an individualized perspective since

decisions tend to be taken based on the shared values

developed by teams of high level managers, for instance

(Forbes and Milliken 1999; Simon 1979). It is also difficult

to envision the firm nurturing personal relationships with

thousands of disparate stakeholders who hold conflicting

interests and whose voices can barely get heard in the midst

of those firms’ ongoing complexity.

Building on the names-and-faces approach, recent

research has suggested to use social identity to parse out

the heterogeneity of interests among individual stakehold-

ers within generic categories (e.g., Crane and Ruebottom

2011). An individual or group’s social identity is essen-

tially its answer to the question ‘who are we’ (Ashforth and

Mael 1989; Kuhn and McPartland 1954), which takes into

consideration the multiple roles, positions, and facets of

identification that define and distinguish one from others

(Stryker and Burke 2000). A social identity lens is partic-

ularly useful to a theory of stakeholder identification

because it captures the simultaneous influences that play

out in stakeholders’ interaction with the firm. In turn,

recent research argues that these influences are almost

always of dual nature in that they include both social and

economic elements (Crane and Ruebottom 2011; Wolfe

and Putler 2002), such that current typologies focused on

stakeholders’ economic roles with the firm omit an

important aspect of who stakeholder are, what they want,

and why they behave the way they do (Wolfe and Putler

2002). Thus, identifying stakeholders based on their social

identity—which comprises both the social and economic

dimensions of a group’s identity—enables managers to

better understand stakeholders’ interests, in a first tense,

and ultimately to better satisfy those so as to gain and

maintain their support.

A ‘Names-and-Faces Approach’ to Stakeholder Identification and Salience: A Matter of Status 27

123

However, the problem with a theory of stakeholder

identification that relies on social identities is two-fold.

First, it is complex. Social identity is a dynamic construct

that reflects the constant evolution of psychological and

social aspects of an individual (Tajfel 1974). As the pro-

duct of a lifetime of experiences and relationships, social

identities are highly intricate in that they hold social and

economic dimensions (Crane and Ruebottom 2011), and

values that are sometimes transient across the individual’s

roles and sometimes specific to a given context (Burke and

Reitzes 1981; Wolfe and Putler 2002). Thus, while relying

on social identities provides a compelling way to distin-

guish the particularities of each stakeholder group, it

appears unrealistic to suggest that managers can perceive,

and make decisions, based on the intricacies of stake-

holders’ social identities. Second, and relatedly, social

identities are constructed by each individual or group, and

oftentimes are not explicitly articulated. This creates

additional difficulty for managers attempting to uncover

the specificity of their constituents. For this reason, the

bulk of stakeholder research supports that a theory of

stakeholder identification must be anchored in managers’

perceptions of stakeholder attributes, as opposed to the

objective measurement of the attributes themselves.

In the tradition of identifying stakeholders based on

managerial perceptions, Mitchell et al.’s (1997) theory of

stakeholder identification and salience still stands as a

cornerstone. Using a multi-theoretic approach, the authors

developed a ‘principle of who and what really counts’

anchored in managers’ perceptions of their constituents.

While the principles underlying Mitchell et al.’s (1997)

theory are sound and well developed, the theory is also

appealing because of its apparent simplicity: groups

become stakeholders either when they have a legitimate

claim on the firm, or they have the ability to influence the

firm (e.g., power). These attributes add up and when the

stakeholder also presents an urgent claim, it gains the

highest level of priority in managers’ agenda (e.g., high

salience).

However, this theory also presents a number of draw-

backs that have resulted in scarce and inconclusive

empirical studies over the almost two decades of the the-

ory’s popularity (Laplume et al. 2008; Parent and Deep-

house 2007). First, there is question as to whether power

and legitimacy are the most useful attributes to identify and

prioritize stakeholder groups. For instance, previous

research finds that power tends to supersede any other

attribute in managers’ perceptions (Parent and Deephouse

2007; Roloff 2008), while it remains unclear which type of

power gets a group to become a stakeholder. As a result,

extant research has tended to interpret power in its narrow

economic sense (David et al. 2007; Eesley and Lenox

2006), restricting the applicability of the model to market

stakeholders. Meanwhile, other types of power—such as

the political power a stakeholder garners when engaging in

activism or other activities that affect the performance of a

firm—are becoming increasingly relevant to explaining

firms’ management of stakeholders (King 2008; Waldron

et al. 2013). For example, over time hotels may pay greater

attention to customer service as a result of clients

increasingly using online rating systems to post feedback

from their stay on popular travel websites. Yet, power that

stems from other sources than economic factors typically

remains unaccounted for in the stakeholder management

literature.

Likewise, legitimacy as an attribute of stakeholder

identification has received much criticism largely because

all stakeholders identified as such must present some

legitimate basis for their claim toward the firm, even if they

derive legitimacy from having the power to disrupt the

firm’s practices (Phillips 2003). Thus, there is conceptually

little room for envisioning an ‘illegitimate stakeholder,’

while confusion remains as to whether legitimacy stands

alone as a stakeholder attribute or is obtained as a result of

having power to affect the firm (Phillips 2003). In addition,

legitimacy is understood narrowly [in terms of the stake-

holders’ normative acceptance in society, (Suchman 1995)]

while recent literature suggests that firms can perceive

various levels of legitimacy depending on how the stake-

holders’ issue meshes with the firm’s identity and its

strategic frame (Bundy et al. 2013).

Second, and relatedly, Mitchell et al.’s (1997) theory

relies on the addition of stakeholder attributes in managers’

perceptions. They suggest to categorize stakeholders as

latent, expectant, or definitive, based on whether they are

perceived to possess one, two, or the three attributes of

power, legitimacy, and urgency. However, it is highly

unlikely that managers separate, in reality, their percep-

tions and the effect of stakeholders’ attributes. Rather,

managers tend to view business problems or their rela-

tionships with a stakeholder group holistically, in terms of

the degree to which they need to pay attention to that

constituent’s interest (McVea and Freeman 2005). Thus,

instead of adding up what is purported as independent

stakeholder attributes (Mitchell et al. 1997), we need to

consider the possibility that attributes compound or interact

in managers’ perceptions, creating a larger and united

effect in managers’ decisions to engage with certain

constituents.

Lastly, as Mitchell et al. (1997) recognize, stakeholder

attributes are not steady states; rather, they vary over time,

with the dynamism of the relationship between the stake-

holder and the firm, and with the stakeholder’s prominence

in society. As such, it becomes evident that a generic

approach to stakeholder identification and prioritization is

inadequate. That is, even while Mitchell et al.’s (1997)

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typology helps understand why managers may accord

higher priority to shareholders than a NGO (because

shareholders possess a superior number of attributes, that

is), the typology is less useful to explain and predict how

managers accord attention to specific stakeholders within

the same generic category (e.g., why managers agree to

work with one community organization but not another,

given both have low power, high legitimacy, and little

urgency for example).

In light of these recent developments in the literature on

stakeholder identification advocating, and building on a

names-and-faces approach, we argue that a typology of

stakeholder identification must accomplish at least three

things: (1) account for groups and individuals’ uniqueness

within broad categories of stakeholders in a dynamic way,

(2) recognize the dual nature of stakeholders as holding

simultaneously a social and an economic identity in their

claim toward the firm, and (3) provide a plausible expla-

nation of, and intuitive guidance to, how managers accord

attention to their firm’s stakeholders. While McVea and

Freeman (2005) as well as social identity approaches

(Crane and Ruebottom 2011; Wolfe and Putler 2002) and

Mitchell et al.’s (1997) theory accomplish the first two, a

coherent model of stakeholder identification still lacks the

guidance of a simple, intuitive attribute based on which

managers realistically—and actually—form their decisions

regarding stakeholders. In the following section, we argue

that this attribute is stakeholder status.

A Matter of Status

In light of the literature reviewed above, status is concep-

tually attractive to a theory of stakeholder identification

and prioritization for several reasons. We note that status is

inherently a differentiating, ordering attribute, which is

helpful to understand managers’ view of stakeholders in

terms of their uniqueness. In management research, the

rank-ordering of actors based on their status is increasingly

conceptualized and operationalized on a non-denomina-

tional scale ranging from low to high (Bitektine 2011;

Perrault and Clark 2015; Phillips and Zuckerman 2001). In

this section, we discuss the specific characteristics of status

and set forth propositions that explain how managers may

identify and prioritize stakeholders based on their level of

status.

Status is primarily attractive to a theory of stakeholder

identification and prioritization because of its relational

character. Recent research is increasingly pointing to the

characteristics of stakeholders in relationship with the firm

in order to explain firm behavior (Bundy and Pfarrer 2015;

Bundy et al. 2013; Eesley and Lenox 2006; Waldron et al.

2013). In the same way, status is relational because it

transfers by association. That is, a group can gain status by

association with a higher status group (Washington and

Zajac 2005), and likewise, a group can lose status because

of its affiliations with lower status groups (Jensen 2006).

Thus, it offers a dynamic representation of stakeholders in

managerial perceptions. In addition to enhancing one’s

status, association with high-status groups heightens per-

ceptions of one’s legitimacy (Bitektine 2011; Deephouse

and Suchman 2008)). This matters because the essence of

status is the ability to gain privileges, or suffer discrimi-

nation, based on one’s (a firm’s) standing in a social sys-

tem. As such, it is one’s ‘order’ or ‘ranking’ that largely

determines what s/he gets access to (Piazza and Castellucci

2014), whereas those with higher status get more—both in

terms of resources and attention (Thye 2000). Thus, a

general proposition regarding firms’ stakeholder manage-

ment follows in that firms will accord higher attention to

stakeholders whom they perceive to bear status benefits.

Likewise, for cause of status anxiety (Jensen 2006)—the

fear of falling in the status hierarchy and to lose status-

related privileges as a result—firms will refrain from

associating with stakeholders of lower status. This propo-

sition is intuitive given human beings’ intuitive reach for

higher status associations (Huberman et al. 2004) and the

myriad of privileges the firm can benefit from as a result of

higher status associations—chief among which the

enhancement of its legitimacy in the social system, which

opens the pathway for resource appropriation (Benjamin

and Podolny 1999; Bitektine 2011; Jensen et al. 2011). We

propose:

P1. Firms will seek to associate with (disassociate

from) stakeholders when they perceive they can gain

(lose) status from the association.

The definition of status further specifies that one’s status

level is determined within a ‘‘social system,’’ highlighting

the importance of the context of reference in which

stakeholders are evaluated. Specifically, for the purpose of

stakeholder identification, we argue that there are two

social systems that construct and perpetuate the intersub-

jective agreement from which managers derive their per-

ceptions of stakeholders’ status. First, society is the social

system typically understood and referred to as the basis of

status categories (Bitektine 2011). Society constructs and

perpetuates a group’s status largely through the tone of

media communications regarding the group (Castellucci

and Ertug 2010; Perrault and Clark 2015). These media

communications attach a standing of desirability or pres-

tige to individuals and organizations, which act as anchors

in people’s perceptions of the individual or group in

question (Barkemeyer et al. 2009; Deephouse 2000). For

example, the tone of the media communications regarding

People for the Ethical Treatment of Animals (PETA) and

A ‘Names-and-Faces Approach’ to Stakeholder Identification and Salience: A Matter of Status 29

123

Teamsters have largely determined the public perception of

their desirability.

Society is an important system in shaping managers’

perceptions of status because the firm acquires and main-

tains its legitimacy primarily through conformance with

society’s values and practices (Meyer and Rowan 1977). In

turn, legitimacy is impacted by status—where high status

can grant legitimacy to actors and activities that would

otherwise be considered outside the norms (Castellucci and

Ertug 2010; Elsbach and Sutton 1992; Thye 2000). For

example, gambling may be perceived as a prestigious

activity if engaged in by a Hollywood star but perceived

lowly if engaged in by a homeless person. The firm can

also enhance or lose some legitimacy through their asso-

ciation with stakeholders, as explained above (Ball and

Eckel 1996; Gould 2002; Washington and Zajac 2005). For

example, a manufacturing company can gain legitimacy

and status through a contract with a high-status brand, such

as a previously unknown seat maker obtaining a contract

with Cadillac automobiles. Thus, it is reasonable to infer

that firms will prefer to associate with stakeholders that

society views as high status so as to preserve or enhance

their legitimacy.

Even while society generally acts as the most important

force shaping perceptions of status, in the context of

stakeholder identification, we argue that yet another social

system is contextually relevant to the formation of man-

agers’ perceptions of stakeholders’ status: the firm.

Research has validated that firms act in of themselves as

social systems with a unique culture that shapes the firm’s

values, ethics, guidelines, and practices (Zucker 1983). In

this way, the firm influences managers’ perceptions of

stakeholders’ status by setting a standard of desirability

anchored in a unique culture that may differ from that of

society. When managers make decisions regarding stake-

holders, they do so by taking into account their firm’s

identity, strategic goals, and the signals they convey by

engaging with certain groups (Bundy et al. 2013)—thus the

‘‘social system’’ within which managers construct their

ordering of individuals.

The firm can also influence perceptions of status because

of the firm’s (or managers’) previous interaction(s), and

thus more specific knowledge, of a stakeholder. As a

hypothetical example, a firm looking to impress a client

may look for a catering supplier of a high status. Even

while society has bestowed upon the Millenia commercial

bakery high status by giving it coverage in the media as a

supplier of baked goods for the White House, the firm may

have had a negative experience in its previous interaction

with Millenia. It may have been dissatisfied with its tar-

diness or the taste of its products. Thus, managers may

accord Millenia lower status than society, because society

has not had the personal experience with the bakery that the

firm did. In short, the firm sets practical guidelines from

which managers derive perceptions of status that may

differ from, or support, those generally perceived by

society. Thus we propose:

P2. Firms will accord greater (lesser) attention to

stakeholders that are perceived to have lower (higher)

status in society when these stakeholders are per-

ceived to have a higher (lower) status at the firm

level.

Conceptually, it appears intuitive and sound that firms

would always prefer to engage with stakeholders of higher

status. However, previous research observes that, at times,

firms also engage with stakeholders of low status (Castel-

lucci and Ertug 2010; Piazza and Castellucci 2014). We

suggest that these counter-intuitive associations occur in

two types of circumstances: willingly or unwillingly. First,

it could be that the firm willingly seeks a stakeholder of

lower status. For example, previous research shows that a

supplier of lower status puts more effort in fulfilling the

firm’s demand, resulting in higher quality products or

services (Castellucci and Ertug 2010). Such is the case

because the lower status supplier attempts to gain the

benefits of associating with the higher status contracting

firm (Castellucci and Ertug 2010). However, it could also

be that the firm is unwillingly thrusted into engaging with a

low-status stakeholder. Above, we discussed the increasing

political power of stakeholders and their growing ability to

command that firms respond to their demands by pressur-

ing them through legitimacy and/or reputational threats

(den Hond and de Bakker 2007). For example, a disgrun-

tled low-status stakeholder can buy a minimum amount of

a public firm’s stock (usually $2000) and thus obtain the

power to publicly file a shareholder proposal to expose a

firm’s concern (Goranova and Ryan 2014). Likewise, a

low-status stakeholder can organize a boycott or strike to

channel media attention to call into question the legitimacy

of a firm’s practice and thus force the firm to address their

issue (King 2008). For these reasons, firms also engage

with stakeholders of low status in reality, whether they

choose to do so or not. We propose:

P3a. Firms will accord greater attention to stake-

holders that are perceived to have lower status in

society when firms perceive they can gain a greater

effort from the stakeholder while not harming the

firm’s legitimacy.

And:

P3b. Firms will accord greater attention to stake-

holders that are perceived to have lower status in

society when these stakeholders have the power to

affect the firm’s activities.

30 E. Perrault

123

Indeed, previous research notes the importance of power

in firm–stakeholder relationships (e.g., Parent and Deep-

house 2007). Likewise, we agree that power permeates

relationships, as explained above. The conceptual advan-

tage of status here is that perceptions of status account in

large part for stakeholder power. For instance, researchers

find that groups can gain high power from their status

because they are offered more opportunities, influence, and

are evaluated more positively for their performance

(Magee and Galinsky 2008; Thye 2000). Thus, actors of

high status gain power through deference, since because of

their high status, others tend to acquiesce to their demands

and allocate them more resources (Thye 2000). By con-

trast, actors of low status have been shown to be more

prone to use coercive power in order to obtain what they

want (Phillips and Zuckerman 2001). They do so because

their low status does not enable them to command defer-

ence while they also have ‘‘nothing to lose’’ from behaving

in ways that may be considered illegitimate (Elsbach and

Sutton 1992; Phillips and Zuckerman 2001). This view

suggests that groups of middle status are the ones least

likely to obtain firms’ attention because they are enslaved

by the pressure to conform: their lack of high status pre-

vents them from commanding deference while their aspi-

ration to reach a higher status bracket prevents them from

exercising less legitimate types of power (Phillips and

Zuckerman 2001). We propose:

P4. Firms will accord the least amount of attention to

stakeholders that are perceived to have middle status.

Figure 1 illustrates how status guides managers’ percep-

tions of stakeholders. It shows that as stakeholders’ status

increase, so does their desirability to managers. However,

both low- and high-status groups can command managerial

attention in reality through their exercise of power—which

middle status groups tend not to enforce due to their

pressure to conform.

In addition to guiding predictions about how managers

will identify and prioritize stakeholders, status is advanta-

geous because of its applicability at multiple levels of

analysis (Piazza and Castellucci 2014). While earlier

writings of status have focused on its effect on interper-

sonal relationships in social settings (Gould 2002; Weber

1978), status is beginning to gain traction as an explanation

to firms’ choice of exchange partners in markets (Jensen

et al. 2011; Podolny 1993, 2005) as well as to the relational

dynamics of dyads and teams in management settings

(Pearce 2011). In the context of a theory of stakeholder

identification and prioritization, it is noteworthy that sev-

eral levels of analysis are at play—from the stakeholder

group and its claim (Mitchell et al. 1997) to the charac-

teristics of the stakeholder’s relationship with the firm

(Eesley and Lenox 2006) to the firm’s values, identity, and

strategic frames (Bundy et al. 2013). Given the uncertainty

that plagues firms’ relationships with stakeholders, status

holds the potential to provide an explanation to both the

relationships that managers form within their firm’s struc-

tured network of stakeholders as well as to the more

unstructured relationships that emerge from their presence

in the market—such as those with the media, the com-

munity, and peer firms. In this way, status acts as a signal

of desirability (Perrault and Clark 2015) that guides man-

agers in their choice and treatment of relationships, while

representing a valuable intangible asset as well as a mobile

resource (Piazza and Castellucci 2014)—all of which

contribute to a more precise understanding of managers’

dynamic interactions with stakeholders, which is more

realistic to how managers actually make decisions (McVea

and Freeman 2005).

Why Status is a Superior Attribute for Stakeholder Identification and Prioritization

Based on our review of the literature, we observe that to

move forward in our understanding of stakeholder identifi-

cation and prioritization by managers, our efforts must

accomplish at least three things: (1) account for groups and

individuals’ uniqueness within broad categories of stake-

holders in a dynamic way, (2) recognize the dual nature of

stakeholders as holding simultaneously a social and an

economic identity in their claim toward the firm, and (3)

provide a plausible explanation of, and intuitive guidance to,

how managers accord attention to their firm’s stakeholders.

In this section, we further explain how in addition to status’

general conceptual fit with a theory of stakeholder identifi-

cation and prioritization it enables us to specifically under-

stand managers’ attention to stakeholders. Fig. 1 Managerial perceptions of stakeholder desirability and stake- holder ability to command managerial attention

A ‘Names-and-Faces Approach’ to Stakeholder Identification and Salience: A Matter of Status 31

123

Status Accounts for Individuals’ Uniqueness Within

Generic Categories of Stakeholders

One of the core features of status is that it represents a

fundamental aspect of social inequality among individuals

(Weber 1978). Contrary to attributes such as legitimacy

and power, which are often perceived as dichotomous (in

the sense of whether one possesses these attributes or not),

status is rival: it forces a competitive hierarchical ranking

between parties where one has higher status than the other

(Deephouse and Suchman 2008). Thus, where legitimacy

homogenizes groups as the population level, highlighting

the conforming elements through mechanisms such as

mimetism (Meyer and Rowan 1977), status highlights

differences between individuals and groups in order to

stimulate an intuitive ordering of their desirability (Deep-

house and Suchman 2008; Perrault and Clark 2015). In this

way, status enables us to move beyond generic catego-

rizations of stakeholders to assess how managers perceive

specific groups within them.

Empirically, previous research supports the inherent

ordering feature of status by noticing that status is gen-

erally operationalized as a ranking from low to high

(e.g., Bitektine 2011; Phillips and Zuckerman 2001).

However, a recent review article (Piazza and Castellucci

2014) notes that status is also commonly operationalized

as a sophisticated ordering, based on individuals’ visi-

bility in the media or number of ties to others in their

network (Castellucci and Ertug 2010; Gould 2002; Per-

rault and Clark 2015). This indicates that managers, as

individuals, are able to perceive these nuances in stake-

holders’ status, and that these perceptions may play an

important role in the way they accord attention to their

various constituents.

We also make note of status’ dynamic character. Indeed,

status is constantly reevaluated because a group’s position

can easily change in the status hierarchy based on the status

level of its affiliations and the way in which the group is

generally perceived in its social context (Podolny 2005).

This comes in contrast with attributes such as power and

legitimacy, which tend to be relatively stable over time

(Parent and Deephouse 2007). Thus, status adds much

needed dynamism to a theory of stakeholder identification

and prioritization by reflecting the social system’s ever

changing perceptions of an individual or group into man-

agers’ perceptions of their stakeholders.

Status Accounts for the Dual Nature of Stakeholders

as Holding Simultaneously a Social

and an Economic Identity

In extant literature, status presents an explicit dual nature

that derives from both social and economic components.

That is, one can obtain status from either-or-and their

social position in society or their economic ability. Indeed,

there is a long tradition in the sociology and social psy-

chology literature to define, and analyze, status primarily in

terms of its effect on social relationships (Piazza and

Castellucci 2014). This line of inquiry generally refers to

the biblical ‘‘Matthew effect,’’ whereby contributions of

apparently similar quality are evaluated more positively

when the actor is of high status and more negatively when

the actor is of lower status (Gould 2002; Merton 1968).

Thus, status is honorific and places individuals in a hier-

archy of social class (Weber 1978) that is not based on

economic ability (Washington and Zajac 2005). The

resultant of this view is that status commands respect and

deference, while bestowing influence onto higher status

individuals (Ridgeway and Walker 1995).

In the management literature, status has been concep-

tualized largely based on its economic roots (e.g., Podolny

1993). More specifically, status has been tied to the per-

formance of a firm in a market environment and thus is

thought to help guide managers in their choice of exchange

partners (Benjamin and Podolny 1999; Castellucci and

Ertug 2010; Pfarrer et al. 2005; Podolny 1993; Podolny and

Phillips 1996). Indeed, previous research finds that those

with higher status benefit from greater power, and that in

turn their resources are perceived as more valuable while it

enables them to obtain a greater share of resources (Thye

2000). This aspect of status is important to a theory of

stakeholder identification and prioritization because it

confirms that status is positively related to resource allo-

cation (e.g., Shafritz et al. 2005).

Despite the dual nature of status as a social and eco-

nomic construct (Weber 1947), it is noteworthy that social

and economic status cannot be disentangled (Perrault and

Clark 2015). Likewise, recent stakeholder research notes

that stakeholders interact with the firm from a dual identity

that encompasses intertwined social and economic ele-

ments that ‘‘must be analyzed simultaneously’’ (Crane and

Ruebottom 2011, p. 78). Status thus reconciles the social

and economic dimensions that co-exist in stakeholders’

identity, a distinct conceptual advantage of using status as

opposed to other types of social evaluations such as power,

legitimacy, or reputation (Bitektine 2011).

Status Provides a Realistic and Intuitive

Explanation to How Managers Accord Attention

to Their Stakeholders

Another characteristic of status is that it provides an intu-

itive, all-encompassing assessment of a group’s desirabil-

ity. Because perceptions of a group’s status are based on

the subconscious evaluation of multiple and complex facets

of the group’s identity and behavior, including its power,

32 E. Perrault

123

status acts as a one-dimensional indicator of the group’s

desirability (Jensen and Roy 2008). Previous research

suggests that due to cognitive limitations, managers do not,

in reality, evaluate their constituents along single attributes

such as power, legitimacy, or urgency for example (McVea

and Freeman 2005). Rather, managers form holistic per-

ceptions that vaguely define the attractiveness of a rela-

tionship. As such, status more realistically captures the way

in which managers perceive their interest in each stake-

holder relationship.

As mentioned above, status is perception based, and

intersubjectively agreed-upon (Bitektine 2011; Washington

and Zajac 2005). What this means is that evaluations of a

group’s status can vary depending on who perceives the

stakeholder, the situation, the evaluator’s own circum-

stances, and a host of other variables left undefined in the

previous literature; however, because status is generally

defined by social indices that are implicitly concordant,

variations in perceptions of status may be relatively small

within the overall status ranking. In other words, different

managers may perceive the same stakeholder group to have

higher or lower status, but we would expect that they

generally rank stakeholder groups in a similar order. For

example, a manager at a large chemical corporation may

accord lower status to an environmental group such as

Greenpeace than would a manager at a small venture

focused on developing a water-saving device. Yet, both

managers may accord higher status to Boston Common

Assets, an institutional investor.

This leads us to the final advantage of status over other

attributes set forth to identify stakeholders and their sal-

ience to managers, the fact that perceptions of status rest

with managers. This last characteristic is important in

view of recent literature suggesting to use social identity

as a basis of stakeholder identification (e.g., Crane and

Ruebottom 2011). Indeed, social identity represents the

perception that individuals form of themselves (Tajfel

1974), which may—and likely does—differ from the

perception that managers form of the same stakeholder

group. Therefore, if we wish to provide a tool for

academicians and practitioners to understand how man-

agers identify and prioritize their stakeholders, we must

restrict our analysis to managerial perceptions of stake-

holders, such as their view of stakeholder status. Doing so

also increases the value of status as an empirical con-

struct. That is, where previous research has struggled with

the operationalization of power (by restricting it to its

economic sense), legitimacy, and urgency (see Eesley and

Lenox 2006 for a discussion of some of these issues),

status has been operationalized through measures that are

largely agreed-upon in the literature (e.g., see Castellucci

and Ertug 2010; Perrault and Clark 2015; Piazza and

Castellucci 2014).

A summary of the advantages of status as an attribute of

stakeholder identification and prioritization over constructs

previously advanced in the stakeholder literature (social

identity, power, legitimacy, and urgency) is presented in

Table 1 below. In sum, individual attributes of salience

such as power, legitimacy, and urgency fail to account for

stakeholders’ unique characteristics within their broad

category as well as the dual nature of stakeholders as

comprising both social and economic dimensions. In turn,

social identity remains difficult in its application because

the social identity is generated by stakeholders’ own per-

ceptions of their identity and objectives, in contrast to that

of managers.

Below are a few vignettes that illustrate how status

guides managers’ interaction with stakeholders in reality.

The main proposition of this paper is that firms identify

stakeholders based on their status and seek to engage with

those of higher status in order to reap the benefits of status

by association (P1). Such benefits can vary in form

depending on the firm’s own status, other social approval

assets (such as its reputation or legitimacy), and even the

firm’s life cycle. For instance, younger firms in the entre-

preneurial or growth stage may ardently seek the

endorsement of a high-status individual or organization in

order to establish their legitimacy.

This strategy is widespread among activist and non-

governmental organizations whose survival hinges on their

Table 1 A comparison of status, social identity, and other attributes of stakeholder identification

Status Social identity Stakeholder attributes (power,

legitimacy, urgency)

Accounts for stakeholders’ uniqueness within

generic categories

Yes, intersubjectively

agreed-upon

ranking

Yes, individually generated

perception

No, attributes generally define

broad categories of stakeholders

Accounts for the social and economic aspects

of stakeholders’ dual identity

Yes, multi-faceted Yes, multi-faceted No, single nature

Provides a one-dimensional attribute capturing

managers’ perceptions of their stakeholders

Yes, intuitive and all-

encompassing

No, defined by the stakeholders

themselves and difficult to

access

No, individual attributes are

presented as independent of

each other

A ‘Names-and-Faces Approach’ to Stakeholder Identification and Salience: A Matter of Status 33

123

ability to generate momentum from donors who, in turn,

are highly sensitive to the status, reputation, and legitimacy

of their funds’ recipients. For example, organizations such

as the Carbon Disclosure Project or the activist campaign

2020 Women on Boards heavily publicize their high-status

relationships on their websites to bolster their own credi-

bility. 1 In conversation, the director of one such organi-

zation explains: ‘‘People listen to those who they recognize

and admire. We are all about numbers… the more big names we can advertise on our website, the easier it is for

us to sell our cause and get supporters.’’ Likewise, it is

common for prestigious festivals to garner high-status

sponsors; much like the higher status sport of golf gener-

ally features more prestigious products and brands—such

as investment banks, luxury cars, and branded jewelry. In

the business arena, Benefitfocus is a rapidly growing firm

whose mission is to simplify benefits’ options and enroll-

ment. On the front page of its website, we can find the logo

of eight highly visible and prestigious customers, including

Hard Rock, WelchAllyn, and Under Armour. 2 The quest

for status offers an explanation to why firms eagerly cajole

stakeholders of high status in a visible relationship with the

firm.

Indeed, it is noteworthy that firms expend considerable

resources to gain the endorsement of high-status actors.

These often take the form of discounted services to gain a

high-status customer or supplier, or some form of ‘‘status

purchase.’’ For instance, a hotel may purchase the ‘‘Relais

and Chateaux’’ designation, for a substantial fee, to increase

the prestige of its institution. The same dynamics are at play

when DBLM, a construction company focused on large-

scale restoration projects, bids below cost on a prestigious

contract (such as City Hall) in order to add to its impressive

portfolio of clients. Or, when a local fitness center offering

gymnastics programs accords a training discount and

membership incentives to a gymnast training at level 9 and

not to an equally powerful and legitimate gymnast who trains

at level 3, from whom the gym does not foresee reaping the

same status benefits in competitions.

In the same manner that firms can gain from associating

with high-status organizations, their own status position

can be tainted through associations with lower status

organizations (Washington and Zajac 2005), which firms

generally seek to avoid. Recall Tiger Woods’ sex addiction

scandal in 2009 and the sudden crumble of Mr. Wood’s

status. Subsequently, high-paying sponsors such as Gillette,

Gatorade, Accenture, AT&T, and Tag Heuer began writing

off their contracts with Mr. Woods—either through their

immediate and public disassociation from the golfer or

over time, by slowly suspending their use of Wood’s image

in their product’s advertisement. 3

In another example, a multiple brand car dealership was

seeking to obtain the territory’s Mercedes-Benz franchise.

In order to do so, however, the dealership was required to

terminate early its franchising contract with Volkswagen, a

costly agreement. Traditional models of stakeholder iden-

tification and prioritization do not explain these dynamics.

For instance, Mercedes-Benz is not more powerful than

Volkswagen by traditional measures: the Volkswagen

brand is ‘‘an icon’’ 4 and its asset base is twice the size as

Mercedes’. 5 Both brands are highly legitimate in society

and one’s claims are not more urgent than the other. In fact,

one could argue that Volkswagen, being already in a

contract with the dealership, has higher legitimacy to the

dealership, and that contractually speaking, its claim is

more urgent. However, the quest for status does explain the

dealership’s choice to renege its contract with Volkswagen

in order to obtain the Mercedes-Benz franchise. An

employee of the dealership explains: ‘‘Mercedes fits better

with the owner’s desire to be recognized in the luxury

segment.’’ When pressed to explain why the owner was

seeking these prestigious associations, the employee

responded: ‘‘It gives him an ‘‘in’’ with local movers and

shakers, because it increases his personal recognition.’’

In certain particular instances, high-status firms may

willingly seek the association with lower status organiza-

tions in order to gain a greater effort from the low-status

stakeholder, so long as the association does not harm the

high-status firm’s legitimacy (P3a). In September 2015,

Amazon announced its endorsement of Shopify, a web-

stores’ online mall. The endorsement came in the wake of

Amazon’s own webstores division failure while it desired

to remain present in that segment of the market. Shopify, a

low-status firm, would benefit from allowing its customers

use the Amazon interface for login and payment. 6 With

Amazon’s high-status endorsement, Shopify’s own status

and legitimacy are significantly bolstered. While the ben-

efits to Shopify are apparent, Amazon’s motivation aligns

with the idea that a high-status firm can gain a greater

effort from this lower status stakeholder—specifically

1 https://www.cdp.net/en-US/Pages/HomePage.aspx and http://www.

2020wob.com/. Information accessed October 12, 2015. 2 https://www.benefitfocus.com/. Information accessed October 12,

2015.

3 http://content.usatoday.com/communities/gameon/post/2011/08/

tiger-woods-losing-another-corporate-sponsor-tag-heuer-spilt-part-ways-

amicable/1#.VhviE_lVhHw. Information accessed October 12, 2015. 4 http://articles.economictimes.indiatimes.com/2009-09-02/news/27643

757_1_volkswagen-passenger-cars-car-market-beetle. Information acces-

sed October 12, 2015. 5 https://ycharts.com/companies/VLKPY/assets. Information acces-

sed October 13, 2015. 6 http://learnbonds.com/123414/amazon-com-inc-amzn-endorses-sho

pify-as-webstores-die/. Information accessed October 12, 2015.

34 E. Perrault

123

favorable contractual terms such as access to users’ list and

Shopify’s intellectual property.

Likewise, the case was made earlier in this article that

status can derive from power, and thus that organizations

with lower status in society may be perceived as high status

by a particular firm if it has the power to affect the firm’s

success (P3b). In a recent conversation, the director of

strategy at a MeadWestVaco’s specialty division explained

that the stakeholders they prioritize are analysts. She

explains that while the analysts who follow them do not

work in high-status firms, they individually hold great

power in directing how the public—shareholders and the

media—will view MeadWestVaco’s performance. As a

result, these analysts are bestowed with prestige that ele-

vates their status to MeadWestVaco employees. In turn, the

status analysts acquire by way of their power to affect the

firm’s outcomes enables them to capture managers’ time as

desired—a highly valued resource.

Without power or effort, however, low- and middle-

status stakeholders are likely to receive the least amount of

managerial attention (P4). For instance, the 9/11 Heroes

Run is held throughout the United States and raises money

for first responders. A local organizer explains that when

she solicited a high-status aerospace company to sponsor

the race for a few thousand dollars, she was denied the

money. Yet, she witnessed the same firm donate over

$200,000 to two funds created for the victims of local

tragedies that were made highly visible in the media a few

weeks after her requests. She blames her failure to raise

money with this prestigious company on the lack of visi-

bility of her organization—which we know to be tied to

status (Castellucci and Ertug 2010).

In sum, when deciding how to engage with stakeholders,

it is commonplace for managers to primarily rely on their

perception of stakeholders in terms of their desirability and

the possible benefits (loss) they may gain (suffer) from the

association. This approach, based on status, is deeply

rooted in managers’ humanity in terms of individuals’

intuitive tendency to seek high-status associations, while

enabling the modeling of stakeholder management from a

names-and-faces perspective. As such, status offers a

realistic construct to understand firm–stakeholder rela-

tionships that defy traditional conceptions of stakeholder

identification and prioritization.

Discussion

This paper builds on recent research in the stakeholder

literature that suggests much needed nuance to a theory of

stakeholder identification and prioritization by adopting a

‘names-and-faces’ approach grounded in stakeholder sta-

tus. In support of scholars who advocate for the importance

of recognizing stakeholders’ uniqueness within broad cat-

egories of constituents’ transactional roles with the firm

(e.g., Crane and Ruebottom 2011; McVea and Freeman

2005; Wolfe and Putler 2002), the present article aims at

refining the way in which a names-and-faces approach can

be applied, in reality, to our understanding of firms’

stakeholder management practices. To do so, it first eval-

uates the contributions and limitations of past approa-

ches—namely relying on stakeholders’ social identity

(Crane and Ruebottom 2011; Wolfe and Putler 2002) or

managers’ perceptions of their individual attributes, such as

power, legitimacy, and urgency (Mitchell et al. 1997)—in

order to identify and prioritize stakeholders. Drawing on

the strengths of these works, the present article suggests

that stakeholder status offers important conceptual and

empirical advantages in explaining and predicting who

managers identify as stakeholders and who they give pri-

ority to. Below, we draw out the implications of this

argument and present some areas for future research.

One of the main implications of using stakeholder status

as a basis for stakeholder identification and prioritization is

that it provides a socio-cognitive explanation to how firms

interact with stakeholders, taking into account the dynamic

effect of firms’ characteristics in view of those of stake-

holders (Bundy and Pfarrer 2015; Bundy et al. 2013;

Waldron et al. 2013). That is, previous research has

established the links between status and other social

approval assets such as legitimacy and reputation (Bitek-

tine 2011; Deephouse and Suchman 2008). Within this

paradigm, firms behave and choose relationships based on

their own social approval assets as well as those of others

(Bundy and Pfarrer 2015; Phillips and Zuckerman 2001).

For instance, a firm with a generally high reputation and

high legitimacy may be more sensitive to preserving its

social approval assets and engage solely with stakeholders

of high status. By contrast, a firm with lower legitimacy has

less to lose in associating with stakeholders of lower status,

and may use this opportunity to learn or gain more ‘‘work’’

from these stakeholders (Castellucci and Ertug 2010; Ertug

and Castellucci 2013).

Given the nascent interest in the management literature

for understanding the effect of status on firm behavior, and

the current limitations of stakeholder theory in terms of

providing a guideline to identify and prioritize stakehold-

ers, further examining the effect of stakeholder status on

firms’ interactions with stakeholders bridges these two

areas and opens several avenues of future research at the

intersection. Thus, an interesting avenue for future research

is to include considerations of status in socio-cognitive

theories of firm behavior that are grounded in social

approval assets (Bitektine 2011; Bundy and Pfarrer 2015;

Bundy et al. 2013; Perrault and Clark 2015; Pfarrer et al.

2010; Waldron et al. 2013). This would enable a more

A ‘Names-and-Faces Approach’ to Stakeholder Identification and Salience: A Matter of Status 35

123

complete account of the way in which firms’ own social

approval assets impact how they seek stakeholder rela-

tionships and respond to stakeholders’ demands.

Specifically, research is just beginning to explore the

relationship between status and other important constructs

in stakeholder identification and prioritization—such as

power and legitimacy. Future research examining the ways

in which status grants power, or how stakeholders of var-

ious status levels use the different types of power to press

their requests onto firms, would be particularly insightful to

our understanding of managers’ resource allocation to

activist stakeholders. Likewise, establishing a stronger

connection between status and legitimacy through case

studies would further enlighten the impact of stakeholder

status on managerial decision-making within a socio-cog-

nitive approach to management.

Doing so would provide important knowledge con-

cerning the effect of status at the meso level—a largely

under-researched area of management theory (Piazza and

Castellucci 2014). Indeed, previous literature generally

examines status from either a macro perspective, in terms

of its effect on markets and exchange partners in high-risk

and uncertain environments (e.g., Benjamin and Podolny

1999; Jensen et al. 2011; Podolny 1993; Podolny and

Castellucci 1999) as well as at the micro level, in teams and

personal relationships (e.g., Gould 2002; Huberman et al.

2004; Weber 1978). By contrast, little is known about the

effect of status in coordinated environments such as the

networks of stakeholders in which firms operate. Specifi-

cally, future research could examine the effect of status on

firms’ choice of individual relationships within a broad

category of stakeholders, among potential suppliers for

example. Doing so could further our understanding of

firms’ differential responses to stakeholders, which

research has begun to pay increasing attention to, espe-

cially in the context of stakeholder activism (Perrault and

Clark 2015; Waldron et al. 2013).

Perhaps a first step for future research is to validate

empirically the explanatory power of status theoretically

advanced in the present paper and the validity of the

relationships set forth in our propositions and Fig. 1. Does

stakeholder status explain how managers accord priority to

their constituents? And, is status a more accurate attribute

to enlighten how managers categorize stakeholders than

other attributes previously advanced in the stakeholder

literature, such as power, legitimacy, urgency, or social

identity for example? Examining these questions in large

scale empirical tests would provide much needed knowl-

edge regarding the value of status—and of a socio-cogni-

tive approach—to understanding firm–stakeholders

interactions. Likewise, future research examining the

relationship between status and power, and how stake-

holders use their status in reality to press their requests to

managers would help enlighten the mechanisms that

undergird managers’ stakeholder management decisions.

Conclusion

This paper builds on recent advances in the stakeholder

literature promoting the importance of accounting for the

specificity of groups and individuals within broad cate-

gories of stakeholders in order to better understand firm–

stakeholder interactions. After reviewing the strengths and

limitations of a ‘names-and-faces approach’ based on the

social identity of stakeholders, we offer stakeholder status

as an attribute of stakeholder identification and prioritiza-

tion. We argue that examining status significantly advances

stakeholder identification and prioritization efforts because

it provides a specific ordering of groups’ desirability, based

on their uniqueness within broad categories of stakehold-

ers. In addition, it accounts for the inherent dual identity of

stakeholders as including both social and economic

dimensions. Lastly, it is an all-encompassing, one-dimen-

sional indicator of a group’s desirability that can realisti-

cally explain, as well as guide, how managers accord

attention to their constituents. We set forth propositions

that link stakeholder status to managerial attention in hope

to stimulate future research addressing the important topic

of stakeholder identification and prioritization.

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